Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

It has been over two years since non-fungible tokens (NFTs) came into attention and just over a year since the artist Mike Winklemann, otherwise known as Beeples, sold his NFT for $69million and made him the third most valuable living artist. However, the most expensive NFT ever sold was ‘The Merge’, by Pak, which was acquired by a consortium of over 28,000 buyers for $91million.

The hype built around NFTs makes it difficult for some to have an understanding, and many others get the wrong idea about these digital assets. For instance, some think of it as a Ponzi scheme and struggle as to why NFTs have attracted the interest and money that they have to date. The below table shows the total turnover of those NFTs that have been in excess of $0.5billion, as well as showing the numbers of buyers and number of transactions todate.

NFT collection rankings by sales volume (all-time)


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Source: Cryptoslam

A brief explanation of NFTs is that they are unique codes which prove ownership of assets using blockchain technology. Anything can be an NFT, be it pictures, songs, videos, contracts, tickets, even data such as details about your home or your vehicle. NFTs have diverse use cases and are being used globally by different industries in many jurisdictions as well as major brands such as Adidas, Nike, Hermes. Below are some of the different uses for NFTs:

  • to sell tickets directly to people

  • to help content creators connect with their audience

  • for the identification and verification of health documents

  • for the representation of academic credentials at a time when falsifying academic records is still an issue.

  • for deployment across a supply chain

  • in artwork tracking

  • to transfer and record the ownership of properties - this covers intellectual and landed properties and patents.

With the different types of NFTs being established, it should be noted that there are many NFT marketplaces - i.e. some are niche-focused, whilst others are general marketplaces. The biggest NFT site is OpenSea, which has seen its value rise to be worth over $13.billion compared to only $1.5billion six months ago.

NFT landscape

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Source: NFT TECH

Other significant NFT platforms include:

  • Rarible - with a ‘Spotify-like’ layout, this NFT marketplace is primarily focused on digital collectibles. RARI is the governance token here

  • Crypto.com - this allows users to trade digital collectibles from brands and celebrities

  • Foundation - with over a year in operation, most viral meme NFT sales, such as Pak’s Finite, Nyan Cat, etc, happened on Foundation

  • ZORA - a decentralised auction focused on helping artists take back the value which most brands, labels, or galleries take traditionally. Zora is built on ERC-721, which is the common standard for NFTs

  • SuperRare - this is a P2P marketplace focused on the trading of single edition artworks

However, unsurprisingly, there are both advantages and disadvantages of dealing with NFTs.


  • easy authenticating and record of ownership

  • NFTs can generate on-going income for the owner of intellectual property (IP) - similar to music royalties - as each time the NFT is re-sold, the creator can earn a % of the sale price

  • marketplace efficiency

  • since NFT stands for non-fungible tokens, the non-fungibility aspect makes them irreplaceable

  • profit potential

  • fractionalisation of ownership of physical assets

  • NFTs offer a new way to have greater diversification in an investment portfolio


  • uncertainty in value as the purchase does not always translate to ownership of the copyright 

  • NFT prices are volatile and can be illiquid

  • the value that comes with owning actual physical art means it cannot be digitised

  • from an environmental standpoint, some blockchains can be energy intensive - this has serious implications for the environment

  • NFTs can be used fraudulently with people selling them without the owner of the IP being aware

  • there can be legal challenges as to what rights an NFT confers

Some feel NFTs, will fizzle out as it is thought to be a Ponzi scheme. However if anything, we could see NFTs being used in the metaverse - which is something Citigroup believes could be worth up to $13trillion by 2030 alone. Art has only ever been worth the value its collectors and proponents place on it. When recently talking to Jai Patel, CEO of Kasei Holdings, (quoted on the AQUIS exchange and managing a portfolio of cryptos), he explained that: “NFTs can be seen as similar to car number plates. The most expensive number plate for sale is in California MM selling for $24.3million and you cannot even see it when you are driving your car. But is does have an NFT etched on the back of the number plate. Then again if you are able to afford $24.3million for a number plate you may are possibly not driving but being chauffeured”. 

NFTs have captured the imagination and indeed the headlines as with any asset class it has also attracted its fair share of nefarious characters. In essence we are only really beginning to understand how NFTs can be used in a variety of situations, yes there are legal challenges such as the potential court action between Rothschilds and Hermes. However, these concerns do not appear to have dissuaded luxury brands from being involved with NFTs as can be seen by the recent announcement in the F1 world as Mercedes looks to issue NFTs with FTX at the Miami Grand Prix. However, regardless of this, if you plan to invest in NFTs, do so responsibly to avoid being financially, mentally and emotionally bankrupt yourself and try to avoid the brouhaha and fancy marketing campaigns.