You’ve just paid $69 MILLION for a piece of art. Is it a mind-bending Picasso? A super-realistic sketch from da Vinci? Or maybe a powerful statement from Banksy? 

And what if I told you that when you walked out of Christie’s auction house, you walked out empty-handed. In fact, you never even went, it was a virtual auction. 

What you bought was a non-fungible token (NFT) declaring your sole ownership of the digital image The First 5000 Days by Beeple. An image that I can search online, download to my computer, put on a flash drive, drive to a local printing store, print it on a large poster, frame the poster, and hang on my wall for under $100. 

So what is a non-fungible token? Why did someone buy this? And how is this the next frontier of art history? 

Non-fungible Tokens: Pointless Bragging Rights or a Collector’s Dream?

Let’s break the idea of a non-fungible token down. A non-fungible item has a uniqueness that doesn’t allow it to be exchanged with other items of the same type. A car is non-fungible. If I loan you my car, you can’t return a different car of the same type, because my car is unique. On the other hand, gasoline is fungible, gasoline is gasoline and it doesn’t matter what gas station you get it from. 

Then, the token part of an NFT is the certification of ownership you receive on the blockchain which is basically an official unified list of who owns what NFTs. This list is maintained and verified by thousands of computers around the world. 

Nyan cat
The Nyan cat

A notable recent sale was the NFT for the Nyan Cat GIF by Chris Torres, sold for $580,000 right before its 10th birthday. Another mesmerizing GIF called Metarift was sold by Pak for just over $900,000 this year. The chess world champion, Magnus Carlsen, has even joined the movement, selling his chess games wherein he uses the worst openings against other grandmasters in online games for up to $7,000

And these are no isolated incidents on newly created websites. The prestigious Sotheby’s auction house garnered over $16 million dollars from NFT auctions of different geometrical virtual pieces in just two days between April 12 and 14.