Until recently, tech-savvies and crypto enthusiasts were watching the price of Bitcoin with bated breath and passionately discussing cryptocurrencies. Now NFTs, another blockchain-related phenomenon, have come to steal the show.
Who run the world? Bet you were going to say “Girls!” and we’re with you on this. But as tech geeks, we mean innovations that make life easier, help us earn money, and open up new opportunities. The technology that offers all these things is NFT, a new buzzword that has gone far beyond the crypto world.
Although it all started with CryptoKitties back in 2017, it took people several years to realize what potential opportunities are offered by NFTs and how widely these tokens can be used. We are currently able to tokenize both digital and physical items, ranging from artwork, photographs, video clips, and GIFs to collectible rings, face-to-face meetings, and backstage visits.
Read on to learn about what NFTs are and what makes them so popular and expensive. Find out about NFT real-life applications and what celebrities and influencers have already joined the NFT hype train.
What are NFTs?
An NFT, or a non-fungible token, is a unit of data that serves as a certificate that a digital asset is unique and not interchangeable, but can still be transferred or traded. Tokens are stored on the blockchain and governed by smart contracts.
A smart contract is a line of code that defines conditions for a transaction: who owns an item, how the token can be transferred, and what exactly it represents. Thus, smart contracts are able to identify if a token is unique and authentic.
NFTs are sometimes compared to cryptocurrencies and other types of tokens, but there are a few differences. Although cryptocurrencies also exist only on the blockchain, they still work just like fiat money: one Bitcoin is equal to another Bitcoin, a one-dollar note doesn’t differ from another one. As for digital asset tokenization, here an asset can be represented by many tokens, which makes fractional ownership possible. NFTs, in their turn, can’t be divided and represent an item that is one of a kind and not equivalent to anything else.
Currently, most NFTs are based on Ethereum’s ERC-721 and ERC-1155 standards. Developers can also create and issue non-fungible tokens using other blockchains such as WAX and Flow. It is important to keep in mind that if an NFT was minted on one blockchain, it won’t be moved to another, so when choosing a marketplace, make sure you’re familiar with the blockchain and its peculiarities.
How did the NFT craze begin?
You will hardly be surprised if we say that it all started with cats. The internet and kittens have always been inseparable, but blockchain-based cats were definitely something new. Thus, the first NFT wave happened in 2017 when CryptoKitties, a game developed by Dapper Labs, came on the scene.
This Ethereum-powered collectible game allows its players to buy, collect, breed, and sell virtual kittens. Each of them has a unique appearance and unique traits, it 100% belongs to the player, and cannot be replicated, taken away, or “killed” (neither real nor virtual cats should suffer!).
The game was released to the public on November 28, and during the first few days players spent $1.3 million in transactions, with several kittens being sold for about 50 ETH ($23,000 then). The “Genesis” kitten was sold for 246 ETH (about $113,000) – a record price at that time.
Since then, a lot has happened: the CryptoKitties game has broken more records, is still successful, and is in the process of switching from Ethereum to the Flow blockchain. Many other platforms and marketplaces have appeared, including NBA Top Shot, OpenSea, Rarible, SuperRare, and others. In addition to that, NFT use cases are expanding as well.
Why not just copy or download a digital file?
That’s a good question.
Actually, nothing stops you from copying digital works of art or downloading pictures, videos, and GIFs. However, saving a file in your phone gallery won’t make you the only owner of the file. At the same time, if you buy an NFT, the token will prove that you own the original version of the item.
Sometimes, the art creator still retains the copyright and may continue to post drawings and videos they have sold as NFTs, or even sell copies.
Benefits for fans
You might still be wondering what the point is of buying NFTs if they don’t mean copyright ownership and if tokens cannot be used outside of the blockchain.
Well, if you’re a fan who admires a music band, a blogger, or a TikToker, you must already have a collection of merch, pictures, and music albums and won’t miss an opportunity to get to a concert, an in-person meeting, or a fansign event. Considering that new generations value digital items as much as physical ones and that in the midst of the COVID-19 pandemic fans had to learn how to enjoy virtual events, it comes as no surprise that they are so interested in NFTs.
With non-fungible tokens, fans can buy digital pictures, works of art, and even tickets to exclusive events. Let’s say you purchased an NFT that has Eminem’s one-of-a-kind tracks attached to it. First of all, the fan will be able to add a unique item to their collection, knowing that they are the only one who owns the official version of the track.
The exclusivity of the purchased file carries its main value. You know how collectors feel when buying original paintings, handwritten diaries, and rare photographs. When fans acquire a much-desired item, they may experience even greater emotion.
