A JPG sold for $69MN !
Imagine paying $69 Million for a JPEG file that you can essentially download off the internet, and all you get is the right to display it and say you own it but not the copyright.
Seems crazy? What about $500,000 for an internet meme or $2.9 Million for the first tweet?
Well, that’s the weird world of NFTs.
NFTs are Non-Fungible Tokens, i.e., they are unique; you can not replace an NFT with anything else. It’s like owning the Mona Lisa; even if I replicate it, the copy would not be the original Mona Lisa.
An NFT can be anything digital, be it a song, clipart of a rock, or NBA video clips collectively sold for $383 Million, or the most expensive NFT to date, a modern art collage of 5000 digital images called ‘Everydays: the First 5000 Days’ sold for $69.3. Million.
‘Everydays: the First 5000 Days’ was the first purely digital artwork sold in a major auction house and made its creator Beeple (Mike Winkelmann) the third most expensive living artist.
Traditionally, digital art is infinitely replaceable, as anyone with an internet connection can download and reupload it. In contrast, an NFT has a digital signature on the blockchain (basically a record of all deals happening in a cryptocurrency, say Ethereum), making it unique, rare, and valuable. Another great thing is every time an NFT is resold, the creator is paid a percentage.
Still, wondering why people are shelling out millions for an image? Think of the art market; a Picasso is valued not because of the paint used but because of a consensus in society that it is valuable. Despite having no inherent value, NFTs and art, in general, are worth millions because of the psychological excitement and hype. Being a novel idea, NFTs can usher in a technology that allows simplified transactions of all kinds without depending on a centralized institution like a bank. Instead, transactions are verified by a network of numerous computers and stored in an unalterable public record on the blockchain.
People are also trying to integrate NFTs as assets into online games and virtual environments, essentially a Metaverse, a digital world with digital assets. Though it does sound like something out of a Sci-Fi novel, Microsoft and Facebook are increasingly pursuing this idea. In a metaverse, users create art galleries, trade clothes, and real estate in NFTs. The Metaverse could be an immersive virtual world where you can have your own identity(or avatar), connect with other users, and attend an event together. It’s an embodied internet that you’re inside of rather than just observing.
But not all is great about NFTs. Most NFT transactions depend on the energy-draining Ethereum blockchain (remember the record of all deals thing). People are concerned about increased greenhouse gas emissions, and there is a lot of research about this and moderating the issue. Few economists also believe NFTs are just a bubble like the dot-com bubble about to burst anytime.
Are NFTs changing how we perceive virtual interactions and making Ready Player One a reality or just another forgettable fragment of history?
Only time can tell…
