In the new issue of Forbes Digest, we figured out what NFT art is, who does it, who buys and, most importantly, why?

The reasons for the recent boom in NFT were the rise in the value of the cryptocurrency, the emergence of the social network Clubhouse, where users actively discussed NFT and indirectly increased its popularity, as well as the entry into the market of celebrities and famous artists in the art environment. But the passions for Clubhouse subsided rather quickly, and NFT, it seems, is not losing ground yet. In the first quarter of 2021, NFT sales exceeded $ 2 billion, which is 20 times more than in the previous three months and 131 times more than in the first quarter of 2020.

New life for digital artists

What is NFT? Literally, the abbreviation stands for non-fungible token, that is, a non-fungible token. In fact, NFT is analogous to securities. The purchase of an NFT token secures a person the right to own a digital object on the Internet: gifs, paintings, photographs, audio, or any other file he buys.

And the cost of these objects ranges from mere pennies to tens of millions of dollars. For example, the auction for a collage of 5,000 works "Everydays" by digital artist Mike Winkelmann, known by the creative pseudonym Beeple , started at $ 100 and went up to $ 69.35 million .

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Until now, digital artists earned money mainly by making work, and they were rarely considered real artists. In addition, there was simply nowhere to sell their work. The emergence of NFT has shown that they create real in-demand art and can earn money by being creative.

Ethereum - the new Bitcoin

NFT tokens are sold and bought mainly for the Ethereum cryptocurrency, which was invented by Vitalik Buterin . Ethereum is the second largest cryptocurrency in the world with a market capitalization of $ 389 billion. Its exchange units are called "ether" and now they are second only to Bitcoin, whose capitalization is $ 1.1 trillion. In addition, Ethereum is both a payment system and a platform for developing blockchain-based applications. The code for these applications runs on a distributed network rather than on a centralized server. Thanks to this, the application cannot be censored.

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With the advent of ether, complex transactions with various digital assets became possible, so we can say that Buterin also invented NFT. In 2021, the programmer managed to become the youngest crypto billionaire in the world and lose this status. After the jump in the currency rate, Buterin's fortune fell by almost 40% and is now estimated at approximately $ 850 million.

Who sells what in NFT?

Not only artists have entered the game with crypto art, but also media personalities. Most sell their own photos, pictures of their pets and digital canvases. But there are also more interesting proposals.

The Weeknd's musician sold an unreleased song for $ 2 million at an NFT auction. The lucky owner of a non-leveraged token received a track that will never be presented on any digital platform. DJ 3LAU went even further and sold an entire album of music for $ 11.6 million.