Ian Kibria
While most of us have heard of crypto currency by now, you may be puzzled by the “NFT” craze. The unique digital tokens have recently gained attention for their use in the sale of digital art, but what are they?
NFT stands for non-fungible-token. A “fungible” item is one that can be replaced by an identical item. In economics, a fungible commodity is any commodity mutually interchangeable with another. Take for example crypto currency such as bitcoin- one bitcoin can be exchanged for another. Therein lies the difference between crypto and NFT: no two NFTs are the same.
Why are they used?
NFTs are used to give value to digital information. An NFT can be used as a certificate of ownership of anything digital, from music to virtual trading cards. So it’s a little less like a token, and a bit more like a seal.
This has understandably made a buzz in the art world. Physical paintings are valuable because they are “one-of-a-kind”. They can be copied, but the original will always be worth more. In the age of digital art, there is now a large range of work available that can rapidly be copied to a “T”. By tokenizing their work with NFTs, digital artists can make a pretty penny off of pieces that might otherwise go endlessly copied at no profit to them. Sure, the majority of digital artwork can still be screenshotted and downloaded for free even if it is associated with an NFT, but individuals will still pay up for an NFT’s authenticity. Plus, NFTs can be designed to pay the original NFT seller a percentage each time the NFT changes ownership. Owning an NFT is akin to owning an autographed print or special collectible— the existence of the token authenticates your ownership of the “original” production of a digital artwork that may have been reproduced across the internet.
Christie’s just sold an NFT for a digital art work by artist Mike Winkelmann- better known as Beeple, for $69 million. It’s not only visual artists who have made money selling NFTs. Linkin Park’s Mike Shinoda, Steve Aoki, Kings of Leon, and Puerto Rican popstar Ozuna have all profited from NFTs.
Artists like Beeple may be making money from NFTs, but if you ask me, why buy something that’s not really there? Beeple himself said this whole thing is probably a bubble. Maybe NFTs would be useful in exchange for real world commodities like tickets for events or flights, leasing a car, and so on, but I will never understand buying the Nyan Cat gif for $600,000 when you could easily download it for free. It’s not as if owning an NFT gives you rights over a work- people can and will still copy it at no expense. But people will always find a new way to waste their money, so power to all the artists capitalizing on the era of NFT!
We might also consider that even if NFT isn’t all the rage in a couple of years, the absurd numbers it has fetched at this moment in time and the novelty of its existence will be considered a colorful enough quirk of history that the first few NFTs appreciate to tremendous heights in a few decades.
However, I oppose the delusional claim by NFT enthusiasts that NFT is a revolutionary creation for unknown artists. In reality, the most popular and influential figures will reap the greatest benefits from the NFT craze due to the sheer mania of their fanbases. We can see this in the results of Logan Paul’s NFT scheme. No-name creators will probably gain little attention if they want to sell an NFT. No one wants a collectable token for someone they aren’t a fan of. Beeple, whose work had previously sold for $100 at most, should be considered an exception to the rule.