Millionaire Digital Certificates of Authenticity
Before fully diving into the world of NFTs, let’s see if we can clearly explain their complicated and abstract universe. The initials NFT come from the English “non-fungible token,” or in other words, a non-fungible token. You’re still confused, right?
To fully understand their meaning, it might be easier first to know what a fungible asset is in the world of economics: something with units that can be easily exchanged, like money. NFTs, on the other hand, are assets with unique properties that cannot be exchanged or, in other words, cryptographic assets based on blockchain that cannot be copied because they consist of unique identification codes and metadata that allow them to be distinguished from one another. What blockchain technology achieves, which is also found in cryptocurrencies, is to provide trust and traceability to the works. On top of this, NFTs are not physical objects that we can touch.
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And what does all this jargon translate to? You might ask. NFTs are digital tokens that can be understood as certificates of ownership of virtual assets. Traditional works of art are valuable because they are unique and irreplaceable. Unlike digital files, which can be duplicated easily and repeatedly. Thanks to NFTs, art can be tokenized in such a way that a digital certificate of ownership can be created to be sold and bought.
Do NFTs prevent people from copying digital art? No.
One of the most well-known worldwide cases of buying one of these digital certificates was the auction of an NFT by the artist Mike Winkelmann, known as Beeple, by the auction house Christie's, which put it up for sale for the staggering sum of 58.6 million euros (69 million US dollars).
Millions of people have seen the artwork and it has even been copied and shared many times.
In fact, it seems paradoxical that, in many cases, the artist who created the work even retains the copyright to continue producing and selling copies. The exclusivity that the NFT grants to the buyer is that this buyer owns a token that proves they are the owner of the "original" work.
Millions of euros for a certificate of authenticity of a digital work, crazy?
The American investor Pablo Rodríguez-Fraile bought a video for 60,000 dollars a few months ago and just sold it for 6.6 million dollars. Well, actually, the sale was of the certificate of authenticity of that video, an original work by the highly valued, and previously mentioned, artist Beeple.
"There are several digital markets where artists display their works and you can buy them. Blockchain allows registering that the work is truly the artist’s original", Rodríguez-Fraile told BBC Mundo.
Logic leads us to think that anyone can “tokenize” a work to then sell it as an NFT. Interest in this activity is also growing, especially following the multimillion-dollar sales that are taking place.
On February 19, a Gif of Nyan Cat, the famous 2011 meme of a cat with a cookie body flying, was sold for more than 500,000 dollars. Weeks later, Canadian singer Grimes sold a collection of digital works for over 6 million dollars.
Although artworks are the most sold through NFTs, other types of assets can be bought and sold. For example, Twitter founder Jack Dorsey sold his first tweet for nearly 3 million dollars.
A trend not without criticism
Beeple himself seems to have stated that this NFT trend will cause a bubble and that we might even be currently immersed in it.
For his part, David Gerard, author of the book Attack of the 50-foot Blockchain, has stated on some occasions that he considers NFTs like buying official collector’s items. Perhaps for this reason, he thinks it will not be easy for anyone to make large sums of money by tokenizing their creations and selling certificates of authenticity. In fact, he has also commented that all these new people selling NFTs are crypto-swindlers trying to make money from something worthless.
Charles Allsopp, former auctioneer at Christie's, believes that the concept of buying NFTs makes no sense. He finds the idea of buying something that is not really there strange.
Now you know everything, or at least everything we have been able to explain to you, about NFTs. What do you think about it?
