If, a couple of years ago, someone would have claimed that Nyan Cat gif could be sold for half a million dollars, we would have questioned the person’s sanity. But, one thing that the last 18-19 months have taught us is that the world is a weird, wild place where even your craziest thoughts could come true.
NFT has existed for quite some time now, but it caught the frenzy of the netizens when Twitter founder Jack Dorsey sold his first-ever tweet for $2.9 million as an NFT. Last few months witnessed a massive jump in the value of NFTs and going by the market speculation, millennials and gen Z are expected to spend big on NFTs this holiday season.
This post is basically to feed your FOMO and decipher NFT, NFT art and if it’s a revolution in the creative industry or a mere fluke.
What is NFT?
Literally a million-dollar question! NFT is a digitally unique and irreplaceable asset stored in a digital ledger to provide a public certificate of authenticity or proof/validation of ownership to that unit of data.
NFT stands for non-fungible token. In economics, a fungible asset is the one which is interchangeable and non-fungible asset is something that is irreplaceable. Too complicated? Ok! So, let’s take an example of a pair of Nikes that you have your eyes on. You order those Nikes but the brand is making hundreds and thousands of the same style in your size, so it doesn’t matter which pair you get in that style and size – that makes the pair a fungible product. On the other hand, there is your favorite, limited edition Nike pair that you own – which can’t be replaced for the uniqueness – this makes it non-fungible.
NFTs can be created from almost anything unique that can be stored digitally and holds value, like photography, art, music, videos, tweets, and even memes. Most of the NFTs are stored on Ethereum blockchain.
Enough of technology and economics. Let’s talk art.
NFT is considered to be an evolution of art collecting. NFT art is like a regular art collection item, but instead of buying a physical item, one is paying for a digital file and proof that he/she owns the original copy is stored in the digital ledger. Also, owning a digital art asset doesn’t mean that it can’t be copied or downloaded, it only means that despite the copies, the original ownership will stay with the buyer (imagine how many copies of Mona Lisa must be hanging in the living rooms around the world, but Musée du Louvre is the only place bestowed with original (probably).
Just like any other art form, the art here doesn’t have any inherent value, and is decided majorly through market demand. Mike Winkelmann — the digital artist known as Beeple, holds the record of selling his art at $69 million (Monet must be rolling in his grave).
NFT could be a great option for the artists to sell their work for which it’s difficult to find the right market. NFT can be created on software like Adobe Photoshop, Krita, Artweaver, SketcnhAR etc., and sell their work on marketplaces like OpenSea, SuperRare, BakerySwap, KnownOrigin, Rarible, AtomicMarket, Myth Market (Terrain.art and WazirX NFT. for Indian market).
For buyers, well, owning some cool NFT could be a flex (sanity went out of the picture long ago anyway)!
Creative revolution or a hype?
The pandemic has resulted in the next-gen digital revolution. The rise of metaverse has further pushed the cause for every kind of digital asset. But like every innovation and new trend, there are different point of views on NFT as well.
Dot-com bubble is a classic example of how the digital industry can manipulate the market on mere speculation. Despite big names like Marvel, NBA, Disney joining the NFT bandwagon, the future is uncertain. We still have to see if NFT would go down as another classic boom-burst tale or just fade as soon as some more exciting thing comes along. Also, so far, NFT seems more like a merely a playground for mega-rich, and art reduced to number crunching by crypto technology.
The other serious concern is the sustainability. The blockchain technology needs fossil fuels for the mining operations. As per fortune.com, a single Ethereum transaction consumes as much electricity as an average U.S. household uses in a workweek—and has a carbon footprint equivalent to 140,893 Visa credit card transactions. Now, do the math for the energy consumption of the millions of dollars of transactions we talked about – too expensive for the planet!
When our basic needs are met, we start creating value for random things which have no immanent value – this is how it has always worked for mankind. With the advent of technology, there has been a further psychological shift in how we value things. The future of NFT would be interesting to watch, anyhow.