Nothing beats an explosion of blockchain news to leave you wondering, “Um… what’s going on here?”
That’s how I felt when I heard about Grimes being paid millions of dollars for NFTs or Nyan Cat being sold as one.
And just when we thought we had a handle on what was going on, Twitter’s founder put an autographed tweet up for sale as an NFT.
You may be curious, what exactly is an NFT?
I think I’ve figured it out after literally hours of reading. I’m still expecting to weep.
Let’s start with the fundamentals:
What exactly is an NFT and what does NFT stand for?
Token that is not fungible.
That doesn’t make it any better, does it?
Sorry about that. “Non-fungible” means that it is one-of-a-kind and cannot be replaced with something else.
A bitcoin, for example, is fungible — trade one for another and you’ll get exactly the same thing. A one-of-a-kind trading card, on the other hand, is not fungible.
You’d get something entirely different if you traded it for a different card. You traded a Squirtle for a 1909 T206 Honus Wagner, dubbed the “Mona Lisa of baseball cards” by StadiumTalk.
How do NFTs function?
Most NFTs are, at a high level, part of the Ethereum blockchain. Ethereum, like bitcoin or dogecoin, is a cryptocurrency, but its blockchain also supports these NFTs, which store additional information that allows them to function differently than, say, an ETH coin. Other blockchains, it should be noted, will enact their own versions of NFTs. (Some have already done so.)
What do you buy at the NFT supermarket?
NFTs may be anything digital (such as sketches, music, or your brain being downloaded and transformed into an AI), but the current buzz is focused on using the technology to sell digital art.
Do you mean folks paying for my good tweets?
I don’t think anyone will stop you, but that’s not what I meant. Much of the discussion revolves around NFTs as an evolution of fine art collecting, but with digital art.
(As a side note, we were trying to think of something so ridiculous that it wouldn’t be a real thing when we came up with the line “buying my good tweets.”) So, of course, the founder of Twitter would take a crack at it just a few days after we published the article.)
Do people really believe this will become as popular as art collecting?
I’m sure some people really hope so, like the person who paid almost $390,000 for Grimes’ 50-second video or the person who paid $6.6 million for Beeple’s video. Actually, one of Beeple’s works was auctioned off at Christie’s, the famous auction house.
Sorry for the delay; I was busy right-clicking on that Beeple video and downloading the same file for which the person paid millions of dollars.
What a jerk. But, yes, that’s where things get a little uncomfortable. You can make as many copies of a digital file as you can, including the art that comes with an NFT.
However, NFTs are intended to provide you with something unique: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). In terms of physical art collection, anybody may buy a Monet print. However, the original can only be owned by one person.
No offense to Beeple, but the video isn’t a Monet.
What are your thoughts on the $3,600 Gucci Ghost? You still did not allow me to finish sooner. That photograph that Beeple was auctioning off at Christie’s ended up selling for $69 million, which is $15 million more than the price of Monet’s painting Nymphéas in 2014.
This was previously sold for $3,600, but the new owner is seeking $16,300. Trevor Andrew created this GIF.
Whoever acquired that Monet will appreciate it as a physical object. A copy of digital art is literally as good as the original.
The flex of owning an original Beeple, on the other hand…
So, what’s the point?
That depends entirely on whether you are an artist or a buyer.
I’m a painter.
First and foremost, I want to express my admiration for you. Congratulations. You may be interested in NFTs because they allow you to sell work that would otherwise be difficult to sell. What will you do if you come up with a really cool digital sticker idea? Is it possible to sell it on the iMessage App Store? No way, no how.
Also, NFTs have a feature that you can allow that will pay you a percentage every time the NFT is sold or transferred, ensuring that if your job becomes extremely famous and skyrockets in value, you will reap some of the benefits.
I’m a purchaser.
One of the most apparent advantages of purchasing art is that it allows you to financially support artists you admire, and this is also true for NFTs (which are way trendier than, like, Telegram stickers). Purchasing an NFT normally includes certain fundamental usage rights, such as the ability to post the image online or set it as your profile photo. Of course, there are bragging rights to owning the painting, with a blockchain entry to prove it.
No, I wanted to say I’m a collector.
