Introduction to NFT Keys
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Hello everyone and welcome to another episode of BUILD, a podcast by Numeramesh. In this new episode we will be introducing the concept of NFT keys. This is the perultimate episode on concepts related to blockchain.
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The next episode will focus on server and then we will take a closer look at the metaverse over several episodes before moving on to topics related to artificial intelligence. For this episode I will be alone so I hope you won't.
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I won't bore you too much. I have taken some notes and I will introduce you to what NFTs are and my vision. First of all, thank you very much to everyone who listens to us. It warms our hearts and feel free to leave five stars on Spotify or Apple podcast. There now you can do that using your phone. It takes five minutes, you know, so thank you so much.
Journey into NFTs
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I'm going to explain a little about how I discovered NFTs and my interest in them, how I see NFTs and why I think they're interesting. I discovered Bitcoin in 2017, in the summer of 2017 to be very precise. Then I'm not going to rehash the story because I did it in episode 1.
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The first episode of this podcast I created a student association and then I worked for different companies in the blockchain field and I used to since the summer of 2017 keep an eye on all the companies, launching betas,
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raising funds and generally creating new concepts. One day, while surfing the web, I discovered Surr. So I quickly found out what Surr was about and registered in the platform. When I went back to my LinkedIn message, when I
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prepared this episode I noticed that I was the one who had a problem with Metamask which seems to have more to do with my computer because I wanted to deposit 200 euros on server and I have written to the support of server hey I have an issue with my Metamask can you help me etc etc and Nicola Julia sent me a message asking if everything had been sorted out and
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congratulating me on my initiatives via Cryptosphere. I will develop this
Understanding NFTs
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in the next episode. Anyway, I discovered NFTs when I found out about server. So I will start by introducing the definition of an NFT. As I do for each episode of this podcast, I'm going to publish an article on numero.com, which will include the complete review of NFTs.
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so let's get into it and start by understanding what exactly are NFTs and why are they causing such a steer in the digital world so to kick things off let's break down some essential terms so what is an NFT?
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An NFT or non-fungible token is a unique digital asset stored on the blockchain, unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible and interchangeable. NFTs are one of a kind and cannot be replicated. They provide indisputable proof of ownership, allowing creators to tokenize their digital creations and sell them securely and transparently.
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No, you might be wondering what's the role of blockchain in all of this? Well, blockchain serves as a decentralized and secure ledger that underlies
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NFT transactions. It's a distributed database that records every transaction in a transparent and temporal resistant
Role of Smart Contracts
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way. We have explained in detail more about blockchain concepts in one of the previous episode with Sam. And this system of blockchain ensures the authenticity and traceability of NFTs, giving creators and buyers confidence in the ownership chain.
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But how these transactions get executed seamlessly? Smart contracts are self-executing contracts with the terms of the agreement directly written into code. Smart contracts are bottom-made and enforce the terms of transactions on the blockchain. They play a pivotal role in ensuring that once an NFT is sold, the creator receives their fair share and the new owner gains full control over digital assets.
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You can think about the smart contract the same way that you can think about an automatic machine that give you a can when you enter a coin of 2 euros. So you put your coin inside the machine. You ask for the number 57. The number 57 is related to the Coca-Cola.
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As long as you have put two euros and selected the number 57, you will receive your can. And this is how smart contracts work. Now that we have a clear understanding of these key terms, let's dive into the concept of ownership.
Digital Ownership and Monetization
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The concept of digital ownership is revolutionary. NFTs allow creators to establish true ownership of their digital creations. Before NFTs, digital files could be easily copied and shared.
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making it challenging for creators to monetize their work. With NFTs, ownership is recording on the blockchain, providing a unique and verifiable link between the creator and the digital asset. So how does it work? For Sorer, for example, for Sorer, Sorer is using the private and their public key. So think about it like a letterbox. I think it's a concept that we have also spoken about in the previous episode.
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Sorer has a letterbox. There is the public key that is where you can receive some letter and where Sorer can receive some letters. So this is public and there is the private key. Sorer is taking a picture of player, a football player in the case of Sorer and is linking this football picture.
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with a transaction by using the public key and the private key. This use of the combined public and private key is creating a signature saying me, server, owner of this public key. I'm minting an NFT that is a picture of Leondel Messi, for example.
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and then it's recorded everyone can see that it was server because it's always the same address or the same addresses that they are using and that they are linked to server and me if I want to buy a card I do exactly the same I use my public key and I use also my private key to send crypto to server I use my private key to sign this transaction
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So I raise receiving my crypto and in exchange they send me the card and then I can send this card to Any person that I want and depending of the scarcity of the card. There are cards that are unique. There are cards that are Minted with 10 editions. There are cards that are minted with 100 editions.