The second reason for buying and collecting non-fungible tokens is that fans and collectors can consider NFTs as a form of investment. By purchasing and reselling tokens, they can make a profit.
Benefits for celebrities
Back in the last century, the interaction between artists and fans was almost impossible. People went to concerts and could only write letters hoping to receive an autograph. Today, fans and their idols have more and more opportunities for communication and various activities, both online and offline. NFTs specifically can provide new ways to interact with celebrities, help them get closer to their fans, and even promote their name more effectively than using advertising.
NFTs introduce a new monetization model that benefits both celebrities and their supporters. Artists, for example, can issue a new song or make a drawing, a unique signature, or a music video, and turn them into an NFT. Fans can purchase the NFTs, backed up by items produced by their faves, and become the only owner of its official version.
By issuing NFTs, celebrities can also provide their fans with a unique experience, giving them a chance to buy a ticket to an in-person or online fan meeting, or even a trip with a star.
NFT collectible cards are currently popular in the sports field, but music fans, for instance, love collecting photo cards as well. Imagine the rise in interest if a photograph is unique and only one fan has a chance to own it.
In addition to that, placing products on NFT marketplaces and launching NFT projects is another marketing opportunity for celebrities, influencers, and other public figures. Apart from selling real merch, they can issue non-fungible tokens and see it as another form of eCommerce.
On the whole, there are plenty of potential applications and benefits behind NFTs for celebrities and their fans.
Why are some NFTs worth a fortune?
Most of the NFT-related headlines are about tokens sold for eye-popping sums of money. You may have heard about Mike Winkelmann – the digital artist known as Beeple – who sold his work of art “Everydays: The First 5000 Days” as an NFT for $69.3 million at Christie’s. It is a collage of 5,000 digital images that the artist has been creating daily since May 1, 2007.
The work of art was purchased by Vignesh Sundaresan, aka MetaKovan, a Singapore-based programmer and owner of Metapurse. From March 11, 2021 (the day of purchase) MetaKovan owns the rights to display “Everydays”, but does not receive copyright.
Sounds crazy, right? Here are some ideas explaining why this piece of art has caught the public’s attention and was priced at such an incredibly high value:
- 1. By creating and sharing digital artwork every single day, Beeple has built a solid fan base on social media. He has over 2 million followers on Instagram alone.
- 2. Working together with Christie’s also contributed to the overall success. This auction house has sold some of the greatest paintings in history, including the only known portrait of Shakespeare, Pablo Picasso’s Les Femmes d’Alger (“Version O”), and Leonardo da Vinci’s Salvator Mundi.
- 3. Beeple was initially at the forefront of NFT sales and presented his collage during an NFT popularity peak.
In general, everyone is accustomed to the fact that collectors are ready to spend huge amounts of money on rare stamps, paintings, or coins. These days, we are seeing an industry transformation where digital items (that previously cost less than $100 or even nothing) are becoming more valuable.
Uniqueness, rarity, authenticity, and the author’s popularity are four main factors that define a price of an item. The same goes for NFTs, only the technology and the means of storing information about the authenticity and purchase of a product differ compared to items bought from traditional auction houses and stores.
Non-fungible tokens are “minted” and issued only using blockchain technology. Blockchain platforms allow their users to verify an item’s authenticity, track its ownership, and view detailed information about the purchase. Thus, fans can simply sit on the couch at home, scroll through marketplaces and special fan applications, and buy original and genuine goods without the risk of accidentally purchasing a counterfeit product.
At the same time, not all NFTs are worth a fortune and can be quite affordable for most fans. For example, there is an extremely popular NFT platform from Dapper Labs called NBA Top Shot. It has generated over $700 million in total sales in less than a year. Nevertheless, Roham Gharegozlou, the company’s CEO, commented, “The headlines are always, you know, ‘LeBron sells for $200,000 or $300,000’ but the reality is, out of the four and a half-ish million transactions on the marketplace in the past few months, over 3 million have been less than $50.”
Thus, celebrities and influencers have several options: to produce items for the mass market (but they must be unique anyway) and sell them as NFTs at a reasonable price and to create original works of art or offer personal items, photos, or videos that will have a higher value.
NFT applications and celebrities who’ve jumped on board
Many celebrities, actors, actresses, and influencers are already part of the NFT wave while others are still exploring NFT opportunities and applications. The statistics collected from NFT marketplaces on the Ethereum blockchain alone speak for themselves; within just one month, from May 15 to June 15, 2021, a total of 93,159 sales were made, with $58.3 million spent on them.
