NFTs: Why people are paying $100,000 for a shoe they cannot wear

NFTs seem to be everywhere. Credit: PA

NFTs - or non-fungible tokens as they are less well-known - seem to be here to stay as the world of cryptocurrency grows.

In a nutshell, they allow consumers to purchase items that are only available in the metaverse, rather than the real world.

They have made headlines for negative reasons after John Terry's high profile NFTs plunged 90% in value and the man who bought the first-ever tweet for $2.9m could not sell it for more than $7,000.

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Now Nike and RTFKT have launched NFTs in the form of shoes that only exist on the internet.

Some have gone for more $100,000 despite people being unable to wear them, instead they will only own them in the digital world.

'CryptoKicks' allow users to purchase base trainers and then customised 'skins' from various designers to create unique metaverse footwear.

Although unavailable to keep your feet warm, with the right Snapchat filter the owner can see what they would look like if physically existed.

What are NFTs?

These are marketed as a type of digital collectable and a token that can be used to show ownership of a digital item, often paid for in cryptocurrency.

The idea is to recreate the market for physical works of art or rare memorabilia for the digital world and enable artists and others to make money from digital creations.

So far, the creators of popular GIFs have sold their work and Twitter founder Jack Dorsey sold ownership of the first tweet on the platform.

NFTs, supporters say, offer proof of ownership in the same way that a gallery or private individual gets from buying an original piece of art – and even though the image or digital item can still be easily copied online, they argue NFTs provide someone with the honour of knowing they own the original.

Many football clubs use NFTs.

Critics, however, argue NFTs are a scam by so-called “crypto grifters” and are being sold as a “get-rich-quick scheme”.

David Gerard, author of Attack Of The 50-foot Blockchain, said: “Without a specific contract saying otherwise, an NFT does not grant ownership of the artwork it points to in any meaningful sense.

“NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money, and pretend they’re not selling magic beans.”