For many people, the urge to occasionally go on a treasure hunt for the sheer fun of it can sometimes be overwhelming. Some people seek mementos that stir memories of the past while others specialize in rarities that can be flipped for a profit. The prize varies widely, ranging from paintings, rare coins and antique furniture to classic cars, comic books and blow-up dolls. Some collectibles are only accessible to the super-rich due to their steep price tags while others are too esoteric for the average collector’s taste.
You can chalk up Jack Dorsey’s tweet to the latter category.
Capitalizing on the NFT mania, the Twitter Inc. (NASDAQ:TWTR) and Square Inc. (NYSE:SQ) chief executive is selling the first-ever published tweet as a kind of tokenized digital collector's item.
Amazingly, bids on the 5-letter tweet which reads "just setting up my twttr" have hit an eye-popping $2.5 million, thanks to two crypto influencers helping push the price past the $2 million mark. Dorsey shared the tweet on Friday with a link to the "Valuables" platform that allows for the buying and selling of tweets autographed by their creators.
NFTs are a new blockchain tool to tokenize all manner of digital media. The NFT market has exploded this year, with experts placing its worth north of $400 million.
Non-fungible tokens, or NFTs in short, are unique cryptocurrency tokens used to represent assets such as digital art, movies or music. NFTs can be bought and sold like any physical asset; however, they have the big advantage of running on blockchain, meaning ownership and validity of the asset they represent can be accurately tracked.
The NBA has played a big part in helping popularize the NFT concept after launching the NBA Top Shot platform that allows users to buy or sell officially licensed NBA video highlights, known as “Moments”.
NBA Top Shots is an NFT platform that allows fans to buy and sell numbered versions of video clips of player highlights called "Moments”. The platform has been experiencing explosive growth, with weekly sales now clocking in at $50 million.
An emerging trend for NFTs: People are frequently willing to pay ridiculous amounts of money for digitized collectibles. Recently, a tokenized 13-second video play of Zion Williamson’s New Orleans Pelicans debut was sold as a non-fungible token (NFT) for $100,000, while another for a LeBron James dunk sold for $208,000.
But, of course, Dorsey’s tweet has now taken this madness to a whole new level.
In case you are wondering who in their right minds forks over $2.5M for a five-letter tweet or $200K for a 15-second video clip, NFTs offer something else many people value highly: Scarcity, and a shiny new product protected by blockchain technology.
One of the main benefits of digital collectibles compared to physical collectibles such as a rare minted coin or Pokemon card is that each NFT is completely distinct from any other NFT and easily verifiable, meaning each item can be traced back to the original issuer. The NBA only releases a limited number of each Moment. For relatively common ones, that could be a couple of thousands; for rarer Moments, that could be as few as 3 with Top Shot weighing to start selling limited editions of just one. Tweets are, by nature, even more unique since no two tweets are likely to be exactly the same.
Thankfully, NFTs can be traded--sometimes very profitably.
For instance, one gamer on the Decentraland virtual land platform purchased 64 lots and combined them into a single estate which they sold for $80,000 purely because of its desirable location and road access. Another investor purchased a segment of a digital Monaco racing track in the F1 Delta Time game making them entitled to 5% dividends from all races that take place on the track.
By Fred Dunkley for Safehaven.com