A non-fungible token also known as an NFT by Edward Snowden recently sold for over US$5 million. Well, it actually was sold for 2 224.00 ETH i.e 2 224 Ethereum which means which currently have a value of about US$4.9 million as I write this. That’s cryptocurrency for you, always so volatile.
NFT’s are the future
The question on most people’s minds would be what’s an NFT and why the heck are they so valuable? NFTs are the future of art in the digital world. An NFT is when blockchain meets digital art and provides a solution to a problem that has plagued art in the new world we live in where replication is trivial.
Let me explain in simple terms. When Leonardo Da Vinci painted the Mona Lisa, it was the only piece available that looked like that. Fast forward to today, anyone can have a digital copy of the Monalisa, it’s a thing so trivial to do I have included a copy of the Monalisa above to prove my point. Of course, there can only be one Monalisa which is hanging somewhere in the Louvre in France. However, for a couple of bucks, you can have a machine create a copy of the Monalisa that would be so similar to the original it would take an expert to be able to distinguish it from the original.
The same problem has plagued digital art for so long. Say you are a photographer and want to sell your high-quality photos at an auction the same way paintings are sold, how would you go about it? After all, it’s even easier to reproduce a digital photo than it is to reproduce a painting. What is to stop you from selling the photo over and over again even after a buyer has paid top dollar for it?
Enter, NFTs. These allow a digital piece of art to be uniquely tagged as the original. The one and only. Every other copy besides this would be considered a copy just as there is one Monalisa, there is one NFT. NFTs use blockchain i.e. a universal ledger/register which can be used to certify that a piece is the original and therefore unique. You can of course opt to get a copy just as you could pay someone to create a good copy of the Monalisa but that copy would just be that, a copy.
Now that you can uniquely tag a piece as the original it means if you are an artist or photographer you can now easily sell the original NFT copy for top-dollar, just as a traditional artist can sell their original titled painting. In fact, just like a real painting, you can give your NFT a title. Snowden’s NFT is titled “Stay Free”
Why are NFTs so valuable?
NFTs, just like all things that involve the blockchain often confuse people and sometimes experts. To this day a lot of people cannot fathom the mystery that is Bitcoin-they think it’s money plucked out of thin air and therefore ought not to have a value.
High value NFT pieces like Snowden’s “Stay Free” tend to send shockwaves through conventional media where people are left scratching their heads. The thing is, it’s not complicated once you think of NFTs the same way people view traditional art. Not all pieces are the same and factors that affect the value of a piece include things such as:
- The nature of the art piece and how it resonates with potential buyers and the public at large
- The name of the artist. Stay Free is by the notorious Edward Snowden. It’s like a brick wall painted by Banksy, it’s worth more than a brick wall or picture created by me
- Uniqueness-to fetch top dollar a piece has to be unique and NFTs give digital art uniqueness.
- Fame- for example, the Monalisa and Grumpy cat are known the world over.
- The demand for the item which is of course influenced by all of the above and more. Those who buy NFTs do it as an investment. A widely demanded piece will allow them to eventually recoup their investment should they choose to do so in future.
Is this a fad?
It’s always hard to tell with these things. I used to scoff at Bitcoin too but look at its value today and it doesn’t seem like it’s the bubble that experts thought it was. This seems to be a thriving industry and more and more people are venturing into it. Take a look at the Foundational App which is sort of like a mini-Sotherby’s auction for digital art and see how big spenders seem to be splashing, undeterred.
If you are still struggling to wrap your head around NFTs think of them as autographs. They are here to stay.