What Are NFTs? And Why Should We Care?
In today’s world, there are very few activities that haven’t found their digital substitute. To experience a new place, you still have to travel there. To try a new ritzy restaurant, you have to muster the energy to go eat there. And until very recently, to purchase high-end artwork, you were required to actually attend a show opening and peruse the gallery. However, with the recent implementation of NFTs, art aficionados can curb their cravings with a few taps on their phone. But how does this whole NFTs thing work, and why should we care?
NFT stands for non-fungible token, which basically means it’s a piece of blockchain data that can’t be replaced. More specifically, NFTs belong to the Ethereum blockchain, which is a platform used for cryptocurrency and second-largest cryptocurrency after Bitcoin.
Think of dollar bills as fungible data — a one dollar bill has the same value as another one dollar bill. But with NFTs, each one is unique and can’t be traded interchangeably. NFTs are different from Bitcoin in that they store information, so they’re not just currency. They can take basically any form, as long as it’s digital. You can think of NFTs as essentially a one-of-a-kind digital receipt that verifies that what you purchased is an original.
Currently, NFTs are creating a buzz over their disruption of the art world as people pay millions of dollars for digital art pieces like Beeple’s ‘Everydays: The First of 5000 Days’, which sold for over $69 million.
While select artists have been getting recent attention over large payouts, NFTs have the potential to be beneficial for the entire digital art landscape. Prior to these tokens, it was difficult for digital art to be verified as originals because anyone could just screenshot the art. But with the implementation of NFTs, there is a clearer pathway for digital artists to sell directly to buyers and be easily compensated.
Aside from just art, prominent figures have been playing their hand in the NFT scene too. Twitter founder Jack Dorsey recently sold his first ever tweet for more than $2.9 million and Elon Musk was offered, but turned down, over $1 million for one of his tweets.
And if you’re thinking what I was thinking, which is, ‘’Can’t you just, um, take a screenshot if you want digital art?,” you’re apparently missing the point. Part of the allure of NFTs as an art platform is that when you make a purchase, you can display the token showing that you own it. And nothing is better than having the original.
Despite NFTs’ current popularity, not everyone is a fan of this new form of buying and sharing art. Environmentalists, for starters, have complaints over NFTs environmental impact. While innovative, the mining of NFTs takes a tremendous amount of energy. For example, the energy it took to power the sale of French artist Lemercier’s digital work took as much energy as it would take to power his studio for two years. Additionally, there are concerns by digital artists over their work being converted into NFTs without their consent.
As the world of fine art has existed as historically exclusive and aspirational, NFTs provide an interesting dichotomy for the art world. On one hand, NFTs give artists a practical pipeline to conduct business digitally. On the other hand, there are legitimate environmental concerns over their use as well as their credibility and the broader question of what this means for the future of art.
However convoluted and nouveau riche NFTs may seem, if the recent success of Beeple and the like are any indications, these computerized tokens are here to stay.
Written by Isabel Bekele
Header photo by Worldspectrum from Pexels
