Here’s a question for you: What do Eminem, Pete Davidson and SNL have in common?
But of course, NFTs.
Confusing, I know. But as many clicks as the cover of “without me” had on YouTube, no amount of them can compensate me for the time I spent trying to understand and explain what these newfound tokens are in their essence.
So, What are NFTs?
The acronym NFT stands for Non-Fungible Token. In a nutshell, NFTs convert digital works of art and other valuables into one-of-a-kind, verifiable assets that can be traded on the blockchain, the digital database underpinning cryptocurrencies like bitcoin and Ethereum.
The first-ever NFT was created in 2014. While we were all preoccupied with Four (hi directioners), AM & 1989 (not Taylor’s Version), Kevin McCoy, a digital artist, was preoccupied with another form of media. On May 3rd he minted the first-known NFT “Quantum,” a pixelated octagon filled with different shapes that pulse in a quite hypnotic way. A few years later, on November 23rd 2021, the art piece known as Quantum was sold at a Sotheby's auction for the generous price of over $1.4 million.
if we had to pick a point when NFTs started gaining mainstream traction it would probably have to be this one. The nature of NFTs varies and some of these art pieces sold in the form of NFTs are very well known as well as pretty humorous.
For example, Andrés Reisinger, an Argentinian designer, produces NFT furniture that may be used in open worlds like Decentraland or Minecraft. The most costly item by Reisinger was sold for just under $70,000. Top Shop, an NFT marketplace with the slogan “Own the NBA's Best Plays” trades videos of monumental NBA moments with their highest-earning asset being the video of LeBron dunking against the Houston Rockets, sold for $387,000. And it doesn’t stop there: Nyan Cat, Taco Bell GIFs and the first Tweet to ever exist since Twitter’s launch day are all NFTs that have been auctioned and sold for numbers with many zeroes.
So, why is this weird art-trading system taking off right now? Well, the suspicions fall on the public’s interest in supporting independent artists for their work by purchasing them. Others assume that the intrigue is caused by the idea of taking a digital asset that virtually anyone can copy and legally owning it. Most commonly driven by crypto-millionaires, they are also a newfound way to diversify their bitcoin holdings and obtain interests in the cryptocurrency ecosystem as it slowly becomes the future of transaction.
As they are non-fungible, the very nature of NFTs forbids them from being mutually interchangeable, meaning no two of them can be the same, but that is what makes them special; You even get a certificate for them. (Yay)
In practice, anyone with a digital wallet, access to an NFT marketplace and enough purchase of bitcoin (sorry James Howells) can make, sell and buy an NFT. As this trend diversifies from the traditional use of Bitcoins and Ethereum, ascending into a futuristic form of art collecting, nobody knows where this could lead the music, film or any other artistic industry still in play but only one thing is for sure: it’s going to be really interesting, or a digital Great Depression.
Either way, a great Tweet.
(for a less polite description of the topic click here)