A-Z on those digital NFTs

NON-FUNGIBLE tokens, or NFTs, are one of the world’s biggest internet crazes.

While some experts believe they are the future of the art and fashion world, others think investors will lose heavily, echoing the fate of those who splashed out during the dot-com boom 20 years ago.

An NFT is a unique unit of computer data stored in a piece of code called a blockchain. It can be associated with a digital asset such as a video, picture, quote or even an outfit. The fact each one has a unique signature means it is finite and can be bought and sold like real-life artwork or collectibles.

A blockchain allows cryptocurrencies like Bitcoin to exist as it records on a digital ledger proof that a token changed hands.

While each cryptocurrency token has the same value – like a £1 coin – NFTs all have different values. What they are worth is dependent on how much people are willing to spend, much like paintings or antiques.

The first known NFT was a digital graphic called Quantum, designed in 2014 by artist

Kevin McCoy and his wife Jennifer. He sold the artwork to entrepreneur Anil Dash for just £2.95 but it is now thought to be worth more than £5million.

The niche technology became more mainstream last year following a string of high-profile sales. In March, artist Mike Winkelmann, known as Beeple, shook the art world by selling his work, Everydays: the First 5000 Days, for more than £50million.

Since then artists such as David Hockney and Jeff Koons, and singer Grimes, have sold NFTs for vast sums.