Elon Musk latest to jump on the NFT bandwagon

Are NFTs just a hype or could they become something more?

Latest to jump on the NFT bandwagon is Elon Musk. The “Technoking of Tesla” tweeted yesterday that he is selling an admittedly groovy song about NFTs as an NFT.

NFTs, or non-fungible tokens, have been very popular recently. The Nyan Cat meme made the news when it was sold for around $540,000 (£400,000) as an NFT. Similarly, musician Grimes sold some of her digital art for a total of $6m (£4.3m). Jack Dorsey, the founder of Twitter, is auctioning the first-ever tweet, currently for around $2.5m (£1.8m). Impressively, artist Beeple sold 5,000 pieces of his artwork for $69m (£50m) via Christie’s.

NFTs use blockchain technology but unlike cryptocurrencies they are “non-fungible,” meaning, they have unique qualities that hinder them from being interchangeable. They could be assigned to anything digital – art, music, memes, drawings, etc. Because they are tokens on blockchain, transactions of NFTs are recorded and buyers can prove ownership. Owners of NFTs get basic usage rights for the digital assets attached, but most of the time artists still hold the copyrights to their work. Because they are digital works, they can be copied and used as many times as one wants, even if one does not own the NFT. So the only current benefit of owning an NFT appears to be the “bragging rights.”

This might change in the future. Supporters of NFTs claim they will increase in value. Looking back at the blockchain trend, that does not seem to be unfeasible. Moreover, we’re already seeing some creative uses of NFTs. The rock band Kings of Leon, for example, sold several copies of their new album “When You See Yourself” as NFTs, generating over $2m (£1.4m), which is very similar, conceptually, to selling limited edition vinyl records. With gaming increasing in popularity, we could start seeing NFTs being used in the gaming industry as a means to personalise players.

The idea of investing millions in something that isn’t physically there might seem a bit outlandish, but weirder things have happened.

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