NFT Scarcity and Value
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There are cards that are minted with 1000 editions and
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this can be verified on the blockchain and everyone can see a card how many times this card has been minted and so this is how it works and that's why it's a fair system
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so now what about scarcity because I have already spoken a bit about that you can decide and the creators can decide so in the digital world scarcity is active
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through the limited insurance of tokens. Each card in the case of Sora is a token, so when a creator meets an NFT, they determine the total supply making each token a scarce and valuable digital item. This card city contributes to the perceived value of an NFTs, much like rare collectibles in the digital.
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in the physical world because of course the more scarce and the more rare is a painting or a coin or a token in the case of the blockchain and NFTs the more people want this piece logically so this is about the scarcity
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And if this didn't just appear overnight, their roots trace back to the mid 2010s. In these early days, the concept of tokenizing, digital assets began to take shape, cryptocurrency enthusiasts and tech visionaries started exploring ways to represent ownership of digital items on the blockchain.
Ethereum's Influence on NFTs
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The real breakthrough came with the launch of the Ethereum blockchain. Ethereum smart contract capabilities provided the perfect environment for NFTs to flourish. It was on Ethereum that the first NFTs were created, making a pivotal moment in the evolution of digital ownership today.
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I'm listening to podcasts and reading articles where people are explaining that they can also create NFTs on the Bitcoin blockchain. This is another debate. How is it done? What is the best blockchain to create NFTs? This is what also we work on currently on NumeraMesh to explain to
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project founders, what is the best chain for the projects, what are the pros of using Bitcoin, what are the cons of using Bitcoin, what are the pros to use Ethereum, what are the cons to use Ethereum.
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We will soon publish an article that would be available on the Numeramish website to explain what are the best practices that we have seen to launch an NFT project. But this is another topic. So one of the projects that I remember people were speaking about and buying with their Ethereums.
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was Cryptocities and is still exist. It's developed by Dapper Labs on Ethereum and it has been released in November 2017. So when I said earlier that I discovered NFTs, just so rare it's that I have personally bought my first NFT.
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That was a card on Surr but I have heard about NFTs before. Cryptokitties is a blockchain game developed by Kanajan Studio that's called Dapper Labs. The game allows players to buy, sell and create NFTs using an Ethereum. These NFTs represent virtual cats. The game's popular reach in December 2017.
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congested the theorem network, causing it to reach an all-time high in the number of transactions and slowing it down significantly. Dapper Labs was a spoon off from Axiom Zen. Both companies are based in Vancouver, Canada.
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Cryptocities is the first major game to use blockchains and one of the earliest examples of a blockchain project design for recreation. So Cryptocities creates slow down
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transactions on Ethereum. The game's developers told the Bloomberg News Agency that CryptoKitties was a key step to making blockchain more accessible because its popularity has underscored one of the technology's biggest downsides, its lack of scalability. Etherscan has reported a six-fold increase in pending transactions on Ethereum since the game's release.
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on the 28th of November, they said, Garic Hillman from the University of Cambridge said, CryptoKitties has become so popular that it's taking up a significant amount of available space from transactions on the Ethereum platform. Some people
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are concerned that a frivolous game is not going to be crowding out more serious and significant seeming business uses. An estimated 4.5 million has been spent on the cartoon cats
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in December 2017, so in two months. So what is a crypto-kitty? Think of this rather impalatable cartoon's kittles
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as unique digital Pokรฉmon cards. The game's developers describe them as breathable, bini babies, each with its own unique 256-bit genome. These cryptocollectibles are also gender-fluidable to play the role of either the dung, the dame, or the sire, the scythe, when bred together.
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The kitties' unique DNA can lead to 4 billion possible genetic variations. Some of the varieties created so far look life-like with gray-stripped fur and bulging green eyes. Other are speckled with neon boost balls or magenta pattern reels.
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How much are worst cryptocurrencies? In December 2017, the median or mid-rage price of a cryptocurrency was approximately $23. The games TopCat brought in December 2017 was $115,000 when it sold on Saturday to December.
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so crypto qt's can be bought using only ethereum the cryptocurrency that acts as the fuel of the ethereum blockchain network and to get started users must install a chrome extension called metamask or Yeah, another extension to act as a digital wallet and lets players send and receive ether from their computers
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and a term must be pushed from a cryptocurrency exchange or get via another way before it can be added to MetaMask or via another source.
