Big bucks and the wild new world of NFTs
An acronym for “non-fungible token,” NFTs are unique digital properties and people are paying a lot for them
Fads come and go. But it’s hard to imagine any trend or craze enjoying a bigger moment than the one currently surrounding NFTs. An acronym for “non-fungible token,” NFTs are unique digital properties, many of which are bought and sold through the open-source blockchain, Ethereum.
The second largest cryptocurrency market next to Bitcoin, Ethereum is enjoying a massive surge in mainstream popularity as of late, largely thanks to the wide-variety of artists and entities jumping on the NFT bandwagon.
An NFT can be almost anything in digital format, from a song or a meme to a video clip or virtual trading card. Recently, Twitter CEO Jack Dorsey even sold his first-ever tweet (2006’s “just setting up my twttr”) for a whopping $2.9 million.
At least for now, however, it’s artwork that is amassing the most astronomical figures.
Mike Winkelmann, the digital artist known as Beeple, made history earlier this month when he sold his NFT titled “Everydays: the First 5000 Days” for more than $69 million.
The long-curated digital collage became the third-most expensive artwork by a living artist, and earned the distinction of becoming the first exclusively non-fungible token to be sold by British auction house Christie’s.
And just last month, Beeple’s politically charged Crossroads image was re-sold for $6.6 million, 100 times its initial cost (six months ago) of $66,666.66.
While plenty of other NFTs have sold for excessive price tags, it’s only recently that the emerging marketplace has crossed into the mainstream.
In October, the National Basketball Association opened its own NFT collection called NBA Top Shot. So far, it’s garnered $400 million in revenue.
Unlike traditional trading cards, the NBA’s Top Shot collectibles are called moments, as each is a short video of a dunk, shot, assist, or memorable play. And unlike other “one-of-a-kind” NFTs, these moments are mass-produced, with lower serial numbers holding the most value.
To date, the top four Top Shot moments sold, all of them featuring perennial all-star LeBron James, have commanded a total of $612,000. With that kind of tangible success, it is speculated that other major sports leagues, including the NFL, NHL, and MLB, will soon be joining in the NFT craze as well.
Naysayers are quick to point out that most NFTs — even the ones with colossal price tags — can be easily duplicated.
They’re not wrong.
A simple Google search and right click makes almost any NFT readily accessible for “ownership” by anyone with a computer. On top of that, many NFTs contain smart contracts that give the original artist a cut if it is resold.
However, most NFTs are “tokenized,” meaning that a digital certificate of ownership is created, and a record of that ownership is stored on the blockchain — a ledger preserved by thousands of computers.
Although many question whether having an authenticated original of something that can easily be reproduced is worth the (most times) exorbitant fee, the answer so far has been an overwhelming yes.
A diverse assortment of artists and musicians has raced to join the NFT wave in recent months.
Popular DJ Steve Aoki, through a partnership with German illustrator Antoni Tudisco, sold the digital animation “Hairy” for nearly $900 thousand. Claire Boucher, the singer/songwriter known as Grimes, recently sold an assortment of digital art as NFTs to the tune of $6 million and donated a percentage of the sales to environmental causes.
Family rock act Kings of Leon just touted their latest album, “When You See Yourself,” as the first-ever to be released as an NFT – a claim disputed by Belave frontman Devon Welsh who says the honor is his – while pop singer Shawn Mendes was part of an NFT drop that included a rotating 3D model of his Fender guitar.
And they’re far from the only ones. French DJ Madeon, rapper Tory Lanez, Latin superstar Ozuna, and genre chameleon Diplo have all gotten into the NFT game.
Actor and singer William Shatner has sold trading cards that included an X-ray of his teeth as NFTs and Chris Torres sold his popular GIF of a flying cat with a Pop-Tart-torso and sparkly rainbow trail for over a half-million dollars.
Even Time magazine has followed suit, auctioning three of their “most iconic” covers (including one produced exclusively for the auction) as NFTs.
It’s certain that more and more NFTs will soon hit the marketplace, as other crypto companies look to match the success that Ethereum is currently experiencing.
Only time will tell, but even those who have benefitted the most from the trend are unsure about how long the recent boom can last.
Mike “Beeple” Winkelmann was recently quoted by the BBC as saying, “I actually do think there will be a bubble, to be quite honest. And I think we could be in that bubble right now.”
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