Non-fungible tokens, or NFTs, are a piece of technology that have left a lot of people scratching their heads. NFTs are a cutting-edge way for an investor to prove ownership over their digital assets. Currently, buyers use them mostly for proof of ownership over digital art. The space is seen as one that could bring with it groundbreaking new utilities; as such, institutions are injecting their own money into it. Visa (NYSE:V) is one of the newest institutions to enter the NFT industry, thanks to its new purchase today. Of course, the Visa CryptoPunk news is exciting NFT bulls.
But, what exactly is the NFT that Visa bought? Why did the company buy it? And what do these institutions actually believe will come of the NFT industry?
Let’s dive into everything you need to know. For starters, Visa announced this morning its purchase of the NFT with the following tweet:
Over the last 60 years, Visa has built a collection of historic commerce artifacts – from early paper credit cards to the zip-zap machine. Today, as we enter a new era of NFT-commerce, Visa welcomes CryptoPunk #7610 to our collection. https://t.co/XoPFfwxUiu
— VisaNews (@VisaNews) August 23, 2021
Visa CryptoPunk News: What is a CryptoPunk? Why is Visa Buying in?
- Visa’s new purchase is a CryptoPunk NFT, titled CryptoPunk #7610. The company bought the NFT on Aug. 18, at a price of $150,000.
- The NFT is a 24×24 pixel illustration of a “CryptoPunk,” a feminine sprite bearing a mohawk and green eyeliner. CryptoPunks are the product of Larva Labs; they are a series of 10,000 unique collectible characters. As the name implies, Visa is purchasing the CryptoPunk numbered 7,610.
- On the surface level, it may appear that Visa spent $150,000 on a piece of pixel art, which anybody can save. However, the implications of an NFT purchase are much deeper. Visa, as the owner of the NFT, is now the official owner of the image, as dictated by data recorded to the Ethereum (CCC:ETH-USD) network.
- Anchorage Digital, a federally chartered digital banking institution, is facilitating the transaction on behalf of Visa.
- This purchase is Visa’s first entry into a burgeoning space. But, it likely won’t be the last time an institution turns bullish on NFTs. Many blockchain experts and NFT bulls think the technology will transform from an art-sales industry into one with a much deeper utility down the line.
- In fact, as Waves (CCC:WAVES-USD) founder Sasha Ivanov says, the NFT space presents an opportunity for banks and other institutions to offer insurance contracts, house deeds and other important documents in a digital capacity.
- This is because NFT owners have provable ownership over digital assets. The space may be starting with art, but thanks to forward thinkers like Ivanov and Anchorage founder Diogo Monica, the applications are endless.
- This purchase by Visa is the company’s way to commemorate a soon-to-be ubiquitous space. It is the newest piece for a collection of historic commerce artifacts, which include things like early credit cards. The company, like Monica and Ivanov, believes NFTs will become an important future facet of retail commerce.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.