What do former Twitter Chief Executive Officer Jack Dorsey and Keralite software engineer Faisel Kachappilly have in common?
To put it simply, both have explored the possibility of trading nonfungible tokens (NFT) to earn money.
An NFT is a unique digital certificate that states who owns a photo, video, or other forms of online media. Each NFT is unique and cannot be duplicated.
Dorsey sold his NFT - his first tweet published on March 21, 2006 - for the equivalent of $2.9 million in March 2021. It was bought by a Malaysia-based businessperson in ether cryptocurrency, a rival to the first cryptocurrency, bitcoin.
The sale aroused Switzerland-based Faisel’s interest in NFT. So he minted an illustration of jackfruit seed, or Chakkakkuru, as an NFT. Much to his surprise, it fetched the equivalent of Rs 73,600 ($980) in a single day.
Into the NFT world
Faisel, who began his career as a graphic designer, in fact, illustrated jackfruit seed to understand the inner workings of the NFT market. After providing the finishing touches, he listed it for sale with the title “Chakkakuru- Treasure of a Jackfruit”.
“I was amused by the prospect that the screenshot of an old Dorsey tweet could be so valuable,” Faisel said.
A native of Chalakkudy and a technology enthusiast, Faisel had always been keen on studying the cryptic world of blockchain technology.
He fervently studied the rapidly evolving world of digital asset class and blockchain technology and even took a course to learn about Ethereum and its programming language Solidity.
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform.
“I'm not a trader like many others interested in cryptocurrencies and NFTs. I decided to invest in cryptocurrencies to understand how it functions,” Faisel said.
“Every unit of chakkakuru was valued at $4.39. The value was subject to fluctuations as it was valued in ETH coins under Ethereum. I used Opensea website for listing the NFT for sale.”
“ If I was posting it under the Ethereum blockchain, I would have to incur a gas fee for posting my item as a creator,” he said.
Gas fees are payments made by users to compensate for the computing energy required to process and validate transactions on the Ethereum blockchain.
“Since chakkakuru was an item created for testing I used another framework, Polygon, to avoid the gas fees. But we have to pay a fee if and when we withdraw the proceeds generated,” he added.
A few of my friends who regularly trade online purchased chakkakuru to humor me. Besides them I never suspected anyone to be interested in buying a 'chakkakuru' illustration as an NFT.
But when I returned from work in the evening, I was shocked to find that someone had purchased some 200 NFTs taking the whole proceeds to $980.
Evolution of NFTs
NFT was initially conceived to eliminate the revenue loss incurred by artists from the sale of their creations through middlemen and decentralise the process of buying and selling such items.
“For example, a photographer will not receive the entire revenue generated from his photograph if he sells it through Shutterstock or iStock. But eventually, people began trading NFTs. An NFT may be anything from an image to a gif or video,” Faisel told Onmanorama.
There are many platforms for trading NFTs. Some platforms like Binance allow only pre-registered users to trade in their exchange.
Faisel’s experience is not an isolated one. With celebrities embracing it as a means of wealth generation, NFTs worth millions are being traded across the world.
Rapper and entertainer Snoop Dogg on Monday put for sale on SuperRare, digital art market on Ethereum, his first NFT 'Decentralised Dogg' in collaboration with artist Coldie.
This stereoscopic 3D collage of 10 different portraits of Snoop Dogg lasting a few seconds has already generated about $771,000 at current prices.
At the national level, 'Madhusala', a clip featuring Amitabh Bachchan's recital of his father's poetry, was sold for $756,000.
Apart from the monetary gain, NFTs offer a source for celebrities to increase the reach of their work.
Sonu Nigam recently launched his first English song 'Hall of Fame' in the NFT market.
What is perplexing about NFTs to traditional investors is the lack of copyrights and the possession of a tangible asset at the end of the purchase.
But as the case with bitcoins and other cryptocurrencies, tangibility is the last concern NFT investors have in mind. It is the immense possibilities of the virtual world and digital assets that they are keen to acquire.