News & Views

Nordic Highlights Q1 | 2022 - Non-Fungible Tokens (NFTs) — Memes for the Mega-Rich or a Real Business Opportunity?

6 April 2022

We have published our Nordic Highlights Q1/2022 issueThe topic in this issue is non-fungible tokens.

Non-Fungible Tokens (NFTs) — Memes for the Mega-Rich or a Real Business Opportunity?

Over the past year, you may have come across reports of non-fungible tokens, or NFTs, being sold for astronomical sums of money. For instance, in March 2021, it was reported that the American artist Mike Winkelmann, also known as Beeple, sold an NFT for a collage of 5,000 digital images for over USD 69 million. The same month, it was also reported that Twitter co-founder and then-CEO, Jack Dorsey, sold an NFT for his first tweet for USD 2.9 million. NFTs have also been used to facilitate the sale of copies of famous memes, such as the ‘Nyan Cat’ meme, which sold for close to USD 600,000 in February 2021, the ‘Disaster Girl’ meme, which sold for close to USD 500,000 in April 2021, and the ‘Doge’ meme, which sold for USD 4 million in June 2021.

To date, the most valuable NFT transaction recorded involved a digital work of art called ‘Merge’, created by an artist known only as Pak. It has been reported that in December 2021, almost 29,000 buyers spent a total of USD 91.8 million to buy over 300,000 units of the artwork. However, this is only a small fraction of the total value of the NFT market. It has been estimated that in 2021, the value of NFT transactions using Ethereum, the most popular technology for NFT transactions, exceeded USD 40 billion — and the total NFT market size is larger still.

But what are NFTs and why are they fetching such high prices on the market? Are they just a passing craze for individuals with too much money on their hands, or do they carry real business potential for companies in a wide range of industries? Read on to find out the answer to these questions and more.