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A 22-year-old college student becomes a millionaire overnight, do you know how? He did this just by selling his selfies. Are you wondering how someone can sell his selfies and make millions out of them? NFTs are the answer.

This young college-goer captured his selfies, random ones, for the last five years, covering his entire college days’ journey. Sultan Gustaf Al Ghozali then turned these selfies into an NFT and the same got sold for a whopping amount of more than US$ 1 million *. 

What are NFTs?

Non-Fungible Tokens (NFTs) are digital assets that usually represent artworks created by different people. Non-fungible means things that are not interchangeable so these artworks are not interchangeable and thus the price of these NFTs goes up so high. These are unique creations that are digitally transformed to store data on a digital ledger using blockchain technology. 

Any content/ artwork/ creative objects can be transformed into NFTs and sold on digital platforms. For instance, the selfies of Ghozali mentioned above were sold on OpenSea, which is one of the biggest marketplaces for NFTs at present. 

How do they work?

NFTs work like a physical auction but on the digital platform. These non-fungible tokens mainly work on the Ethereum blockchain platform, then there are others as well like Bitcoin Cash and FLOW which also support the creation of NFTs.

The original file can be in any format such as JPG, GIF, MP3, and others. You have to use the digital marketplace for creating the NFT out of the original file and then you can sell it in the open market. The sale process will be like an auction where the final price will be decided by the people who want to buy the NFT. Similar to a physical auction, there will be a bidding process on the digital marketplace and whoever wins the bid gets the NFT. 

Why are NFTs so popular?

Non-fungible tokens are becoming so hyped these days because more people acknowledge the work of creative people and artists. With NFTs artists who cannot present their art forms in any physical auction, can sell them on the digital marketplace.

From the buyers’ point of view, these NFTs are being highly demanded because buying an artwork or collection of creative objects or memoirs in the form of NFT will make it their own. The ownership can always be proven as these are unique and non-interchangeable objects. 

The uniqueness of NFTs and their relationship with price

• Amitabh Bachhan sold his ‘Madhusala’ NFT last year for $756000 *,

• Yuvraj Singh launched his NFT which is a collection of the best moments of his entire cricket career *.

The price for these NFTs is so high because of their uniqueness. There cannot be any other ‘Madhusala’ collection by anyone else and no one else can share the best of most of Yuvi’s career. 

Similarly, if you see this young computer science student, Ghozali, from Indonesia, his selfies which he took for all five years cannot be copied by anyone else. This increases the demand for NFTs and makes them popular amongst people across the globe. 

NFTs and Taxation:

As per a recent announcement in the Union Budget 2022, one has to pay 30% tax on the profits he/she makes from selling his/her digital assets and NFTs come under the same. 1% TDS will be deducted from the proceeds directly when you sell and receive the money for your NFTs or for that matter any digital or virtual assets *.