In the last few weeks the letters NFT have been thrown around a lot, but if you're not hyper switched on to all things tech and internet you (like me) might not have been aware of what on earth this means and why it is generating so much press.
Allow me to (attempt to) explain...
NFT stands for 'Non-Fungible Token'. Fungible essentially means unique and inimitable. Token is of course something that serves as a visual or tangible representation of a specific asset.
Zachary Crocket at The Hustle kindly created this chart that highlights the difference between fungible vs non-fungible physical and digital assets:
NFTs can be a lot of things but what is booming at the moment is generally a form of digital art (depending on the specific NFT and your definition of the word art)
For simplicity they are being spoken about as a sort of 'one-of-a-kind trading card', and to be fair the NBA are trading almost exactly this. The below video of LeBron James slam-dunking sold for a whopping $208,000 USD recently.
But NFTs can be a moving image/GIF, a video like LeBron, a song or audio clip or even a tweet (à la the first ever tweet that Twitter creator Jack Dorsey just sold to charity for USD $2.9M).
While for a lot of these clips/GIF/images etc you can view the exact same thing online, without spending millions, the unique (non-fungible) element is in the blockchain-enabled digital signature attached to the NFT. While you could liken it to owning an original Frida Kahlo painting instead of owning a print of that painting, the difference is that the item really is experienced in the exact same way, whether you pay for it and own the actual NFT or not, except for that unique cryptographic hash (are you learning as many new words as me?). And no, owning the NFT does NOT mean that you own copyright to that image/song/clip.
Some artists are accompanying the purchase of NFTs with an accompanying physical item as well but this isn't the norm necessarily, so essentially you are simply purchasing the bragging rights to owning the digital product that might be so easily viewed/downloaded in the exact same quality by anyone online. As discussed by Rolling Stone the tangible vs non tangible value of art via NFT's is getting pretty strange "a tech company filmed the burning of a rare $95,000 Banksy print — and then sold the video of the art’s destruction through an NFT for four times the artwork’s original value."
Unfortunately many artists around the world are claiming that their work is being stolen, made (or 'minted') into NFTs and sold on without their permission. Articles like this one from VICE explain that people, and companies (in particular one called 'Tokenised Tweets') are mining for artworks online and selling on as NFTs. Artist RJ Palmer explained the new threat NFTs present to creatives “Of course my stuff gets stolen all the time by T-shirt sites, etc., and in those cases it’s not difficult to file a DMCA takedown,” Palmer said. But with the unregulated NFT markets that often feature anonymous buyers, things are more complicated. “It’s very concerning from a rights standpoint.”
They are not brand new but they are having a big moment (which may or may not become more than that)
While these have technically existed for a few years (around 2017) they have only massively taken off in the last little while. In February 2021 alone the ten most popular NFT collectibles saw an average 400% month on month rise (almost $400m in sales volume).
So why are they taking off now? Via some expert advice, The Hustle explains:
1. COVID-19 has made us more plugged into virtual spaces: More people working from home = more time interacting in virtual spaces = more openness to the value of virtual goods and services.
2. A boom in cryptocurrency (and a larger acceptance of the ethos of decentralization) has generated interest in other digital assets.
3. Major institutions (like Christie’s auction house) have lent NFTs credibility and prestige by jumping aboard.
4. Non-fungible goods often thrive during times of economic turmoil: Rare coins, for instance, saw price spikes during the Great Depression, the stock market collapse of 1987, and the 2008 recession.
Get it a bit now? Without REALLY getting it AT ALL?
Same.
Let me leave you with the currently highest selling NFT to date - Beeple's Everydays - The First 5,000 Days
This sold for an astounding $69.3m USD at Auction in March of this year.
Image Source: www.artnet.com
Yep.
Zara Cooper
