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How did non-fungible tokens come about?



From colorful coins to bored monkeys: The fourth edition of the "Funny Money" column provides information on the purpose and use of non-fungible tokens (NFT), how digital art became a status symbol and what buyers should be aware of.


Technically speaking, NFTs are basically markings on a blockchain. They are clearly assigned as possession to a specific wallet. Regardless of whether Bitcoin, Ethereum, Solana, Cardano, Polygon or xDai: The right of ownership can only be enforced within the same cryptographic system - a very weak value proposition if it weren't for the human factor and different tastes.


The phenomenon first appeared on the Bitcoin blockchain. Around 2014, coins were simply marked with a color and as if they went down in blockchain history as "Colored Coins".


However, the concept had to struggle with high transaction fees from the start. Few users wanted to spend Bitcoin to exchange the colored coins. The particularly popular Ethereum NFTs still have the same problem today. For the transfer from one Ethereum wallet to another, gas fees of up to 100 euros can easily be incurred. But the user base, which has grown significantly in the meantime, can be worthwhile: Those who buy into the right NFT project early on can achieve top prices when reselling.


Bored monkeys as a status symbol


The market leaders show how it's done: The NFT series Bored Ape Yacht Club (BAYC), which is limited to exactly 10,000 pieces, were initially sold for 0.08 Ethereum each. In the meantime, more than 250,000 ethers, i.e. more than a billion euros, have been spent on pictures of bored monkeys. On average, BAYC's NFTs currently cost as much as a small apartment. The four makers also benefit from this, because when they are resold they automatically receive a fee, which is deducted from the total price by means of a smart contract.


The owners enjoy the unique features of their personal monkey. These can be randomly selected attributes, such as special sunglasses, a colorful hat with a propeller or different picture backgrounds. The beauty always lies in the eye of the beholder.


The monkeys are ideal as a status symbol because the price is immediately clear. More and more users of messenger services are now using their favorite NFT from


Metaverse and eternal toilet walls

This is also cheaper: Right-click, select Save and set it as your profile picture. Ready. However, there is an additional benefit that only the 10,000 owners of real BAYC NFTs can claim: A visit to the virtual world of BAYC makes it possible to scribble something on the virtual toilet wall that nobody can ever delete. Ultimately, the Metaverse is also very human.


NFT for the mass market are inevitable


However, many industry observers understand the BAYC as a successful proof-of-concept for modern brand development. Blockchains such as Cardano, Polygon, xDai and Solana, on which transaction costs hardly play a role in the creation and exchange of NFTs, open up the mass market for NFTs outside of the digital art scene. Obviously, this also makes counterfeiting digital branded goods attractive, so keep your eyes peeled when buying an NFT!

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