Artwork is considered the ultimate expression of human creativity, an interpretive dive into the psychology of a time in history. From early cave drawings to romanticism, impressionism, and surrealism, the brush weaves ideas and culture of history into pictures. As the evolution of art continues along its trajectory, it has entered the realm of digitalization, the next step along the art continuum, assisted by the digital asset that started gaining huge popularity, namely the non-fungible token (NFT). A few months ago, digital artwork was posted online for free, generating likes, shares, comments, without a solid revenue stream. However, with new emerging technology outlining the rules of digital ownership, the game has changed.
What Is The Deal With The Non-Fungible Token (NFT)?
An NFT (non-fungible token) is a digital asset that exists within the blockchain ledger, which verifies authenticity. Each NFT has a unique digital structure, differentiating itself from cryptocurrencies. Bitcoin can be traded for another bitcoin, but an NFT cannot be traded for a similar NFT, since there is only one of its kind. This can be related to how festival tickets cannot be exchanged between people since each ticket is uniquely catered to the buyer with their name, age, data of purchase. NFT can be pegged to anything, however, currently, excitement is drawn to its use as digital art, media, and videos.
What Impact Can NFT Have On The Digital Media?
NFT has had a big impact within the digital media sphere, which was previously saturated and a difficult medium to assert ownership. The ubiquity and accessibility of digital art rendered the area undervalued, where most digital artists with modest followings used merchandise to generate money. Digital artist, Jazmine Boykins, said “You will have so many people from different backgrounds and genres coming in to share their art, connect with people and potentially build a career. Artists put so much of their time—and themselves—into their work. To see them compensated on an appropriate scale, it’s really comforting”.
One might question why someone would pay for an image that is very accessible online. However it is backed by digitally unique encrypted information of ownership, many people might have the jpeg, but only one person owns the rights. Right-clicking and downloading the NFT image won’t create millions, since the file doesn’t hold the information within the blockchain. One can print the works of Van Gogh, but only one person owns the original canvas. Such that people desire original authentic baseball cards, NFT has allowed people to tap into their desire for the original. It is not too far of an extension considering $3.12 million was paid for the legendary rare ‘Honus Wagner’ baseball card. The benefit of virtual NFT as opposed to a physical collectible, is that it is very easily verifiable. Encryption makes it distinct from any other NFT, mitigating fake collectibles which exist in the realm of physical collectibles.
High Auction Prices As The NFT Popularity Increases
The surge of attention towards NFT stimulated high auction prices, across many media types.
Some of these were obscure, such as a digital flower that sold for $20,000, or a sock sold for $60,000. On Thursday, a New York Times columnist sold his article for $563,000. Furthermore, the first-ever Twitter message, which read “just setting up my twttr”, was recently sold for $2.9 million.
The roof was blown when the digital artist “Beeple” sold his collective works at an auction, facilitated by Christie’s, for an astounding $69 million. Considering his highest compensation for an art piece was $100 before the emergence of NFT, it has changed the landscape for digital artists. He is now considered “among the top three most valuable living artists” following the sale. Noah Davis, a contemporary art specialist at Christie’s, said “He showed us this collage, and that was my eureka moment when I knew this was going to be extremely important. It was just so monumental and so indicative of what NFTs can do”.
The auction winner was entitled to encrypted rights, alongside the original digital file. There is a conversation about whether the price is backed by authentic creation, whether the prices are justified, or the byproduct of a hype-driven auction.
Is The Non-Fungible Token (NFT) Craze A New Digital Asset Bubble?
However, there is an environmental detriment at the hand of NFT. Blockchain, which NFT operates on, is run through an algorithm called Proof-of-Work (PoW), which is computationally inefficient by design, in order to maximize security, but uses a lot of energy. The average NFT footprint is equivalent to an EU resident’s total electric power consumption for more than a month, equivalent to driving for 1000Km.
NFT craze could be speculated as the latest bubble, akin to the recent meme stock emergence from GameStop. Given the value of recent NFT auctions, it is attracting digital artists who previously released their work for free, collector enthusiasts, and those who want to ride the wave of the latest fad in attaining a hot buck.
Most of our lives are spent online, and the movement to the digital sphere becomes ever-present. It is a testament to the digitalization of the modern era, where people are willing to pay astronomical sums of money to receive a jpeg image to put on their desktop, instead of a physical oil canvas to hang in their house.
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