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Why does it matter if crypto-kitties were slowing down Ethereum? According to ETHGaze station, the crypto-kitties game accounted for over 10% of network traffic on Ethereum and as traffic increases transactions become more expensive to execute quickly
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And Mr. Hillman said the real big issues is other major platforms looking for alternatives to Ethereum and moving to different systems. There is definitely an urgency for Ethereum to try and address this issue. And it's when we started to speak about other blockchains, other systems, proof of stake, et cetera, et cetera, that we will speak more about in another episode in the future of this podcast.
CryptoPunks and the 2021 NFT Craze
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But it was just to underline the fact that CryptoKitties has
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created the first technological, let's say, discussions and people were understanding, okay, we need to scale the Ethereum capacity and we need to release the better version of Ethereum to exchange NFTs and use Ethereum for more and more transactions.
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There was another project that was pretty famous and that is still famous. It's CryptoPunks. And CryptoPunks are a collection of NFTs.
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that represent punk and it's also on the Ethereum blockchain. So the project was launched in June 2017 by the Larva Lab Studio, a two-person team consisting of Canadian software developers Matt Hall and John Watkison. The experimental project was inspired by the London punk scenes, the cyberpunk movement and electronic music artists Daft Punk.
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The crypto art blockchain project was an inspiration for the ERC721 standard for NFTs and the modern crypto art movement which has since become a part of the cryptocurrency and decentralized finance ecosystems on multiple blockchains. Cryptopunks are commonly credited
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with starting the NFT craze of 2021 along with other early projects including as I mentioned Cryptocities, board, ape, yacht, club and the sale of people's every days the first 5 000 days. There are 10 000 cyberpunk tokens total on March 2nd 2022 and anonymous user donated
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CryptoPeng 5,364 to Ukraine's government, a theorem-wadded public address to help fund the Ukrainian government against the Russian invasion of Ukraine. On March 11, 2022, it was announced that all of the side of CryptoPeng's IP was acquired by Yuga Labs, parent company and creators of the board Ape Yacht Club project.
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for an undisclosed sum. Immediately, YugaLabs announced that they were giving full commercial rights to CryptoPunks owners. On 7th May 2022, the transfer was completed and the whole CryptoPunks marketplace was moved to the new YugaLabs own website.
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So the concept is that there are 10,000 unique crypto punks, 6,039 male and 3,840 female. Each one was algorithmically generated through computer code and thus no two characters are exactly alike with some traits being rather rarer than others. They were originally released for free.
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and could be claimed by anyone with an Ethereum wallet by paying only gas fees, which were low at the time. Most of the 10,000 cryptopunks represent humans, and there are also three special types, Sombi, Ape, and Adyen. There were some controversies as well, because in October 2021, a single energy transaction was made for
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$124,457 more or less $532 million at the time of the sale, regarding crypto punk $9,998, much higher than all previous NFT sayings, leading to speculation in social media that this could have been some kind of scam, a security exploit or money laundering. Larva Labs say that the purchase was made
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via a flash law where the NFT's owner brought the item from themselves with borrowed money, taking out and repaying the loan with a single blockchain transaction subsequently, invalidating the cell from the asset's history and from all related statistics.
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In early 2022, a fourth B auction for a single lot of 104 crypto banks was announced. The auction took place on 23rd February 2022, but its seller changed their mind 23 minutes after the auction began and decided to withdraw the auction to keep the whole lot. So I recommend also you to look
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after the Bored Ape project that is also called Bored Apes or B-A-Y-C.
Impact of Bored Ape Yacht Club
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That is an unfavorable token as well with the ERC 720 month standard and it's an NFT collection created by four friends who set out to make some dope apes test skills and try to build something ridiculous.
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it has been funded by the Sudanese Gargamel and Gordon Conner that describe themselves literally bros and it has been a big launch there were some investigation with the snake
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It has been received by popularity and popular people and collectors and also generates some criticism, some project that tried to copy the board ape. So I think it can be an episode by itself speaking only about the board ape.
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So I wanted to mention these two projects, CryptoKitties, CryptoPens, to say that artists and creators could now tokenize their work and buyers could own a unique PS of the digital universe. Anyone can create a token, anyone can decide what is linked to, what kind of image, what digital work, etc, etc.
