Nyan Cat's original GIF was sold for $580,000. You read that correctly. Despite the fact that anyone can look up and reproduce the GIF, it sold for more than half a million dollars. Lindsay Lohan paid $17,000 for a computerized picture of her face. A tweet from Jack Dorsey, Twitter's CEO and co-founder, sold for $2.5 million on the internet. What exactly is going on? What is the worth? Anyone can look at these files on the internet.
A new financial asset class is developing as a viral and disruptive player in both the finance and art sectors in the wake of "GameStonks" and the growth of meme stocks this year. Non-fungible tokens (NFTs) are one-of-a-kind digital assets that are swiftly gaining traction on online forums and established auction houses, with a market cap of more than $200 million. "What bitcoin did for banking, NFTs are doing for the world of art and collectibles," Chris Dannen told the Wall Street Journal.
While the GIFs or JPEGs in question are still available for anybody to copy on the internet, blockchain technology allows users to confirm that they own the original. Because Merriam-Webster defines fungibility as "anything (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying an obligation or settling an account," the new NFTs are unique assets by definition. This is in stark contrast to other cryptocurrencies such as bitcoin and traditional currency, which are both designed to be exchangeable.