FROM SPORTS TO ART: What are NFTs and is this a bubble?

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Hands up if you have no clue what an NFT is, or why you keep hearing about them?

You are not alone. NFT talk seems to be everywhere, even though it can take some effort to wrap your head around these digital collectibles.

They’re taking the art world by storm, doing gangbuster business on the collectibles market and are a part of money-making online worlds.

An NFT, or non-fungible token, is a unit stored on a digital ledger called a blockchain that certifies specific data is unique. It’s a unique digital asset, as opposed to another digital asset like Bitcoin.

Bitcoin is fungible, meaning they are all the same.

Digital currencies like Bitcoin or Ethereum, the biggest names in cryptocurrency, are also associated with blockchains.

But Bitcoins are all the same, NFTs are each different and that’s where their value lies. Collectors always want one-of-a-kind assets and that’s what these are.

And just as many are concerned that the cryptocurrency boom is set to go bust, or that the housing market is overinflated, there are also fears that NFTs are in a bubble situation that will burst at any moment.

Business Insider recently reported the NFT market grew more than 800% in 2021, from (US)$52 million on Jan. 1, to (US)$490 million by April 30.

The media outlet reported the artist that set the record for an NFT selling price  — Beeple, who sold a piece for $69 million in March — believes the market is in a bubble.

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Athletes with Canadian teams are also getting in on the action. Recently Brandon Banks, the Canadian Football League’s Most Outstanding Player, who plays for the Hamilton Tiger-Cats, released his own NFT.

Banks has said he didn’t know anything about NFTs until his son told him about them.

Calgary Flames star Matthew Tkachuk released an NFT around the same time as Banks, becoming the first NHL player to do so.

The expectation is the NHL will get in on the NFT trend in the same way as the NBA and its players have to make up for some lost revenue from fans being barred from arenas during the COVID-19 pandemic.

NFT art: Artists make digital pieces and sell them. NFTs also allow them to earn a percentage of any future sales, instead of only making money off their art the first time a piece sells.

In-game assets for video games or virtual worlds: This could be land, music, art, performances, or basically whatever you can imagine.

A picture shows avatars in Soho Plaza, part of the virtual world Decentraland. Martin Shibuya, Art Director/The Decentraland Foundation via REUTERs