March 29, 2023

What are NFTs — and Which Ones Should You Invest in?

What are NFTs — and Which Ones Should You Invest in?

On December 2nd, 2021, a new world record was set for the highest amount ever paid for an NFT. A total of 28,983 collectors jointly paid $91.8 million for The Merge, a piece of NFT art created by the artist Pak — which also makes it the highest price ever paid for a piece of art sold by a living artist. It’s impressive stuff — certainly for Pak, anyway. As for how the investment will turn out for the rest of them, we shall see.

Now, whether you buy into the hype surrounding NFTs or not, the term itself is pretty much inescapable at the moment, with many people believing that NFTs are going to change the investing landscape forever and others simply dismissing them as a rather expensive fad.

Either way, we’re going to examine what NFTs actually are and take a look at a few of the more exciting ones on the market.

So, kicking off at the beginning…

What on Earth are NFTs?

Good question. Let’s assume for a moment that you own Leonardo da Vinci’s Mona Lisa. First of all — congratulations, how the hell did you manage that — but more importantly, you possess a one-of-a-kind asset that’s defined by a unique set of characteristics. While there may be many reproductions of the Mona Lisa, ranging from prints to postcards, you have the original, with the specific brushstrokes in the work’s aging paint making it next-to-impossible to replicate. It’s this uniqueness that gives the Mona Lisa its value, whether you like the painting or not.

When it comes to the digital world, however, things work very differently, as digital art can be duplicated as many times as you like. Under these circumstances, the notion of an ‘original’ becomes meaningless, as no individual copy has any definable characteristics that separate it from any other copy.  

Unless it’s an NFT — a Non-Fungible Token.

If something is referred to as ‘fungible’, it means that it can be readily replaced by any other copy of itself without changing its value. For example, a one-dollar bill is fungible, as you can replace it with any other one-dollar bill and you haven’t lost or gained anything — you just own a different dollar bill now. Therefore, if a fungible asset is one that can be replaced, then a non-fungible asset is one that can’t be. A fungible asset is unique, like your authentic Mona Lisa.

As for the ‘token’ part of an NFT, tokens are simply assets that are held on blockchains. With a blockchain being decentralized ledgers, they’re particularly secure, as everyone involved in the blockchain has their own copy of the ledger. If you own Bitcoin, for example, that ownership is verifiable by anyone on the Bitcoin blockchain. This makes token ownership extremely hard to forge or tamper with, as it would involve hacking every copy of the ledger in existence — and good luck trying to do that.

In order to make a piece of digital art non-fungible, it has a unique digital protocol — a piece of computer code — built into its structure. With this protocol serving as a certificate of ownership stored on a blockchain, it’s extremely secure. As a result, no matter how many copies of a piece of digital art there may be, there’s only one NFT — which means you can sell and buy it as an ‘original’.

The NFT Market

This newly minted ‘original’ attribute of NFTs has caused quite a splash in the digital art world. Alongside Pak’s record-breaking NFT sale is Mike Winkelmann — also known as Beeple — who, in 2021, sold an NFT titled Everydays: the First 5000 Days for $69.3 million to a single buyer. What’s more, with the French firm Sorare selling football trading cards as NFTs for $680m, it’s fair to say that there’s a dynamic mood in the NFT market.

Then again, it’s still a relatively new market for both investors and creators alike. Remember the dot-com bubble, when internet companies that consisted of little more than a laptop and a logo were selling for hundreds of millions of dollars? That’s a bubble that most certainly burst.

That’s not to say that the NFT market will necessarily follow the same pattern; however, there are signs that the fervor surrounding NFTs may have plateaued somewhat. Although there are still huge newsworthy sales occurring, when we look at the number of active digital wallets — a digital wallet being the tool used to store NFTs —   we see a marked reduction in activity. During a typical week in 2017, there were over 34,000 active wallets; however, during a typical week in 2021, there were between 8,000 and 12,000 active wallets.

That said, while the NFT boom period may well be behind us, NFTs as a reliable investment are probably here to stay. Certainly, with the metaverse well and truly on the horizon, NFTs in the form of virtual real estate are a fast-growing market. With Republic Realms, a virtual reality company, having recently paid $4.23 million for virtual property in The Sandbox’s metaverse, it seems that NFTs are spreading their virtual wings.

Some Trending NFTs to Look Out for

Despite the increased scope of NFT investments, it’s still the world of digital art in which they’re most prolific at the moment — and for the budding investor, there’s no shortage of promising NFT projects, both upcoming and established to consider. For example…

Souls of Nature

A forthcoming project with no actual NFTs for sale at the moment, Souls of Nature is a great way of getting involved in an NFT project early when the prices will still be relatively cheap (hopefully). While there are plenty of up-and-coming NFT projects out there, Souls of Nature has a particularly strong following on Twitter and Discord.

The reasons for this are numerous but include the fact that a percentage of the project’s NFT sales will be donated to help safeguard wildlife around the planet. With the NFTs themselves being digital representations of animals that can be used in the metaverse in a ‘play-to-earn’ capacity, the NFTs are an innovative addition to metaverse culture. With 9,271 NFTs in the collection, the first Souls of Nature NFTs are set to be on sale in the latter half of 2022.

However, if dabbling in untested NFT waters isn’t quite your thing and you’re looking for a safer, more established investment, there are plenty more to choose from.

Bored Ape Yacht Club

One of the most famous and sought-after NFT collections around, Bored Ape Yacht Club consists of 10,000 unique NFTs, each of which is a cartoon of a bored-looking ape. While that may not sound like the most evocative subject matter for an artistic investment, Bored Ape Yacht Club has experienced phenomenal success worldwide, making its NFTs some of the most attractive investments in the market.

However, as with most NFTs of this stature, the assets are pricey. With a 2021 auction seeing 101 Bored Ape Yacht Club NFTs selling for over $24 million, you start to understand why large groups of people band together — as they did with Pak — to purchase NFTs as a collective investment.


Launched in 2017, CryptoPunks is one of the oldest NFT projects. Although their NFTs weren’t initially in high demand, as the NFT market grew, so did the appeal of CryprtoPunks and their 8-bit-style pixel art images of punks, zombies, and aliens.

With Cryptopunks ownership popular with any number of high profile celebrities, from Jay-Z to Logan Paul, they have an accordingly high purchase price. While the most expensive CryptoPunk NFT in 2021 sold for $11.75 million, the entry price for one of their NFTs is around the $200,000 mark.

Girls, Robots, Dragons

Another up-and-coming release with genuine investment potential, Girls, Robots, Dragons is a collection of NFTs depicting fantasy art. Created by well-known artists who’ve worked on projects ranging from World of Warcraft to Star Wars, the NFTs aren’t just collectible art but a part of a Dungeons & Dragons-style game.

With a total of 3,000 NFTs per collection, the pre-sale price for Girls, Robots, Dragons is set at 0.06ETH (about $74), making it a realistic, low-risk investment for pretty much anyone.

NFT Culture

The proliferation of apes, zombies, punks, and dragons on this list should probably tell you a great deal about where the aesthetic heart of current NFT culture is. However, as with most art investments, personal taste runs second place to potential profitability — so whether or not you’re a fan of zombified punks, there’s a lot of very traditional, old-school profit to be made from them.

With little cartoons of aliens and penguins selling for the kinds of multi-million dollar price tags normally associated with the great masters, it’s a good bet that Van Gogh would have cut off more than his left ear if he was around to see it. Maybe he’d even digitally reproduce images of his discarded ear and launch them as his own set of NFTS. We’d have bought one of those — that’s for sure. After all, it’s revolutions like NFTs that make the art world such a thrilling investment.

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