Yes, yes, yes, yes, yes, yes, yes, yes, yeah, yes NFTs should function similarly to any other speculative asset in that you buy it and hope that the value of it rises one day so that you can sell it for a profit. But I feel a little dirty for bringing it up.
So each NFT is distinct?
In the dull, technological sense, each NFT is a distinct token on the blockchain. But, unlike van Gogh, where there is only one definitive real version, it could also be like a trading card, with 50 or hundreds of numbered copies of the same artwork.
Who would pay hundreds of thousands of dollars for something that is essentially a trading card?
That is, after all, one of the reasons why NFTs are so complicated. Some regard them as the future of fine art collecting (read: as a playground for the mega-rich), while others regard them as Pokémon cards (accessible to the general public but also a playground for the mega-rich). In the spirit of Pokémon cards, Logan Paul recently sold some NFTs pertaining to a million-dollar box of the—
Please halt. I don’t like where this is going.
Yes, he sold NFT video clips for up to $20,000, which are simply clips from a video that you can watch on YouTube whenever you want. In addition, he sold NFTs of a Logan Paul Pokémon card.
Who paid $20,000 for a Logan Paul video clip?!
I suppose a fool and their money are soon parted?
It’d be amusing if Logan Paul decided to sell 50 more NFTs of the same footage.
Linkin Park’s Mike Shinoda (who also sold some NFTs with a song) actually mentioned it. It’s something someone might do if they were, as he puts it, “an opportunist crooked jerk.” I’m not saying Logan Paul is that, but you should be cautious about who you buy from.
Is it possible to purchase this article as an NFT?
No, but theoretically, any digital device could be marketed as an NFT. Deadmau5 has made digital animated stickers available for purchase. Shatner-themed trading cards have been sold by William Shatner (one of which was apparently an X-ray of his teeth).
Some efforts have been made to connect NFTs to real-world objects, usually as a sort of verification method. Nike has patented a technique for verifying the authenticity of sneakers using an NFT system, dubbed CryptoKicks. But, so far, I haven’t discovered any teeth. I’m afraid to look.
Where should I look?
Several marketplaces have sprung up around NFTs, allowing people to buy and sell. These include OpenSea, Rarible, and Grimes’ favorite, Nifty Gateway, among many others.
There were kittens involved, according to what I’ve heard. Please tell me about the kittens.
NFTs became technically feasible when Ethereum added support for them as part of a new standard. One of the first applications was, of course, a game called CryptoKitties, which allowed users to trade and sell virtual kittens. Thank you very much, internet.
Not nearly as much as the guy who paid more than $170,000 for one.
The same. However, the kittens demonstrate that one of the most intriguing elements of NFTs (for those of us who aren’t trying to build a digital dragon’s lair of art) is how they can be used in games. NFTs are currently available as objects in some games. NFTs can even be used to sell virtual plots of land. As an NFT, players should be able to purchase a special in-game rifle, helmet, or whatever they like, which would be a flex that most people would appreciate.
Is it possible for me to pull off a museum heist in order to steal NFTs?
That is dependent on the situation. Part of the allure of blockchain is that it keeps a record of every transaction, making it more difficult to steal and flip than, say, a painting hanging in a museum. However, bitcoins have been stolen in the past, so it just depends on how the NFT is stored and how much effort a prospective victim is willing to put in to get their things back.
Please don’t steal anything.
Should I be concerned about the survival of digital art in 500 years?
Most likely. Bit rot is a real thing: image quality deteriorates, file formats can no longer be opened, blogs go down, and people forget their wallet passwords. Physical art in museums, on the other hand, is unexpectedly delicate.
I want to make the most of my blockchain experience. Can I purchase NFTs using cryptocurrencies?
True. Most likely. Many marketplaces embrace Ethereum. However, legally, anybody can sell an NFT and ask for whatever currency they want.
Will my Logan Paul NFT trade add to global warming and the melting of Greenland?
It’s nice to keep an eye out for. NFTs use a lot of power when they use the same blockchain system as other energy-intensive coins. People are working to address this problem, so most NFTs are also linked to cryptocurrencies that produce a lot of greenhouse gas emissions. After learning about the potential impact of NFTs on climate change, a few artists have opted not to sell them or have cancelled future drops. Thankfully, one of my co-workers has done a thorough investigation, so you can read this piece to get a more complete photo.