NFTs can eliminate the original sin
It first started with CryptoKitties in 2017. Then we had CryptoPunks and NBA Top Shot. Most recently, this March, Beeple’s digital art piece “Everydays: The First 5000 Days” sold at Christie’s auction for US$69 million. All of these are NFTs. Essentially, NFTs are a way to transform a digital good, that can be endlessly copied, […] The post NFTs can eliminate the original sin appeared first on Daily Fintech.
It first started with CryptoKitties in 2017. Then we had CryptoPunks and NBA Top Shot. Most recently, this March, Beeple’s digital art piece “Everydays: The First 5000 Days” sold at Christie’s auction for US$69 million. All of these are NFTs. Essentially, NFTs are a way to transform a digital good, that can be endlessly copied...
It first started with CryptoKitties in 2017. Then we had CryptoPunks and NBA Top Shot. Most recently, this March, Beeple’s digital art piece “Everydays: The First 5000 Days” sold at Christie’s auction for US$69 million. All of these are NFTs. Essentially, NFTs are a way to transform a digital good, that can be endlessly copied, into something one of a kind. NFTs are digital collectible items (GIFs, images, memes, games, code, videos, artwork, music, games, even text) that people can buy, sell and trade. Almost any piece of digital content can be turned into an NFT, with the records of ownership and authenticity, maintained on a blockchain. Once its uploaded on a blockchain in the form of NFT, it will become a unique piece of digital content, as it will always be possible to determine the original file even if its copies are shared indefinitely on the web. Just like other cryptocurrencies, NFTs exist on a blockchain. But they are also different. Bitcoin and other crypto’s are fungible, meaning that one bitcoin is always worth the same as any other bitcoin. On the other hand, NFTs have unique valuations set by the highest bidder, just like a Rembrandt or a Picasso and cannot be directly exchanged with one another. Non-fungible tokens have been the talk of the town this year, especially since the sale of Beeple’s artwork at Christie’s. Are NFTs going to be an agent of change that disrupts the collectible world, with ramifications in other industries, or is it just a fad?
Ilias Louis Hatzis is the founder and CEO at Kryptonio wallet.
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The NFT market grew nearly ten-fold between 2018 and 2020. In 2020 the NFT art market took off, growing by 2,800%. According to data published by Statista, the total NFT market was roughly $55.3 million in size during 2020 with art, gaming, sports and other collectibles representing just over 70% of the market. In 2020, NFTs sold as artworks generated roughly 12.9 million U.S. dollars. Beeple’s First 5000 Days digital artwork was by far the most expensive non-fungible token (NFT) sold in 2021. With the activity we’ve seen so far in 2021, I think we can expect the NFT market to be substantially larger compared to last year.
NFTs attracted a lot of attention as part of the CrypoKitties craze in 2017, which allowed buyers to buy and trade digital versions of kittens. The market for the digital kittens rose steeply for certain rare items and then quickly fizzled.
But NFTs hold the promise to give people ways to make their work more valuable by creating scarcity.
NFTs are not just changing the art world. Other industries, from the NBA to sneaker makers, have also joined. Mark Cuban, for example, reportedly told USA Today recently that NFTs “could turn into a significant revenue source for the NBA over the next 10 years.” Mark Cuban is already building a new online gallery to display NFTs in any form. The new project dubbed Lazy.com, is effectively an online gallery for artworks.
In February 2021, Grimes sold about $6 million worth of tokens representing digital art on Nifty Gateway. The highest-selling piece was a one-of-a-kind video called “Death of the Old” that involves flying cherubs, a cross, a sword, and glowing light that’s set to an original song by Grimes. The winning bidder took it for nearly $389,000.
Memorabilia and other collectables is another genre of NTF that’s started to thrive.Dapper Labs has collaborated with the National Basketball Association to create NBA Top Shot, a marketplace for digital highlight clips that are the tech equivalent of baseball cards. In February, according to crypto tracker CryptoSlam, Top Shot reported $187.3 million in sales, an extraordinary rise of 1,197% compared to the prior 30-day stretch.
Taco Bell is an example of another big brand NFT play. It celebrated the return of potatoes to its menu with taco NFTs that sold out in minutes. The ‘NFTacobells’, five versions of digital art, selling 5 copies of each (25 pieces of digital art in total), are now being resold for 1,000s of dollars.
Recently, auction house Sotheby’s announced an NFT collaboration with digital artist Pak as part of its first sale to be held in April. AT&T’s DC Comics has put a proverbial stake in the ground, but the addition of companies with branded content such as Hasbro, Mattel and Disney would go a long way to legitimizing NFTs. In many respects there are few companies as adept as monetizing their IP as Disney, and given its character library that spans not only Disney characters but also those from Pixar, Marvel, and Lucasfilm, it could reap a huge windfall.