It seems that NFTs are becoming the hottest ticket in town. NFTs burst onto the scene when the auction house Christie’s recently sold a digital artwork by the artist Beeple, (real name Mike Winkelman), for very serious amount of money. The digital artwork, by the rather unknown (until now) Beeple sold for $69mln after 2 weeks of bidding. One could also buy a Picasso for that and possibly throw in a Pollock. So what’s the hype around NFTs?
More importantly, what are NFTs? With the emergence of Blockchain (see also our blog on Blockchain) and the unique and unalterable (read: non-hackable/unique/non-fungible) registration of data (like cryptos) enabled by Blockchain technology, Non-Fungible-Tokens have exploded. The token in this case, is a Blockchain registered datafile, proving you own a certain digital asset or ‘collectible’. Many digital things are suddenly considered ‘collectibles’ and an energetic army of young ‘art’ collectors are rushing to buy the digital rights to anything from NBA videos, memes, tweets, and music.
“Owning the NFT of anything is”, says Winkelman, “not much different from owning the Mona Lisa”. After all, the Mona Lisa is photographed by millions of visitors to the Louvre: her image is downloaded and copied, but the ownership is held by one single entity – that is, the Louvre. NFTs work very much the same way for digital assets. So, Jack Dorsey’s first ever tweet, selling for $2.5 mln as an NFT, will still be there for anyone to see, screenshot or copy, but its ownership is registered on Blockchain as an NFT and therefore indisputable and ‘set in stone’.
But why did Winkelman’s (aka Beeple’s) work command such a high price? He is certainly one lucky man. But like anything in life, it is not luck only, but a lot of hard work that got Beeple where he is today. He showed originality and vision very early on - isn’t this a characteristic of all artists, to be ahead of their time? The French impressionists’ works were not much liked at first and neither were Picasso’s nor Van Gogh’s. It clearly took time for people to come around, to appreciate and value imagery that did not reflect how they saw the world.
In 2007, Beeple made a pledge to post a digital work of art online every single day of the week and stuck to this promise. He named this collection of work “Everydays” and the project is now in its 14thyear. This is 14 years of production of daily artwork and hardly, one would say, an overnight success. Until October 2020, Beeple never sold any of his works for more than a $100. It is from the “Everydays” series that Beeple has now sold the first 5000 days of work as this one single NFT, via Christie’s, to a digital art buyer going under the name of Metakovan. This buyer, of unrevealed identity, proclaims Beeple’s “Everydays: First 5000 Days” is the most “important work of this generation”.
Large NFTs, like Beeple’s, can also be ‘tokenised’ and resold as smaller, more affordable tokens. Investors buying these claim the value of smaller tokens is equally skyrocketing and they think that, down the line, when the rest of the world wakes up to NFTs, they will be worth much, much more.
Smaller tokens are being ‘dropped’ much like any limited editions of real-world goods - think sneakers for example - and the trick is to ‘get’ them. Maybe we will soon be hiring one computer file (a bot) to find us another file, it being an NFT or part of an NFT. This is not completely unthinkable, as we are already used to buying a piece of Bitcoin instead of the whole thing, as only a few of us can afford this.
Blockchain technology has opened up a huge new world of possibilities. Only time will tell if this new hype is to be like the Tulip mania of old or the beginning of a totally new way of doing things. Time to get your skates, or shall I say, your NFTs on.
Further reading:
https://www.cnbc.com/2021/03/12/buyer-of-69-million-beeple-nft-is-a-crypto-investo-metakovan.html
https://www.ft.com/content/2f28eac6-547a-43f2-b7d3-593da9f46a3d
https://onlineonly.christies.com/s/beeple-first-5000-days/lots/2020
https://useum.org/exhibition/curated/Impressionism/Early-Criticism
Other articles that may be of interest
Explore others in this topic or return to the index.
