Have you heard of NFTs? No, not “NTFs” as in “Not Too Funny” (although that might be up for debate), but NFTs as in “Non-Fungible Tokens”. If you’re feeling lost and confused, don’t worry, you’re not alone. NFTs are a new digital craze that’s been taking the world by storm. Some people are calling it the future of art, while others are scratching their heads and asking WTF – “What the fungible?”. But fear not, my friend! By the end of this article, you’ll be an NFT expert. Or at the very least, you’ll be able to nod your head and say “Ah, yes, NFTs, I’ve heard of those before…kind of.”
What are NFTs?
NFT is short for Non-Fungible Token. I know, it is saying all and we don’t have to continue, right? Got you! Of course yes, that’s the point of this article. Non-fungible means that something is unique and cannot be exchanged for other things of the same type. Like one Canadian dollar coin, they are fungible. If you got 1 dollar the value of the coin is still 1 dollar, and it doesn’t matter if there is a picture of a loon bird, hockey player, or a poppy flower. It is still a 1 dollar coin. It means this is fungible. So what non-fungible means then?
Okay, let’s start with an example, Mona Lisa by Leonardo Da Vinci. You have to know it, it is one of the most famous paintings in the world.
Digital Mona Lisa
The painting is a physical object that people can see and admire. But just because you can see the painting, that doesn’t mean you own it. The painting has a certificate of authenticity that proves it is the original painting made by the artist. The certificate of authenticity is like a special code that proves the painting is one-of-a-kind. And there are so many copies of it all over the place, like on posters, t-shirts, coffee mugs, or even toilet paper.
Well, let’s imagine that Mona Lisa is an NFT. That means there’s only one, single digital version of the painting that’s worth a ton of money. It’s like the one original copy, and it’s so special that nobody can just go and make a copy of it like they can with regular posters.
To be honest, it is easy to copy it, right? In the digital world, it means, just a few clicks on a keyboard. But as the certificate of authenticity behind the original Mona Lisa in Louvre is one of a kind and says this painting is original, the similar original code called NFT is behind the digital art saying this is one of a kind. You can copy it, but the worth of the copy will be the same as the Mona Lisa printed on toilet paper.
NFT Hockey players
Let’s have another example, imagine you’re a huge ice hockey fan. You’ve got a whole bunch of trading cards featuring your favorite players. But this isn’t just any hockey card – it’s an NFT! That’s right, even hockey players can get in on the NFT craze.
So what’s the big deal about NFTs? Well, it’s like having a fancy digital hockey card that’s super rare and valuable. It’s like when you were a kid and you traded your Gretzky card with your friend for a whole bunch of other cards. Except now, instead of physical cards, we’re trading digital art.
When I was a kid I was trading stamps. One time I traded a rare collection of stamps for a bunch of cheap ones with my friend. Well, they didn’t have the same value. My father forces me to go back and trade everything back with my friend. I am lucky I have my father, and lucky my friend was a real friend. He understood and he gave me all the stamps back for his. But that taught me the value of things, where not everything is the same value. I didn’t understand at first as I thought it is just a paper with a little bit different pictures. So what’s the difference when I can have more stamps to trade these 3 rare beautiful ones?
That is non-fungible. When it is one of a kind! The only original and cannot be traded for a similar thing. One original doesn’t have the same value as another original. It’s like trading Mona Lisa for a hat of Justin Bieber, but not the same value (at all.)
If you are starting with art, maybe you could be interested in this article. Written by Mackenzie Parker – Oh dear… where to start?
The uniqueness of what are NFTs
One of the most notable aspects of NFTs is their uniqueness. Unlike traditional digital assets such as JPEGs or MP3s, which can be replicated and exchanged infinitely, each NFT is one-of-a-kind and cannot be duplicated or exchanged for an identical item. This uniqueness is achieved through blockchain technology. That allows for the creation of digital assets that are verifiably scarce and authentic.
This scarcity and authenticity have led to NFTs being used for a wide variety of purposes. Digital artists and creators have begun using NFTs to sell their work. It is allowing them to prove ownership and authenticity of their creations. This has led to a new market for digital art, with some pieces selling for millions of dollars.
Scarcity and Authenticity
Imagine you’re a highfalutin art collector, and you just dropped a few million bucks on a fancy painting. You want everyone to know that you have the real deal, not some cheap knockoff bought on the flea market for $20 (but who knows, maybe even on the flea market you can buy the original and the seller just doesn’t know.)
That’s where authenticity comes in. Just like your expensive painting, NFTs need to be authenticated so everyone knows it’s the real deal. It’s like when you buy a fancy watch and you need the certificate of authenticity to prove that it’s not just a knockoff from some guy selling watches out of the trunk of his car.
Scarcity is another big deal in the art world and the NFT market. It’s like when you’re trying to buy the latest Jordans, and there’s only a limited number of pairs available. That’s what makes them so valuable and sought-after. In the same way, if there’s only one original NFT of a particular artwork, it becomes super valuable because everyone wants to own it. It’s like when your buddy has the only copy of a rare album, and you have to borrow it to impress your friends.
So, whether you’re a high-end art collector or just a sneakerhead trying to score the latest kicks, you know the value of authenticity and scarcity. These concepts make sure that the real deal is protected and coveted, and that everyone else is just left to drool over your sweet, sweet NFT collection.
