The strange world of NFTs
Bored Apes? CryptoPunks? Randomly generated doodles of cats selling for $20,000?
These so-called “NFTs” have taken the digital world by storm and caused mass hysteria, but many major questions about them still loom.
What even are they, and why are some of them so valuable? Continue reading for valuable insight into the world of NFTs and their impact on the digital landscape.
What is an NFT?
Chances are you’ve probably heard the term “NFT” floating around the Internet over the past year, but what exactly are they? The answer isn’t clear-cut or one-dimensional by any means due to the constantly evolving nature of NFTs, but the acronym does provide some insight into their basic function.
Put simply, NFTs are “Non-fungible tokens.” You might be thinking, “but what does that even mean?” Let’s break it down together step by step, focusing on the significance of some key terms.
1. Non-fungible: This means that NFTs are unique and can’t be replaced by something else. Cryptocurrency, like bitcoin, is largely fungible, meaning that you can trade one for another and have the exact same thing. However, NFTs give exclusive ownership of the digital artwork and can’t be traded at equivalency.
2. Token: Token is the term used to describe the one-of-a-kind nature of the asset, or NFT. It references the metaphysical side of the digital work, which can be anything from a kitty barfing a rainbow to an Anime character blowing bubble gum. This begs the question, “can just about anything become an NFT?” Dan Milmo, the technology editor at The Guardian highlighted the absurdity of it all, mentioning that “the most valuable NFT sale this year was ‘The First 5000 Days,’ a digital collage by Beeple, the name used by the American digital artist Mike Winkelmann, that was auctioned for $69.3m in March, making it one of the most valuable pieces of art ever sold by a living artist.”
3. Blockchain: The blockchain is a complex, ultra-safe online database that stores information regarding cryptocurrency transactions. The blocks within a blockchain depend on the cryptocurrency being exchanged and the details regarding the transaction. For instance, an Ethereum block contains information about the sender, receiver, and the amount of ETH being transferred. While a lot of NFTs are stored on the Ethereum Blockchain, some NFTs such as NBA Top Shot are sold using the Flow blockchain.
How are NFTs created?
After an artist has decided on the concept for their NFT, there are multiple different ways to mint their work and share it with others. Below we’ll go through the steps needed to take an NFT to market and start raking in the profits.
1. Come up with a concept: Let’s imagine that you want to create an NFT of a doodle you made of your dog Max. You like the drawing but you think it might need a little more spice so you upload it to Adobe Illustrator and make a refined, digitized version of Max the dog. What’s more, you decide to take it one step further by creating different Max aesthetics within Illustrator. Enter surfer Max, robot Max, gangster Max, and pretty much whatever Max your heart desires. Boom, you’re ready to move on to minting your precious digital masterpieces.
2. Decide on the platform: There are several options to choose from when making an NFT, but OpenSea is a very good choice for beginners because of its relatively simple layout and minting process. However, OpenSea does require account initialization with the listing of your first Ethereum NFT which costs $300-$400. Even though this may seem like a massive turn-off, after swallowing this pill you’ll be able to lazy mint NFTs for completely nothing. This means that you can upload your artwork, “mint” it to your profile, and list it for sale without paying high service fees, or “gas.” Then, when the collector buys the NFT, they will pay the gas fees. According to Investopedia, gas “refers to the fee, or pricing value, required to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform.”
3. Set up and connect your wallet: Wallets are used to store cryptocurrencies. The type of wallet should be compatible with the blockchain being used (ETH transactions require an Ethereum wallet). MetaMask is a company that specializes in crypto wallets, particularly Ethereum-based wallets that operate in applications like OpenSea. Once the MetaMask browser extension or app is installed, and a secure username and password are created, the next step is to connect your wallet. This is fairly easy in a marketplace like OpenSea, where all you have to do is follow the prompts on the website. Voila! You’re ready to introduce your NFT to the world.
But…why?
All of this may seem crazy. Granted, it is. However, the possibilities surrounding NFTs are truly endless. The exclusive experience that each and every NFT gives its owner, as well as their limitless nature, make NFTs an investment worth considering.
Each day, the NFT landscape changes as actors, athletes, and social media influences dip their toes in the alluring, shiny waters of the NFT ocean. In an article about NFTs by the Guardian, it’s mentioned that “trading in NFTs reached $22bn in 2021.”
Rapper and entrepreneur Eminem purchased a Bored Ape Yacht Club NFT earlier this year for roughly $462,000, promptly changing his Twitter profile picture to the image of the dozing ape. Even Minnehaha’s very own, Jalen Suggs, made his game-winning buzzer-beater that sent Gonzaga to a National Championship berth, into an NFT. It last sold for 4.5 ETH, which is equivalent to around $14,200.
These numbers highlight the sheer absurdity of NFTs and the massive potential they have in our current era. As art steps into the future and the metaverse continues to redefine the boundaries of reality, the steamrolling NFT market could mark a modern-day Renaissance.
Impact on art world
NFTs are drastically upending the world of art. The meteoric rise of NFTs has caused people to wonder what the future of art really is. Will physical art pieces be worth owning in 10 years? Why should we care if digital art is easy to make and fetching huge sums of money?
Art teachers, Nathan Stromberg and Katja Ornberg are fascinated by the emergence of NFTs in the art landscape but also question their longevity and the overwhelming hype that surrounds them.
“To me, it’s like, oh my gosh, you’re investing so much money. And then what happens if this bubble just bursts tomorrow?” said Ornberg, who noted that while NFTs are certainly wild, they also seem to lack stability.
Furthermore, she pointed out that “the whole hallway of buying art is for wealthy people. Those are the ones that don’t care if they lose this much money because they still have this much money left. It doesn’t matter as much to them.”
NFTs are definitely similar in that celebrities and influencers are willing to drop major amounts of cash on digital art because the hype is unreal and it cements their status as being top-tier. In terms of the ridiculous nature of NFTs, Mr. Stromberg pointed out that artists have been creating polarizing and mind-boggling art for quite a while.
“It’s not a new concept. There’s an artist Felix Gonzalez Torres who, in the 80s made this really famous piece where it’s just a pile of candy in the corner of the gallery. He was dying of AIDS, so the idea was that he was giving all that he had left as people came and took a piece of candy from the pile.”
Another example Stromberg noted was Marcel Duchamp’s “Fountain”, which was a urinal tipped on its side. Both of these are examples of breaking barriers in the art world and it seems like NFTs are defying new limits through the internet. After all, in the words of Ornberg, “How far can one go to sell a thing that’s not a thing?”
Day by day, NFTs are changing fundamental ideas of art one CryptoPunk at a time.