Lately, there's been a lot of talk about NFTs, the latest digital craze. But is this new technology here to stay, or will it be just another innovation that fades away after a while?
To answer that question, let's first understand that non-fungible tokens, or NFTs, aren't something relatively new. The token technology has been around for a while and gained more popularity with the rise of cryptocurrencies. They somewhat behave like cryptocurrencies. CryptoKitties, a digital trading game on the Ethereum cryptocurrency platform, was one of the original NFTs, allowing people to buy and sell unique virtual cats stored on the blockchain.
However, after high-profile deals hit the headlines, like the sale of the first NFT artwork – a digital collage by artist Mike Winkelmann (Beeple) for a staggering $69.3 million – NFTs suddenly captured the world's attention. The piece, titled "Everydays: The First 5000 Days," is a compilation of digital illustrations, cartoons, and sketches Winkelmann created on his computer, one per day, for over 13 years.
Celebrity endorsements also played a role in popularizing the concept, with influential personalities like Justin Bieber and Neymar generating a buzz among their followers. Neymar spent around $6 million on two drawings from the Bored Ape Yacht Club collection. The Canadian singer also liked the artwork and acquired an NFT from the same collection for approximately $6.9 million. His collection now includes 619 NFTs from 49 different collections.
What are these non-fungible tokens?
In simple terms, NFTs turn digital artworks and other collectibles into unique and verifiable assets that are easy to trade on the blockchain. While it might be complex for some, the reward has been significant for many artists, musicians, influencers, and others, with investors spending considerable amounts to own NFT versions of digital images.
For example, Jack Dorsey's first tweet was sold for $2.9 million, a video clip of a dunk by LeBron James went for over $200,000, and a Nyan Cat, a pixel art cartoon of a gray cat flying through space in a loop, was sold for $600,000.
Interesting, but I still don't get it
If you're unsure about what a non-fungible token actually is, let us explain. The token registered on the blockchain is an asset that can be property, artwork, or money, for example. Whoever owns the token of an artwork has rights to it or part of it.
Okay, but what does fungible mean?
"Fungible" refers to items or assets that are interchangeable and mutually interchangeable with other items of the same kind, quality, and quantity. In simpler terms, if something is fungible, it can be replaced or exchanged on a one-to-one basis with something identical without any loss of value or distinction. Money is a classic example of a fungible asset. For instance, a $20 bill can be exchanged for two $10 bills or four $5 bills, and the total value remains the same.
Non-fungible is the opposite, as there can't be an exchange of equivalence in kind, quality, and quantity. "Starry Night," Vincent van Gogh's painting, for example, is a non-fungible asset since it is unique, and thus, cannot be exchanged.
So, are they a new form of art?
Not really, non-fungible tokens aren't a new artistic medium like oil painting, engraving, photography, or video art. Even digital art predates NFTs.
NFTs are financial instruments designed to facilitate the sale of digital files. They essentially attest that a particular digital asset is unique, creating scarcity and adding value to the piece.
The diffusion and valorization of art Some say that NFTs are ready to transform the art world, changing not only how art is bought and sold but also what kind of art we value and which artists. Justin Sun, a prominent Sino-American tech entrepreneur who spent millions on NFTs, said in a conversation with art critic Sebastian Smee that they will "revolutionize the existing trading model in the art market, especially for digital art."
But NFTs won't just bring digital art to the forefront.
Sun also claims that NFTs will bring "transparency to the art world" since the data recorded on the blockchain is public and easily accessible. Another interesting point for artists is resale royalties, which can be received whenever a work is traded. In other words, NFTs can incorporate contracts – called smart contracts – that grant artists a percentage every time that asset is sold.
"NFTs have already transformed the art world, regardless of whether the boom continues" – Hans Ulrich Obrist, artistic director of the Serpentine Gallery.
Physical artworks can also be turned into NFT assets. Thanks to smart contracts, it's possible to create a secure digital package of data about that work, including a record of its ownership, instructions on its care and display, and stipulations on how much money should go to the artist when resold.
And where is all of this heading?
Well, there's still much to be seen about this somewhat emblematic relationship. Decentralization, whether financial or artistic, is a key factor in the negotiations of digital assets and cryptocurrencies, a characteristic that allows greater freedom for users. The hype is real, but entirely understandable. The NFT craze is making it clear that the "art world" encompasses an increasingly diverse set of disparate communities.
To understand how far NFTs can go, one must first consider that the art that appreciates is directly linked to your worldview. If you think of art as the ability to be impacted by objects in the physical world, then you'll naturally prioritize the experience, production, and promotion of physical objects.
The world is constantly changing, and concepts that once seemed immutable are being rewritten according to technological and social advancements.
Excited to explore the transformative world of NFTs and digital art? Dive into the future with us! Visit our NFT project and discover a realm where creativity meets technology. Join the movement, own a piece of the digital revolution, and let art redefine the way we see the world. Click here to explore our NFT collection now!
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