Will the enthusiasm subside? NFTs, which have been highly publicized in recent months, have not been spared by the cyclone which has caused the value of crypto-assets to fall far from their peaks. On this highly speculative market, such a household seems welcome. In 2021, NFT exchanges had exploded, against a backdrop of soaring prices, to reach 17 billion dollars in transactions, according to the specialized site Nonfungible.com. The beginning of the year had set the tone since in March, the artist Beeple had obtained, during an auction organized by Christie’s, 69.3 million dollars for one of his digital works. Entitled “Everyday: the First 5,000 days”, it consists of an assemblage of digital drawings that the artist had made daily for more than thirteen years. This sale was made possible thanks to the NFT or “non-fungible token”, translate non-fungible token. It is a token, like cryptos, in other words an asset that is exchanged and recorded on a blockchain, a decentralized digital ledger. But unlike bitcoin or ether, an NFT is non-fungible, which means it is unique. So much for the technical aspect.
Concretely, “it is a technological standard which certifies the authenticity of an underlying, explains Faustine Fleuret, president of ADAN, an association which represents players in the digital asset sector. underlyings can be very diverse”. Image, video, tweet, digital map of a football player, plot of land in a virtual world called a metaverse… The field of possibilities is wide.
The interest? “Exchanging rarity,” says Faustine Fleuret. A tricky concept in the digital world where nothing is simpler than copying and pasting to appropriate a file (image, sound, etc.). The NFT makes it possible to associate a piece of data (an image for example) with a person. The system is timestamped: if someone creates another NFT from the same image, it will be easy to know which is the first and therefore the original. “It’s a new form of deed of ownership” summarizes Daniel Villa Monteiro, educational director of Alyra, the blockchain school.
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Harder to profit from an NFT
The outlets are obvious in the art sector, which quickly appropriated the concept. But the big brands are also very interested in the subject in the video game, e-commerce and even luxury industries. However, the sector is still embryonic: according to a study by KPMG France for ADAN, only 15% of French people have already heard of NFTs, compared to 76% for cryptoassets.
However, acquiring NFTs is not insurmountable. Taking advantage of it will, however, be more random. “In the world of art and collecting, part of the value is subjective and it is not specific to the world of cryptos”, underlines Faustine Fleuret. The fad on some NFTs can indeed dry up very quickly. Thus the buyer of the first tweet of the co-founder of Twitter, Jack Dorsey, valued at 3 million dollars in March 2021, put it up for auction last April. The bids did not exceed $30,000…
If the sharp decline recorded in the crypto market – and on which NFTs depend – encourages you to buy some, to take advantage of an adjusted price, you must first know where to find it. Some trading platforms have become essential in this market, such as OpenSea or even Rarible. These are sorts of Good Corners of the NFT… And like this reference site, they do not guarantee to get a good deal, nor to have a serious seller in front of you. It is therefore necessary to try to find out as much as possible before taking action. It should be noted that some artists also sell NFTs directly and that traditional art houses are also starting to offer NFT sales. Once your NFT has been spotted, you have to move on to practical things. Because an NFT is paid for in crypto-assets. The most used blockchain in this area being Ethereum, you will need to obtain ether from a broker such as Binance or Coinhouse. You will house them in a “wallet” (an electronic wallet in which to store your cryptos), which will also be used to store your NFTs. One of the most frequently used is called MetaMask.
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Ease does not prevent mistrust. “One of the main problems is theft, says Laurent Gayard, author of the book Understanding NFTs and Metavers. Sometimes people recover images, or even appropriate images from other artists and put them in sale in the form of NFT.” If the platforms are looking into the subject to try to identify the “fakes”, in the event of a problem, do not count on them to provide after-sales service. Finally, it happens that some collectors have their wallets hacked, although they are encrypted. In the event of acquisition of high-value NFTs, be careful to protect them well. For this, it is better to opt for a cold storage system, that is to say not connected to the Internet.
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