Let’s explore what exactly celebrities can digitize and sell as NFTs and find out who is no longer new to this business.
Songs and music albums
NFT marketplaces allow artists to tokenize their songs, singles, and albums and sell them without turning to intermediaries.
Kings of Leon and their NFT album
On March 5, 2021, an American rock band Kings of Leon released their new album “When You See Yourself” as a collection of NFTs. Each token was unique as it contained an exclusive work of art and limited edition “Golden Eye” vinyl. Fans got access not only to the music but also to concert tickets; the band held six “Golden Ticket” auctions. This limited series of tickets guaranteed the holder four front-row seats to one show of each Kings Of Leon tour for life.
As a result, Kings Of Leon raised $2 million from these NFT sales, and more than $500,000 was donated to Live Nation’s Crew Nation fund through which musicians aimed to support music crews during the COVID-19 pandemic.
Photos and video highlights
A celebrity can tokenize photos that haven’t been published on the Internet. This will give the token value and exclusivity for potential buyers – fans or collectors. Officially licensed videos of the most important and interesting moments in a celebrity’s career can be turned into NFTs as well.
Celebrities can also issue tokens, the ownership of which will give a fan the chance to take a photo with an idol in the future.
Emily Ratajkowski’s picture as an NFT
Emily Ratajkowski, an American model and actress, has minted a non-fungible token named “Buying Myself Back: A Model for Redistribution”. The NFT was up for auction at Christie’s and was issued so that the model could regain control over the use of her images.
The token was sold for $175,000, while Ratajkowski will still receive an undisclosed cut from every NFT resale.
“NFTs carry the potential to allow women ongoing control over their image and the ability to receive rightful compensation for its usage and distribution,” the model commented on her Instagram page.
Memorable quotes and social media posts
Although social media posts and various quotes can easily be screenshotted or copied from the Internet, famous people have started to tokenize these digital items as well.
To make your post or a quote even more valuable, you can attach a photo or GIF from your personal archive to it. However, as real-life examples show, this is not a prerequisite for your token to be sold at a high price.
The buyer of such a token gets the right to own that particular social media post.
Jack Dorsey’s first tweet sold as an NFT
Twitter founder and CEO Jack Dorsey decided to sell his first-ever tweet as an NFT for charity. The “product” has found its buyer; the tweet that said “just setting up my twttr” and was published on March 21, 2006, was sold for $2.9 million to Sina Estavi, CEO of Bridge Oracle.
“This is not just a tweet! I think years later people will realize the true value of this tweet, like the Mona Lisa painting,” Estavi noted.
The NFT was purchased with ETH. Dorsey shared that he had converted the proceeds to Bitcoin and donated the sum to GiveDirectly, an organization helping poor families in Africa impacted by the COVID-19 pandemic.
Drawings, paintings, and animated pictures
Many artists are into drawing, painting, and graphic design. Why not share this with the world in the NFT form? Perhaps your talent and creativity will inspire fans and demonstrate that you are keeping up with the times using the most advanced technologies. Plus, it will help you promote your own brand and name.
Paris Hilton and her NFT collection of animated pictures
Paris Hilton, probably the most famous hotel heiress in the world, put her NFT collection on sale on the Nifty Gateway marketplace in April 2021. Planet Paris, a collection of three pieces of art designed in collaboration with Blake Kathryn, was sold out in a very short time. All editions of “Hummingbird in my metaverse” and “Legend of love” animations were sold for $10,000 apiece, generating $220,000 in sales for Paris. Meanwhile, during the “Iconic crypto queen” auction, the highest bid for the artwork exceeded $1.11 million.
Paris Hilton herself has purchased over 130 NFTs, which indicates that she is an avid collector of tokens and digital art.
Paris plunged into the crypto world back in 2020, and it seems she is not going to leave it any time soon. In June 2021, she invested in Origin Protocol, a decentralized platform focused on launching NFTs. The hotel’s heiress has joined the company as an advisor.
Memorabilia and collectibles
Celebrities can sell literally anything as memorabilia for their fans: outfits from world tours, exclusive merch, trophies, accessories, plushies, and autographs (can be digital as well). Celebrity collections converted to NFTs give the holder the ownership of the tokenized items.
The Golden State Warriors memorabilia collections
The Golden State Warriors, a San Francisco-based American professional basketball team, auctioned their team memorabilia as non-fungible tokens. This was the Warriors’ first attempt to test the new technology and trend, and it turned out to be successful.
