Blockchain technology has created a marketplace for unique digital works that can be sold at sky-high prices.

Born 10 years ago, Nyan Cat - an animated flying cat with a Pop-Tart body - by author Chris Torres, has been viewed and shared hundreds of millions of times on the Internet.t.

However, last week, the author released a unique version using NFT (Non Fungible Token) for sale on Foundation, a website for buying and selling digital goods. As a result, it was purchased by a user in cryptocurrency for $580,000. "I felt like I was going to explode," Torres said.

Painting Nyan Cat by Chris Torres. Photo: WSJ.

NFT technology has opened a new height for the market of trading digital products, or what can be called virtual items. Essentially, NFT is a cryptographic token on the blockchain that represents a single asset class. In other words, it has the unique attribute of proving ownership of a digital item. It helps that the items are unique, cannot be duplicated.

Many NFT items have been selling for high prices recently. For example, a clip of LeBron James blocking a shot during a Lakers basketball game sold for $100,000. Or this month, actress Lindsay Lohan sold an image of her face for more than $17,000.

People have long attached emotional and aesthetic value to material goods, such as fine art, and are willing to pay a lot of money for them. But digital products do not have the same value because they are easily copied, shared and stolen.

However, NFT changed that, it created a unique, official copy of digital products, allowing artists, musicians, influencers to earn more.

NFT buyers are collectors and aficionados who want to show off their auctions on social media. Others are investors, trying to make a profit when the price of cryptocurrencies rises. Many people view the NFT market as a form of entertainment that incorporates gambling.

The NFT market started to grow last year, with more than 222,000 participants, $250 million worth of sales, quadrupling from 2019, according to Nonfungible, which tracks the market. During the pandemic, in addition to traditional channels, investors are also looking for more risky and secret places to check profits. At the same time, rising cryptocurrency prices mean more Bitcoin millionaires have money to burn.

Justin Blau, a D.J., and his art director, Mike Parisella, began selling unreleased songs with exclusive visual effects as NFTs, and grossed over $1.1 million. He recently announced plans to offer a full album as an NFT.

Griffin Cock Foster founded Nifty Gateway, a website for buying and selling NFTs, in 2018. The company was acquired by Gemini, a cryptocurrency exchange, for an undisclosed amount. To this day Foster, 26, still runs the company.

“My college friends mocked Nifty Gateway when we started out,” he says, now plunging into auctions for thousands of dollars in digital art.

Or like the story of Roham Gharegozlou. In 2017, his company, Dapper Labs, created CryptoKitties, a website that allows people to buy and breed limited edition digital cats with cryptocurrency. These virtual cats became a phenomenon.

But Ethereum, the platform on which CryptoKitties was built, could not meet the demand and was too expensive to operate. By 2018, people were losing interest as cryptocurrency prices plummeted. Therefore, the company diverged. They formed a joint venture with the N.B.A to form Top Shot, which sells collectible highlight clips. The joint venture achieved $43.8 million in revenue in January 2021 alone. Dapper Labs enjoys 5% of the value of each transaction.

Andreessen Horowitz assisted Dapper Labs, as well as the Foundation, in the sale of Nyan Cat. Since starting operations on February 3, the Foundation has generated more than a million USD in revenue. According to founder Kayvon Tehranian, "emotional overflow".

One of the Foundation's first salesmen was Dom Hofmann. He posted a video he made in 2012 with very simple content, describing a hot summer night in New York. But since it was one of the first videos posted to Vine, the now-defunct social media app that Hofmann co-founded, it has historical value. After 10 auctions, the video was paid 8.77 Ethereum coins, equivalent to 17,198.15 USD.

Like all Internet phenomena, the excitement surrounding NFT can easily fade away. Cryptocurrency prices could plummet once again, or people could lose interest as the pandemic fades.

The Cock Foster brothers tried to warn people that it is difficult to make money from digital art. Those who want to sell quickly tend to lose money on the Nifty Gateway. Duncan, who spent $80,000 on the works, decided to display the works on three screens in his apartment. The works appreciated in value, but he didn't sell much.