With NFTs and baseball mania taking over the news, some of you may be wondering: What actually are NFTs?
Blockchain technology has opened up new markets for investment and consumption. And one of the hottest recent trends in this space has been the production and sale of non-fungible tokens (NFTs). NFTs are one-of-a-kind, authenticated digital files, such as artwork or collectibles. The reason gain and retain such high value is due to the fact that they cannot be easily copied.
The hype around NFTs has been so strong that some have sold for millions of dollars. So, is this an emerging asset class that you should be jumping into? Let’s dive a bit deeper into NFTs to see if this is something you are interested in. At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs. It is worth noting that other blockchains can implement their own versions of NFTs.
So what types of companies are selling NFTs? The NBA has NBA Top Shot – a way of selling digital collectibles in the form of trading cards embedded with iconic moments from the game. With a plan to add virtual jewelry, accessories and clothing that can be used across social media, the NBA is seeking to find ways to expand this revenue stream as far as it can go. And Topps now wants to do for Major League Baseball (MLB) what Dapper Labs did with NBA Top Shot. And now, even tweets hold value, with Twitter co-founder Jack Dorsey selling off the first-ever tweet for a massive $2,915,835.47. Musicians are also selling the rights and originals of their work, as well as short videos to clips of their music, and you can even buy digital real estate and 3D assets like furniture.
NFT’s are definitely the craze right now, and may only just be getting started. If you have any questions on what NFTs are or how it may impact your financial planning or tax situation, please email us at email@example.com or schedule a complimentary 30-minute consultation here.