What is an NFT?

First of all, I bet you’re wondering why a website which looks mostly at action figures and movies, delving a little way in to the world of trading cards is talking about NFTs – on the surface these don’t look like they would cross paths very much, however in recent times, at the time of writing this in fact just in the last couple of days the subject of figures, trading cards and NFTs have hit head on, taking me with them! Before we start though let’s get on the same page and answer what NFT actually even stands for; Non-fungible token… Don’t worry we’ll get in to it right away!

What is an NFT / Non-fungible token?

Put simply it’s a digital file which has been given a unique identifier which forever allows it to be tracked and accounted for. Essentially what it boils down to is that now digital files can essentially have a certificate of authenticity whereby a limited number of these files or perhaps even a single one off copy of the file can be certified as such, allowing an individual to own a limited edition digital asset, just the same as if they had an artist limited edition print or original painting.

These are stored in a digital ledger on something called a blockchain. By being stored in this way and by being easy to exchange, with prices always fluctuating on NFT marketplaces, there is a strong link between NFTs and cryptocurrencies. In fact in my limited experience I have had to purchase cryptocurrency in order to purchase my NFTs.

There are any number of digital files which sell as NFTs, although essentially there is no limit to what they could represent. Some of the types of things which have sold on the NFT market have included:

  • Digital trading cards
  • Video clips
  • Digital plots of land or real estate in games
  • Photos
  • Digital paintings
  • 3d renderings
  • Other digital art (in fact at the time or writing this the most valuable NFT was a digital artwork which was an collage of 5,000 digital images produced by Beeple, titled Everydays: the first 5000 days, which sold for $69.3million as the first NFT to be sold through a major auction house, selling at Christies in March 2021)
  • Music and other audio recordings
  • Memes

What do you actually get when buying an NFT?

The rights to an item are essentially about the same as they would be with a real world equivalent. This means that you own the item, the product, but you don’t automatically also own the copyright, although depending on the item, especially if it is a one-of-one item, the artist may well have included copyright ownership – in the case of the Everydays: the first 5000 days piece for example, purchased by MetaKovan for his Metaverse museum, but whilst he has the right to show it in his digital museum, he does not own the copyright. Had he purchased a real life painting for a real world art gallery it would be expected that he would likely have had the right to display the work in his gallery but not inherently also automatically get the copyright.

If I were to buy a Funko pop figure that doesn’t mean that I own the rights to the figure and can start reproducing it or selling it as my own creation. Similarly if I buy a Funko NFT I can display it in my ledger and I have it in my collection, but I can’t start selling copies of it.

How do NFTs fit in to the collectors market?

As I mentioned earlier the subjects of NFTs, collectible figures and trading cards all collided recently when Funko, one of the leading pop culture companies in the world entered the NFT market in association with Wax.

They started to produce virtual trading card packs which contained a number of virtual trading cards depicting Funko pop figures. There are even various different versions of these, just like with the figures themselves. All in all in the space of minutes they sold out of 30,000 of these trading card packs, and their free promo-packs the day before sold even quicker. I myself snagged some of these promo cards the next day on the open market as well as getting hold of a promo pack which remains sealed. Just like with trading cards and Pokémon cards in particular there can be huge excitement and value in owning a sealed card pack to possibly be opened years later.

NFTs are actually perfect for trading cards or artists who can still keep their works a little bit exclusive by having limited numbers for their NFTs but to sell these digital products in a meaningful way. As the world develops does it not make sense that our inherent enjoyment for collecting, what ever it may be, should shift to a digital level, just like much else in our lives has? If you think about it NFTs have been around much longer than we think but in a slightly less controlled and WAY more low key format with trading card companies like TOPPS having their trading card games on smart phones for things like Star Wars. It is no different to playing along with that and collecting those, just that you don’t have as much game play from doing tasks and evolving cards. Just like in these games or with a real life trading card or sticker collection you can still trade, gift and sell your NFTs through NFT marketplaces.

When you think about it what’s the big difference between having a folder with 100 cardboard trading cards limited to 100 each or having 100 digital trading cards in a digital form also limited to 100 each. If anything it makes more sense as they’ll always be in mint condition.

What is burning of NFTs?

Speaking of mint condition, that’s not strictly always the case. With NFTs you have 2 alternatives – on the one hand a card is mint (its digital, it can’t get a tear or wrinkle), or on the other hand, many trading cards in particular have the option of being burned by the owner. By doing this, the owner destroys the item for ever. It retains the blockchain value which means it is still accounted for and can’t be re-made. Once it’s gone, it’s gone.

Why would someone want to burn their NFT I hear you ask!

Thank about it, it’s the same with many other expensive limited edition items. Let’s say someone has the money or luck to get something where the edition is 10 pieces. Each of those 10 pieces will be valuable… But imagine how valuable they suddenly become if they become more scarce… how valuable the item would be if you know that there is only a single one left in existence!

Are NFTs Worth Buying?

I’m going to answer this with the same way I answer questions about what you should collect.

You should collect what you want to collect… What you enjoy. If you like pictures of Funko pops and like having something which has limited numbers, then you may well really enjoy these. But if not and you want to do it just for investing in them, I’m really too new to this to be able to tell you whether or not you can make money from NFTs. Clearly I have shown that as an artist with the right connections the value is there, but who knows for investors. I do know that today with the Funko digital trading card packs having sold out yesterday, packs which sold for just $9.99 are being listed for sale in excess of $130 (and just to show how quickly the NFT market moves, just a couple of hours since I saw those prices, they have now dropped down to around $39)… The internet is a crazy place!

Either way, I got my first taste of NFTs and whilst I thought just a couple of weeks ago that they’re ridiculous and pointless… Now that I have my own in my ledger… I do kinda get it! But be careful, I can see this being a world which is easy to get carried away with… When everything is digital, your money can often very quickly stop feeling quite as real!

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