People are paying millions for clips that can be viewed for free. Welcome to the world of ‘NFTs’

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  • Digital collectibles known as “NFTs” have exploded in popularity lately.
  • A video clip created by digital artist Beeple was flipped for a record $6.6 million last week.
  • So what are NFTs? CNBC runs through what you need to know.

From art to sports trading cards, people are spending millions of dollars on digital collector’s items.

These crypto collectibles, known as NFTs, have exploded in popularity lately. A video clip created by digital artist Beeple, whose real name is Mike Winkelmann, was flipped for a record $6.6 million last week. It had originally been bought for around $67,000.

Meanwhile, one of thousands of computer-generated avatars called CryptoPunks recently sold for $2 million. And a crypto art rendition of the Nyan Cat meme from 2011 sold for about $590,000 in an online auction.

Proponents of NFTs say they fix a big problem with the internet: artists not getting paid for the distribution of their content online. At the same time, critics see the NFT craze as another potential speculative frenzy in crypto that’s sure to fizzle out eventually.

So what exactly are NFTs? And why are they suddenly being sold for millions? CNBC runs through everything you need to know.

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NFTs, or non-fungible tokens, are a new type of digital asset. Ownership of these assets are recorded on a blockchain — a digital ledger similar to the networks that underpin bitcoin and other cryptocurrencies.

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NFT-artwork creator Beeple explains why digital art could be crypto’s next frontier
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