NFTs Making A Splash -- And Big Bucks -- In The Art World And Beyond, But What Are They?
NEW YORK (CBSNewYork) -- A new cryptocurrency trend is exploding in the digital world.
They're called NFTs, and they are changing the way people sell and invest in art, music and collectibles.
"This has been a life changing experience and I'm just... blown away," said Chris Torres.
As CBS2's Natalie Duddridge reported, that was the moment realized his piece of artwork -- a cat flying through space - had just sold in an online auction for hundreds of thousands of dollars.
''It actually sold for what amounted to 300 etherium, a type of cryptocurrency, which equates to $560,000. It happened just last month, and I'm still stoked about it," Torrest said.
His creation, called Nyan Cat, is an NFT -- short for non-fungible token. It's the latest cryptocurrency craze. Think Bitcoin, but instead of holding a coin or dollar, you hold an asset, like art, tickets, music. It's basically a collectible, says tech expert Ian Marlow. He's the CEO of Fitech Gelb.
"Like a trading card. We used to have baseball cards that get traded. There is different values of those unique items, or limited production. There is a value people attribute to that, and that gets traded in real currency," Marlow said.
Except NFTs only exist as a digital file. For example, a video highlight of NBA star LeBron James dunking sold for $208,000. The rock band Kings of Leon are the first to release an album as an NFT. Jack Dorsey, the creator of Twitter, is selling his first ever tweet "just setting up my twttr" from 2006 for more than $2.5 million, and a collage of 5,000 pictures by digital artist Beeple is currently up for auction at Christie's. Bids have topped $9.7 million.
"I think why things have gone from zero to 100 so fast is because the art market offers lots of examples like this where value is spun out of nothing," said Ben Davis, journalist at Artnet. "People have been looking for ways to fit together the art bubble and the tech bubble and this seems to be the latest most successful way."
Anyone can buy NFTs in an online marketplace. Just like buying stock, it's a gamble.
"If they believe in it and they believe it has value, like many of us do for stocks or paintings or classic vinyl albums that are suddenly worth a lot of money. This is that digital version of that," Marlow said.
One of the biggest benefits for creators of NFTs like Chris Torres is every time that digital file is resold, the artist is paid -- kind of like a royalty. And NFTs can't be faked or stolen because they come with an encrypted code.
Like any new trend, it's anyone's guess if NFTs are here to stay.
The world's first major NFT art exhibition is in the works, accessible from anywhere.