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As the concept gained momentum, we witnessed the emergence of the first significant NFT projects. As I say, these early ventures paved the way for what we would discover a thriving ecosystem from
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digital art to virtual real estate NFTs were making their mark across diverse industries they are fashions that are also looking at NFTs as I said there is digital real estate with the central land with the Sunbox and different project so the central land is
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a world built by you where the only limit is your imagination and it's a virtual platform where you can buy virtual plots of land in the platform as NFTs via the Mana Cryptocurrency which uses the Ethereum blockchain. Decentralon was created by Argentinian's Ari Meylik and Esteban Ordano
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When it launched in 2017, parcels of digital land sold for about $20 and Maratouken sold for $0.02. The game's first map, Genesis City, was made up of 90,601 parcels.
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of land it raised 26 million dollars in its initial coin offering in 2017 an initial coin offering it's a kind of fundraising via crypto in April 2021
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and generally in 2021 any cryptocurrency and all not any but most maybe not most a big part of NFTs and cryptocurrencies has seen their prices go crazy and during a surge in popularity for NFTs par sales of decentralized sold between six thousand dollars and one hundred thousand dollars
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because of the relatively small pool of mana the currency is volatile and yeah it created some movement so I recommend you to check also the project Descent Randal and also the sandbox
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So yeah, Lucentbox is a video game that was acquired by Animoca Brands in 2018 and its name was used for a blockchain-based 3D open-world game of the same name that launched on November 29, 2021.
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So originally it was a 2D sandbox game for mobile phones and it's a game where players take the role of deity apprentice and sets about crafting their own universe through the exploration of resources such as water, salt, lighting, lava, sand and a glass and the user is given a single 2D screen as their canvas and apply these resources as pixels
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Once added to the screen, these resources interact in various ways, such as water mixing we've sent to create mud and lava burning other objects. The game also includes more complex elements, such as humans, wildlife and mechanical contraptions. The player is given challenges like making a battery or building an electric and circuit. Players can save walls they have created also.
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by uploading them to a building area it's free to play and micron transactions are required to unlock additional building elements so this is the original idea and i recommend you to check also the project the sandbox a user generated crypto and blockchain game you can monetize your nfts in the blockchain
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So this concept, as I said, gained momentum. And I think it's important to not forget the trailblazers who played the crucial role in popularizing NFTs. Early adopters and visionary artists recognized the potential of this technology. Their willingness to experiment and showcase their work as NFTs help spark interest and curiosity within the broader community.
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The journey from the early concepts in the mid 2010s to the creation of the first NFTs on Ethereum was at the end, just the beginning. Now let's zoom out.
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and taking a bird's eye view of the NFT market. As of 2024, today, I record this episode on Saturday, January 27, 2024. So end of January 2024, the NFT market has experienced unprecedented growth, evolving from a niche concept to a thriving ecosystem.
NFT Market Growth by 2024
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thousands of users even millions of users for some games and the market size has expanded significantly with millions of dollars being exchanged for digital assets daily and what's driving this exponential growth it's a question that is legitimate to be asked and
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What I think is that you don't want, for example, the day you will transfer your key, your car key to be copied and someone to open the car that you have if you didn't transfer the ownership of this car.
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It's really what NFT is about. The question is, what do you want the NFT to be? And I suggest you to think about an NFT like copycat of a real asset that you can transfer via a digital protocol. So if you want to own a cloth, you can transfer the digital property via NFT, the NFT technology, and you can link an NFT to a cloth that is physical, but you can also link an NFT to
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asset that is 100% digital that is the case for story for example so you can decide if you prefer the NFT to be linked to something that has a real presence in the physical world or if it's only digital. The recent trends that have shaped the market are
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the interrogation of NFTs into mainstream culture and it has been also influenced by high profile individuals entering the space because what we have seen in the past is that people with high worth included and injected money
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And that's why the market dynamics, platform adoptions, community engagement, the impact of technological adjustments as we discussed before with the evolution of Ethereum, etc. All of this have played a role in the NFT construction.
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One of the most revolutionary aspects of NFTs has been their description of the traditional art world. Artists now have a new canvas, the digital realm. High profile NFT art sales have made headlines globally, showcasing the potential for digital art to become a legitimate and valuable form of artistic expression.
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Artists are leveraging NFTs to reach a global audience and redefine the boundaries of creativity. So I have taken a look of the sum of the most expensive NFT ever sold.
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While the market was at its peak, some NFTs fetched jaw-dropping price tags against them with the most expensive NFT getting sold for over 90 million US dollar. The number sounds massive and you would be surprised to know that this was not the only NFT that was sold in millions. So I have listed two of them.
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So we are ready to know about the world's most expensive NFTs in the world. Let's dive in directly. So one of those is the merge by pack done.
