Why a JPEG File Sold For $69 Million Over The Weekend: And its Implications On NFTs
The reaction after the beeple sale was ecstatic, to say the least — as usual it cued a media frenzy because of the astronomical figures. Well, it’s not just a regular ol’ beat-up image, it’s an NFT (Non-fungible token).
Blockchains have graduated to diverse tangible solutions but intangible NFTs properties pulling in massive collectible power. The NFT titled “Everyday’s -the first 5000 days sold at an auction by Christie over the weekend.
The winning bid was by a Singaporean crypto investor using the pseudonym, Metakavon. Everyday -the first 5000 days is a montage of digital art made by Beeple since 2007. While this isn’t the first NFT to make headlines, it has outdone the others by miles.
Even for Christie, selling digital art was a first but it has attracted the attention of millions riding high on the record-breaking Bitcoin meteoric which closed at $60,000. What are NFTs (Non-fungible tokens) anyway?
What Are NFTs (Non-Fungible Tokens)?
The name non-fungible tokens were first coined by the creators of ether coin, ethereum. Before that, the precursor to NFTs, Colored Coins which run on the bItcoin blockchain was abandoned in its infancy because of feasibility issues.
Colored coins failed because the underlying bitcoin blockchain wasn’t designed to sustain it. However, this laid the framework for what would later be known as NFTs. Etherum is built to handle NFTs on a separate blockchain from the ETH coins.
Other blockchains have created native frameworks that support NFTs including Bitcoin cash (created after a hard fork on the Bitcoin network).
Non-fungible Tokens (NFTs) are unique creations that include digital art, baseball cards, virtual games property that only exist digitally. They get their value and uniqueness from their records on a public ledger on blockchains.
As with the operation of blockchain, no one can make any changes apart from the original creator. Technically, blockchain has solved a problem faced by digital art creators who would otherwise make little from their art.
For example, Beeple, a relatively unknown artist is now mainstream popular and his piece of art now holds a record third in sale value for a living artist, just behind traditional artists, David Hockney and Jeff Koons.
Beeple, whose real name is Mike Winkelmann, has broken into new frontiers. The digital art scene, specifically NPTs, has gained new enthusiasts ever since the completion of the auction.
At best, the traditional art scene, especially the sellers, know they can make a living through similar sales. But even with the ultra high spending, Metakavon is a bona fide investor in the blockchain and cryptocurrency.
He too has a lot to gain from the newfound traction and possibly higher prices — from the speculation fueled collectible arts industry.
From a layman’s point of view, it simply means, their new art collectors are waiting for someone gullible enough to spend much more on perceived accumulated value over time. But this presumption could be wrong..
What’s Fueling The NFTs Boom?
In 2020 alone, Bitcoin value jumped from $5700 to $60,000 last weekend. Bitcoins may be responsible for minting millionaires in the last few years than any other highly liquid assets out there.
The bitcoin or generally crypto-mania investment frenzy has been fueled in part by the extensive coverage by the media. This is an improvement from the far cry wide berth and bad press Bitcoin got from the same media initially.
Newly minted millionaires have found new ways to make bold statements. Once the NPTs tech was completed and approved, digital art value jumped almost immediately. Initial art prices were modest in comparison with the Beeple art sale.
Nevertheless, they set new world records with their equally competitive prices by normal collectible standards. But why would anyone spend so much on a JPG that can be, printed or a video that is easily accessible elsewhere such as a LeBron James dunking video?
Well, it’s the mystery of collectibles fueled by the rarity and the uniqueness implemented through Blockchain. In essence, no one else owns that particular piece of art besides the owner who paid millions for it.
It’s a fairly new concept for non-cryptos evangelists but a valuable one. NFTs are still boxed in a niche market unless they start attracting traditional art buyers and collectors. There’s a high chance that the market is now ripe for such investors.
Real-World Examples Of NFTs Applications
NFTs have proven their credibility through the unique proof of ownership. While the buzz surrounding the art sale is great, it is way off-limits to normal users without extra cash to burn. That said, NFTs got more applications for everyday usage.
The reason some of the applications are not rampant is that they’ve not been implemented. For instance, a blockchain may facilitate proof of identification in contracts or even property title deeds.
The only downside is that the authorities conferring these documents need to first embrace the use of blockchain.
Other real-world applications include car registration, us as collateral or even purchasing domain names. The natural growth of blockchain technology means over time the hype will fade and the subtler, less risky application would be the only sustainable application.
At the moment, we are witnessing a revolution, a somewhat protest that’s sending ripples all through the interwebs and mainstream media. The crypto millionaires can sustain the booming art trade while artists get decent money for their hard work.