What is the high value of NFTs all about
It is pretty hard to explain why people are spending millions on specific NFTs, but it is the same in the art world for specific art. Recall Maurizio Cattelan’s work – banana taped on a wall, which was sold for $120.000, but let’s get closer to the answer. People are paying big bucks for NFTs because they think they’ll be worth even more money in the future. It’s kind of like buying a fancy toy that you think will be worth a lot of money when you’re older.
Some people buy NFTs just because they’re cool and unique, while others hope to make a profit by selling them later on. Think of it like collecting rare and valuable stickers, except these ones are digital and can’t be peeled off your laptop. Either way, people are investing in NFTs because they believe they’re the future of digital ownership, and who doesn’t want a piece of that action?
What are the hot NFTs?
One of the biggest NFTs highlights of 2022 was definitely Donald Trump’s NFT collection of 45,000 NFTs. He sold each of them for US$99 and they were digital versions of himself picturing the moments in his life. All 45,000 NFTs were sold out within 12 hours and made him over $5 million American dollars. And if you want one of his NFTs, the minimal price for one of them is starting at double the original price (around US$230.)
Not so Bored Apes
One of the most famous NFTs is definitely Bored Ape Yacht Club. They were founded in Miami by a bunch of friends who launch their project in April 2021 and they sold out all 10,000 digital Bored Apes within 12 hours at the price of $190. The collection got viral and became worth more than billions of dollars.
They get together with Yuga Labs and continue creating more NFTs. For example in August 2021, they create The Mutant Ape Yacht Club. It is a collection of 20,000 NFTS based on the original characters in the Bored Ape Yacht Club. Like the Bored Ape Yacht Club, the Mutant Ape Yacht Club has a strong sense of community, with members referring to themselves as “Mutants.” Members can participate in exclusive events, access private chat groups, and even earn rewards for holding onto their NFTs. And basically, the team’s long-term vision is to create the whole universe of their characters, as for example you can buy a mutant serum to create Mutant Ape from your Bored Ape, or adopt a dog, and now they are launching a game. But this could be talk for maybe another article.
Many artworks in one and mass of units in one
In March 2021, an NFT artwork “Everydays: the First 5000 Days” by the digital artist Beeple (Mike Winkelmann) sold for $69.3 million at Christie’s auction house, making it the most expensive digital artwork sold at the time. But later that year on December 4th, the anonymous artist called Pak sold his artwork “The Merge” for US$91.8 million making it the most expensive digital artwork ever sold.
New ways for NFTs
In addition to digital art, NFTs are also being used in the gaming industry. Players can now purchase unique in-game items, such as weapons and armor, that can only be owned by one person. These items can then be traded or sold on the open market, leading to a new way for players to make money and for game developers to monetize their games.
For example, the popular blockchain-based game Sorare has been using NFTs to represent unique in-game player cards. These cards can be bought, sold, and traded among players and some of them have reached impressive prices. One of the most expensive Sorare player cards sold for $60,000 in February 2021.
NFTs are also being used in the world of virtual real estate. Platforms such as Decentraland and Somnium Space allow users to purchase virtual land and buildings, which can then be used for a variety of purposes such as gaming or virtual events. This has led to a new market for virtual real estate, with some virtual plots of land selling for hundreds of thousands of dollars.
Impact on the art world
NFTs have introduced a whole new level of enthusiasm and controversy into the art market. there are also concerns about their impact on the art and collectibles market. NFTs have taken the art world by storm, leaving traditional art dealers scratching their heads and wondering how they’ll make a living now that artists can sell directly to buyers. The market has become a bit of a circus, with collectors fighting tooth and nail to get their hands on rare pieces, like they’re at a Black Friday sale.
Of course, all this trading and selling comes with a cost – not just to collectors’ wallets, but to the planet too. All that energy usage could end up contributing to global warming, which means we’ll need to find a way to power NFTs with unicorn magic or something. But let’s focus on the positives, shall we? NFTs are opening up the art world to new voices and giving artists the chance to make a living doing what they love. Suddenly, artists have a new way to make money from their digital creations, and the world is their canvas.
It’s not just about selling art, though – NFTs have created a whole new world of online communities and collaborations. It’s like a digital art club, where artists can team up with fans and customers to create something truly unique.
And let’s not forget that NFTs are making waves in the international art scene. Who knows, maybe one day we’ll see a digital masterpiece hanging in the Louvre or the MoMA, and people will be like, “wow, remember when we thought digital art was just a bunch of pixelated nonsense?”
About the author:
My pursuit of artistic perfection extends beyond the stage and into the world of film. Represented by agent Jill Kabush at Dorothy S. Management, I am actively seeking opportunities to make my mark in the industry. Though my creative interests are diverse - including DJing and illustrating - my primary passion lies in acting. I received rigorous training at the Vancouver Academy of Dramatic Arts and have since performed in prestigious theaters such as Theater Around The Corner, Moravian Theater Olomouc, Theater DiGoknu, and Mlada Scena II. Through unwavering dedication and hard work, I continue to hone my craft and push myself to new heights in pursuit of artistic excellence.