An NFT, Non-Fungible Token, is a blockchain-based certificate of authenticity that can be assigned to virtual artworks to verify their origin and ownership. Huh? The simplest explanation is that they are digital collectables ~ the equivalent of baseball cards or commemorative, minted on a blockchain. NFTs made it possible for original digital artworks to be sold, collected, and traded for profit just like physical art. All that matters is that someone believes an NFT is worth buying – even if it is just an authorised copy of artwork you can already view for free online.
NFT’s are bought and sold on specialised platforms, like cryptocurrencies. OpenSea is one of the best-known NFT marketplaces. A sale doesn’t necessarily involve the transfer of the actual object. For example, famous paintings have been sold but the buyers do not receive the painting. The transaction is more the certificate of ownership of the NFT registered on the blockchain and must be kept safe in a digital wallet, which can take various forms. This wallet can be accessed via Metamask, a free internet browser extension, or a secure physical device. It can also take the simple form of a code printed on a piece of paper. To purchase an NFT, the wallet must contain enough of the relevant cryptocurrency – for example, ether (ETH) if the person is buying a token on the Ethereum blockchain. Ultimately, NFTs are digital contracts, with certain rules embedded such as the number of copies available for sale.
Most expensive digital image sold in 2021
NFT’s are making a loud splash in the art world. A collage by American artist Beeple (Mike Winkelman) has become the most expensive digital image ever, with the blockchain-verified artwork fetching over $69 million (over R1 billion) at auction. The artwork, titled Everydays: The First 5000 Days, was listed on Christie’s, on 25 February 2021 for only $100, (about R1 500) becoming the first purely digital artwork backed by an NFT. As the artwork shot up to $69,346,250 about 22 million people tuned in for the final minutes of the auction.
Beeple’s Everydays – The First 5000 Days (21,069 pixels x 21,069 pixels – 316,939,910 bytes).
“These pictures are all done from start to finish every day. The purpose of this project is to help me get better at different things. I am currently on my 14th round of everydays. This year I’ll be doing a render every day using Cinema 4D and mostly Octane, instead of trying to learn new software, will be focusing on some of the fundamentals like colour, composition, value etc.” said Beeple on his website about his artwork.
Beeple has been posting a piece of digital artwork every day since May 2007 and has gained over 2 million followers. Everydays: The First 5000 Days is a collage of his daily digital creations spanning more than 13 years. He sold his first two NFT-backed artworks for $66,666 (over R1 million) in 2020. In 2021 one of these artworks was resold for $6.6 million (about R10 million). If you would like a closer look at Everydays: The First 5000 Days follow this link – just a heads-up, some of the images are very… creative. (Not for sensitive viewers)
Human One also sold in 2021
November 2021 Beeple sold his second-most successful NFT artwork, Human One, for $28.9 million (over R441 000 000). Human One is based on a futuristic human-like sculpture that walks across ever-changing landscapes. “The hero of the work is a lone astronaut, forever striding through the wastes of a vaguely familiar world; one strewn with oversize Pop icons in various states of decay or perversion, punctuated by the occasional spray of flora, desolate stretches of sand dunes and a few nods to some of the titans of Art History.” Noah Davis, the head of digital sales at Christie’s, said in a statement.
The 3D movement is presented through four video screens of 16K resolution, which come together to form a 1.2m box. The unique feature of the work is that Beeple will continue to have remote access and creative control over it. This means that Beeple can change the creative elements, such as the landscape, as long as he is alive.
360° Video of Beeple’s Human One
Is NFT’s limited to digital artwork?
The explosion of NFT’s isn’t limited to artwork, any digital artefact can be assigned an NFT to verify its authenticity and subsequently sold. American rock band, Kings of Leon, released its latest album as an NFT. Items such as virtual furniture or fashion can be integrated into animations and be used in CGI movies or open-world games to create the impression that they are wearing or using the pieces.
Twitter founder, Jack Dorsey, even auctioned off his first-ever Tweet. “While transactions are labelled in USD, the money that changes hands is the Ethereum cryptocurrency. (So, my $500 tweet was actually worth 0.3 ether.) Once you buy a tweet NFT on Valuables, you can resell it on the platform, and a portion of the sale goes back to the original owner. Buying a tweet NFT doesn’t change the copyright or intellectual property, which remains with the tweeter, nor does it give you licence to commercially use the tweet’s contents. (So, you can’t buy, for example, an Elon Musk tweet NFT and then print it on a T-shirt, just like you couldn’t take an image of Meghan Markle and Prince Harry from a Royal Wedding commemorative mug and sell it.)” said Dorsey.
There are risks involved
Trading NFT’s involves a very technical process that can be misunderstood. This could lead to investors not knowing what they are dealing with. Every interaction with the blockchain involves fees to pay for “mining” and the hugely energy-intensive computer calculations needed to verify each transaction. Thousands of users might rush to buy a much-coveted NFT as it’s minted, and they have to pay the fees even if they walk away empty-handed. Some buyers use bots to try to ensure that they get their hands on a token, which makes the market even less accessible for newbie investors.
“A very small group of highly sophisticated investors rake in most of the profits from NFT collecting,” blockchain data company Chainalysis said in a recent report. “The data suggests that NFTs are far from a sure-fire investment,” Chainalysis concluded. And it added that NFTs are often sold at a lower price to enthusiasts who have helped to create hype for the project.
NFT’s is still something to keep your eye on!
NFT’s gives artists a platform to sell their artwork to a market that wants to buy their work. By displaying your art in the metaverse it gives people an opportunity to walk through your NFT gallery and look at your artwork. Everyone has the opportunity to put their artwork on the NFT platform and the space doesn’t have a lot of adoption yet, so it’s an open market for anyone to get their art out there.
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