In the wacky world of cryptocurrencies, where dog-inspired coins mint millionaires and companies issue their own online currencies, non-fungible tokens – NFTs – stand out as a particularly bizarre phenomenon.
NFTs are proof of ownership of a range of digital assets, acting as virtual share certificates. When NFTs are bought or sold, transactions are listed on a digital register known as a blockchain.
The tokens cannot be replicated, making them unique and in some cases highly valuable. Sales of NFTs so far in 2021 have reached $13.2bn (£9.6bn), according to DappRadar, a cryptocurrency data site. They are most commonly paid for in Ethereum, the second largest cryptocurrency, behind Bitcoin.
One person on the inside of the booming industry is Josh Sandhu, 31, from Cardiff, who has been trading NFTs since 2019 and first invested in cryptocurrency in 2011. A big recent win came from buying “CryptoDad” NFTs, a collection of 10,000 animated middle-aged male characters.
“I spent $2,000 after seeing that the creators had a big following on Discord, a chat site, as well on Twitter. One of the selling points was that they had ‘utility’, meaning that they had real-world value. For example, there were talks about Netflix and Fox making a TV show based on them, which would pay royalties to CryptoDad owners,” he said.
Mr Sandhu, who works for Grove Square Galleries in London, sold six of his 12 CryptoDads this year to bank $75,000 in profit.