The inherent ability of the Blockchain is unfolding steadily to the astonishment of those who are keenly watching. Digital artist Mike Winkelmann, popularly known as Beeple, two weeks ago had the Non-Fungible Token (NFT) of one of his art pieces sell for nearly $70 million and now holds the record for the biggest amount paid for an NFT.
Before Beeple’s feat, the record sale was a set of virtual land sold for $1.5 million on Blockchain game Axie Infinity in February. Interestingly, last year was a prolific one for the market, though it appears 2021 will be explosive since the past month, $200 million were spent on NFTs.
Per data from the Non-Fungible Token Yearly Report 2020 released by Nonfungible.com and L’Aterier, NFT transactions tripled at the end of last year. The report puts the total market cap for NFTs at $338 million at the close of 2020.
What Is NFT
Someone may ask, so what is a Non-Fungible Token? NFTs are digital assets representing a broad spectrum of distinct physical and intangible objects.
They range from collectible virtual real estate, games, sports cards, digital sneakers to artwork. Each NFT contains specifying data that makes it both distinguished from other NFT and effortlessly verifiable.
This uniqueness renders the formulation and distribution of fraudulent collectibles useless since each piece is traceable to the original owner. What this means is that artists’ intellectual property isn’t in peril anymore.
Absolutely different from cryptocurrencies, there is no means to exchange NFTs direct with one another. As you can discern, no two artworks are alike, despite that they might be on the same platform.
Further, NFTs are not divisible into meagerer units similar to digital currencies like Bitcoin and others. These collectibles are independent as a complete item.
Since data about NFT goes on the Blockchain through Smart Contracts, there is no chance to copy or duplicate it. The immutability of Blockchain data gives these tokens the strength to withstand misappropriation.
Shaping The Future Of Art
What are the benefits and shortcomings of digitizing the ownership of physical assets? Is the proof of acquisition worth more now than the actual possession?
Is this just the latest in a long list of bizarre trends that will dry up when the frenzy has subsided? Or is this now only the starting gun of a revolutionary way to buy, trade, and sell any number of collectible assets?
With the involvement of prominent brands and IPs like Animoca, Ubisoft, Warner Bros, NBA, Formula 1, The BBC, Atari, and more, Nonfungible.com believes it just the beginning of big things to come.
The fact that artists have the opportunity to sell their works in an international market in a digital mode directly without a third-party like a gallery will make them keep a chuck of their earnings. Again, via the Blockchain, intermediaries are no more a part of the art and collectible market.
There is another beautiful side to this whole development that is worth meaning. Artists, gamers, and collectible owners can factor into the art piece or the particular asset royalties in the likely event of resale.
It is a signal of another massive generational wealth creation in the making. Indeed the struggles for many artists and content creators are coming to an end.
Jazmine Boykins, a 20-year-old artist who has sold more than $60,000 in NFT in a few months, noted:
“Artists put so much of their time—and themselves—into their work. To see them compensated on an appropriate scale, it’s really comforting.”
This booming creative market represents a transformation in the growing global digital market. Perhaps, there is more on the way.
Possible Drawbacks
As an emerging technology, there are likely some downsides to the whole idea. While some people have raised the possible threats from security breaches, others think it might be like the ICO craze and died down soon.
More so, NFTs are comparatively new, so developing Decentralized Apps (dApps) for them can be complex. There is a necessity to make the process simple and easy for some people.
Some environmentalists also consider it a threat to the environment
in terms of power consumption of Blockchains. This argument is as old as frivolous to think of since they are still struggling to prove that.
Besides, a lot of Blockchain mining outfits are turning to an alternative source of energy considered clean. More importantly, the role of these technologies outweighs some of these non-existing environmental damages people claim.
Quite obviously, NFTs sudden swift ascent and the ensuing interest surrounding them is unbelievable in every sense. The progress is shaping the world of art collection, gaming, digital assets, and their speculation, and it seems nothing can stop it.