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record and the most expensive that has been sold for 91.8 million of dollars and this you can find this information from the website nifty getaway an online auctions platform
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And since March 2020, the record of this sale belongs to Bipol. The name of the art creation is the first five thousand days
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that had been sold for 69 million dollars so there is a difference because the artist that is anonym that is anonymus pack he
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already has the price let's say or the record of the higher price for an NFT that is called the merge it's a really singular one and its creation has been fought to gather 266,445 unity so digital units
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and all of this fusion his idea is that or her idea is that it will become only one creation so every buyers in total 28,984 buyers they have bought the 266,445 units and they have received an NFT
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that is composed by the unit that they have acquired during the cell. And all of this created the final piece that is the merge. The unit, the numerical unit was initially sold $400 to new buyers.
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Amateurs had already some work from this artist and the price was $299 by UNIT that was proposed in a kind of early bird access to the sail. But the UNIT has rise
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of $25 every six hours and at the end the unit has finished to be sold for a price of $575. So the project could stop here and the sage but it's also because of the evolution of its project that PAC continued to create public interest and the creator continued to
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create dynamism and propose a secondary market where collection, the people that collect can sell their NFTs. In this case, the acquisition of an NFT create a new and a unique NFT that is a fusion of all the wallet of a buyer. And what is the reward, the Ultimo reward, the person that collect
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and that has the bigger collection would be rewarded by your second and exceptional NFT, LALFA. A title that can change depending on the fluctuations of the market.
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If this work has created some doubts because of the record, it can also be created as the most expensive collection sell by an artist that is living.
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The title of the record before this was Jeff Kuntz that has generated 91 million dollars when he saw the rabbit. So the new definition of art, what I want to say by this is that the new definition of art and the market are debated and it's something in construction.
Beeple's "Everydays" and NFT Art Market
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Then we have what I have spoken about earlier, every days. The first 5000 days. It's a digital work of art created by Mike Winkelman.
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known professionally as BIPL. The work is a collage of 5,000 digital images created by Winkelmann for his Every Days series. Its associated non-fungible token was sold for 69.3 million at Christie's in 2021, making it the most expensive non-fungible token ever.
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Every Days was purchased by Singapore-based programmer Vignesh Sundaresan, a cryptocurrency investor and the founder of the Metapurse NFT project, also known online by his pseudonym MetaKoman.
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Sundaresan paid for the at-work using 42,329 ETH. Both the buyer Sundaresan and the seller Wing Kelman had a vested interest in driving up the price of the work in order to bring attention to and drive sales for a speculative asset related to 20 other BPOL works which they called B20 tokens.
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The price of these tokens, in which Sundaresan held the majority's stake, reached its peak during media coverage of the everyday auction and subsequently collapsed. Because of this, some observers have described the auction as purely a citizen and a scam. Sundaresan receives rights to display the artwork but does not receive copyright.
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he has displayed the artwork in the digital museum within the Metaverse, which the public can view through a web browser. The composition, Lincoln Mann, was inspired by British artist Tom Jude and began the daily project on the 1st of May 2007. Some of the images involve figures from pop culture, including Jeff Bezos and Donald Trump, and are arranged chronologically.
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chronologically. Some of the earlier images are hand-drawn and not computer-produced. In an article published to ArtNet, art critic Ben Davis asserted that some of the 5,000 images comprising the world revealed various racial
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misogynistic and homophobic stereotypes. Will Gompertz consider Winkleman a talented exponent of the comic book Aesthetic and compared his work to Hieronymus Bosch and Philippe Guston. He predicted that the work would be regarded either as the moment before the short-lived crypto-art bubble burst or as the first chapter in a new story of heart of art.
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So these two examples were to show that NFT collectibles have become a cultural phenomenon.
NFT Collectibles as Cultural Phenomena
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From virtual trading cards to unique digital items, collectibles have captured the imagination of online communities. NFTs collectibles have risen and communities have formed around these digital treasures.
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You can imagine owning a PS of the digital world. Virtual real estate offers precisely that. This unique form of NFT investment involves acquiring parcels of virtual land with decentralized virtual worlds. We have touched the concept before and we can explore its potential as both a creative outlet and an investment opportunity.
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From high-profile art sales to the emergence of virtual real estate, the NFT market is a dynamic and diverse space. I wanted to bring this to your attention. I hope that you have learned something new during this podcast. This has been 40 minutes.
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a bit more that we are speaking about NFTs. Don't hesitate to tell us what are your favorite NFTs project on Twitter, on LinkedIn, and see you for the next episode that will be about server. Until then, walk well, take care. Ciao.