The team’s NFT Collection included two series: the Warriors Championship Ring NFTs and Commemorative Ticket Stub NFTs designed by Black Madre. It was announced that the winner of the one-to-one NFT auction would receive a physical ring and that several other NFTs would also be complemented by the Warrior-for-a-Day experience.
As a result, Warriors sold 327 NFTs and raised over $2 million at auction. The bulk of the money came from one purchaser who spent $871,581 on a token with all six Warriors championship rings. That person will get a real ring that combines the elements of each of the six title rings into one.
Eminem and his Shady Con NFTs
Rap legend Eminem has recently dropped his first NFT collection on Nifty Gateway. His Shady Con NFTs featured collectibles such as comic books, trading cards, and original beats.
When announcing the news, Eminem commented, “I’ve been collecting since I was a kid, everything from comic books to baseball cards to toys, as well as every rap album on cassette I could get my hands on. Not much has changed for me as an adult. I’ve attempted to re-create some of those collections from that time in my life, and I know I’m not alone.”
During the sale, the rapper made almost $1.8 million and a portion of the proceeds will be donated to the Marshall Mathers Foundation.
Stickers, avatars, and emojis
Celebrities can collaborate with designers to create cartoon avatars, stickers, and emojis. They will be even more valuable if a famous person designs them with their own hands. After purchasing these NFTs, the fan can use the avatars and stickers on the Internet.
Grimes selling digital avatars
Canadian musician Grimes presented 10 works as NFTs and sold them on Nifty Gateway for $6 million. What cost so much, you may ask?
The collection focuses on “WarNymph”, the digital avatar that the musician created for the release of her album “Miss Anthropocene”, and consists of 10 pieces – some of them are unique, some – have thousands of copies.
The collection went on sale on February 28, 2021. The best-selling piece was a one-of-a-kind video called “Death of the Old”. It was bought for almost $389,000. Nifty Gateway commented that a certain portion of Grimes’ proceeds will go to Carbon180, a non-profit organization dedicated to removing carbon from the atmosphere.
Online/offline meetings, Meet & Greets, trips
Meeting, whether online or offline, is what every dedicated fan dreams of. Celebrities can issue NFT tickets that will serve as passes to an online meeting through Zoom or Skype, a face-to-face meeting, or a Meet & Greet. An NFT ticket can also allow its holder to attend a singer’s rehearsal and take a photo with a star backstage.
Lewis Capaldi selling NFT tickets
Scottish singer-songwriter Lewis Capaldi has joined the NFT hype wave and announced the release of NFT ticket experiences in collaboration with Bondly.
Token buyers will be able to get onto a lifetime guestlist, enjoy a private in-person event, visit a secret gig, and get the chance to hear his new album before anyone else.
Capaldi has also recently announced an exclusive event available only to those who own one of his NFTs. The event will take place in the UK at the beginning of 2022 and the 250 attending fans will be able to hear Capaldi’s unreleased material.
In addition to the use cases and real-life examples described above, NFTs can also be minted purely for launching a charity campaign. A celebrity website may have a separate section where celebrities will post information about their NFTs and offer them for sale. The proceeds will later be donated to those in need.
One more option – the creation of NFT packages which may include several tokens at once. Several combinations of packages are possible: personalized autograph + photo with an idol; collectible photo card + in-person meeting; memorabilia + online meeting, and so on.
The opportunities and NFT use cases do not end there. Almost every day we see new ways of issuing tokens, which are then eagerly purchased by fans and collectors.
So where is it all going?
The NFT concept is spreading quickly among celebrities and athletes. At the same time, other companies and industries are considering implementing blockchain technology and minting non-fungible tokens. For example, Kevin Roose of the New York Times tokenized a photo of his column, and the Associated Press news agency will auction 10 one-of-a-kind NFTs to celebrate 175 years of its iconic photojournalism.
Even though we constantly read about NFTs selling for incredible sums, many platforms like Axie Infinity and R-Planet offer NFTs for $10-300. As mentioned in the May 2021 DApp Industry Overview, these sales are still extremely important to long-term growth as they create great opportunities to bring the masses into the industry.
As the industry grows, so will the number of NFT use cases. Thanks to NFTs and blockchain technology artists will be able to transparently sell the rights to use their works, track sales of their tokens, and receive money for each subsequent resale of their work of art.
At PixelPlex, we also believe that NFTs are not a temporary phenomenon but a technological solution of the future. We didn’t wait for this trend to take off; we started researching and developing NFTs as soon as we saw the potential in these tokens. If you are ready to join the NFT wave and experience its possibilities yourself, contact our NFT development team and embark on your NFT journey right away!