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.
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.
The realization then is that essentially anything can have a non-fungible token. In a future of self-driving cars, 3D printing, and humanoid robots you might just find your children buying their first homes, cars, and college educations with a unique NFT, stored on the blockchain, for all to see.
Why Buy Something You Can Never Physically Hold?
A reasonable reaction to this modern phenomenon is utter confusion. Because why can’t you snap a photo, make a GIF, or play a chess game and have someone give you thousands?
And this is for the same reason that you can’t buy a ticket to the Louvre, snap a photo of the Mona Lisa, and pawn it off for the same price as the actual painting. The Mona Lisa is unique, one of a kind. So regardless of who sees it, has pictures of it, or frames copies of it on their wall no one else owns the non-fungible Mona Lisa except the certified proprietor.
NFT’s have created a seamless, unified record system for art ownership. They have allowed the sale of virtual art, such as GIFs, which can’t be made to animate on a physical canvas. Further, they have enlarged the customer base of creators. Now, creators can sell to the whole world and fund their endeavors.
The Fate of NFTs: A Passing Fluke or the Future of Art?
You walk down a bustling street in New York and see a piece of art sold by a street-side vendor. It might be a spray-painted piece of mingling galaxies, a funny comic of a politician, or a natural landscape. All you know is that you have to have it, so you buy it.
And you bought it because something about it moved you. Artists are able to communicate a unique experience, a feeling which you experience through their work. Banksy inspires anger against injustice; Picasso deconstructs reality to change our viewpoints; and da Vinci captures the essence of the physical world in eerily realistic drawings. Therefore, I can’t discard NFT’s as unimportant when they are able to communicate experiences just the same.
The digitization of this aspect of our culture is jarring and some are certain that this trend is a bubble ready to explode. I couldn’t disagree more. I still don’t think the idea of NFTs makes complete sense; but in a lot of ways, we don’t make a lot of sense either. Maybe the whole idea is that the money paid for an NFT is, at its core, a public expression of appreciation for the creativity, ingenuity, and story of someone else. Which is something the world definitely could use more of.