Sydney’s house prices are high enough, but at least at the end of the process (if you ever manage to make it there), you end up with a home you can live in, renovate, or rent out.
But a house has just sold online for an eye-watering US $500,000 (AU $655,000), only it doesn’t exist in real life at all — it’s merely a digital render of a virtual property called Mars House, that’s situated upon a planetary landscape.
Designed by Toronto-based artist Krista Kim, made with the help of software commonly used by architects and video game designers, Mars House’s ownership was recently exchanged for 288 Ether, a cryptocurrency with an equivalent value of $655k.
Though images can be seen of the house online, the buyer will receive the 3D `files which they can upload to their ‘Metaverse’, before being able to explore the digital mansion in full. They’ll never actually set physical foot in the property, which is a bummer because it sounds pretty awesome.
According to the designer, Mars House comes fully furnished and is crafted from light sculpture, tempered glass and fabrics — all renewable materials. Its ceilings, walls and floors are constructed from micro-LED technology, and the home’s purpose is to enhance one’s health and wellbeing. It’s being dubbed the “first NFT digital house in the world”.
It’s a huge expense for something that’s not actually tangible, which is to say, perceptible by touch. But it’s not the first digital item to be sold for a motza. Twitter CEO Jack Dorsey has seen a $2.5 million bid for ownership on his very first Tweet, while a digital artwork from artist Beeple was purchased for $79.4 million recently.
We don’t really get it either, but we’re going to do our best below to explain what this is all about.
What is an NFT?
NFT stands for non-fungible tokens. It’s an emerging arm of the crypto-ecosystem, by which users online are able to purchase and thus own completely unique and irreplaceable digital items linked to the blockchain by the exchange of various cryptocurrencies.
According to Forbes: “An NFT is an entry on a blockchain, the same decentralized digital ledger technology that underlies cryptocurrencies like bitcoin. But unlike most bitcoin–which is fungible, meaning that one coin is essentially indistinguishable from another and equivalent in value–tokens on these blockchains are non-fungible. That means they are unique, so they can represent one-of-a-kind things.”
The NFT market was worth around US $42 million in 2017 but had increased 705% to be worth US $338 million by the end of 2020, according to a new estimate from Nonfungible.com.
Examples of an NFT
An NFT can be anything really; a house, an artwork, sculpture, piece of clothing, or a song or sound snippet. The market and the available stock grows daily, and there’s really no limitation to the digital items that can be sold as NFTs.
Talented designers from all over have gotten involved (anyone can make an NFT), while high-profile artists and celebrities have also jumped aboard the NFT train. Flume, Grimes, Paris Hilton, LeBron James; they’ve all taken to the new trend.
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Are NFTs here to stay?
At this point, it’s hard to say. Users have certainly taken to NFTs, and perhaps the COVID-19 pandemic could be attributed to the uptick in NFTs as a desirable exchange. With people not necessarily able to visit galleries, stores and museums to buy physical art, purchasing these pieces online could be the next best thing.
“We’ve seen collectible NFTs garner mind-blowing sales numbers over the last months, but relying on a market consistently to invest hundreds of thousands or millions into pieces that offer nothing beyond collectability isn’t sustainable,” said Bryana Kortendick, VP of operations and communications at Enjin, to Finder.
“NFT collectors are investors; they expect their purchases to grow in value over time, which is where high functioning NFTs come into the picture. Beyond the hype, as more creators and businesses begin to understand the potential for NFTs to create sustainable business models, the NFT market will only continue to grow.”