Updated: Mar 29
I was recently working on a writing assignment where I was told that I would additionally be rewarded with an "NFT on blockchain" of my work. That's when I decided that that was it. I just couldn't ignore the NFT anymore, it was slowly beginning to penetrate spheres of my life and I had to do something about it. So I decided to go on a little blockchain journey and below are some findings I want to report back.
What the heck is NFT anyway? NFTs are non-fungible tokens. They can represent items in the physical or digital world and function as tokens of ownership on the blockchain. They are different from bitcoins and cryptocurrencies in that NFTs are not equivalent and cannot be used as currency in transactions. NFTs and digital art Digital artwork including images, videos and memes have really taken to NFTs. Any talk about NFTs and digital art would be incomplete without mentioning Beeple of course, a South Carolina based digital artist, who has sold several pieces of his digital artwork as NFTs, most notably Everydays: The First 5000 Days, a collection of 5000 days of indulging his passion for digital art, which was auctioned off for 69 million dollars by London based auction house, Christie's. Beeple seems as flabbergasted with the whole phenomenon as everyone else. But of all the artwork I have seen as NFTs, his work definitely seems worthy of the Ethers it is making. The purchase of Everydays for the price it did is definitely a great validation to everything one can achieve with perseverance and consistency in life and that when you pursue your passion, it inevitably leads to good things. Beeple's notorious sales garnered a lot of public attention and helped draw people into this realm and his credibility as a digital artist definitely made NFTs seem more legitimate and worthy of consideration, to people who may have been completely wary of this realm before.
On the other hand of the spectrum, you have the Nyan Cat Meme, created by Chris Torres, which is basically a cat with what Torres describes as a poptart attached to its body leaving a rainbow trail against a backdrop of pop music selling for 590,000 $ dollars? This is where I begin to scratch my head a little. Was this just someone who did not know what to do with half a million dollars? I find it hard to find a reasonable explanation for this valuation, But there obviously seems to be a market for everything on the NFT marketplace.
Nyan Cat l Foundation
And then there are folks who have capitalized on the idea of valuation based on scarcity. Well, it is interesting to note that NFTs offer a way of claiming digital ownership in a space that tends towards sharing and dissemination. Larva Labs released 10,000 limited edition cryptopunks, which are basically digital character collectibles that have sold for several million dollars, owners including celebrities like Jay-Z and Snoop Dogg. Then there's the Bored Ape Yacht Club, which is also based on limited edition NFTs and offers community to those who own one of their NFTs. Several popular celebrities have jumped onto this bandwagon including Justin Bieber, Snoop Dogg, Jimmy Fallon and more recently Madonna. Collectibles as these have definitely made the concept of NFT and blockchains more accessible and less formidable to the masses since they bridge the known, fuzzy and familiar with the unknown.
Speak of digital art and not mention AI? My, my. AI generated art is also garnering interest with platforms like Metascapes and Eponym providing users with the options to create images from text and combine AI with landscape photography to generate digital images.
NFTs and fraud There has been a staggering increase in the number of frauds where scammers sell the work of digital artists and rake in profits, a huge concern especially since many a time digital artists are unaware of their work being defrauded. The onus as of now lies on the artists to report such fraud to marketplaces such as OpenSea. There has been an embarrassing lag with respect to the growth that the NFT sector has seen and online marketplaces struggling to keep up in offering a safe and fair marketplace for digital artists. Opensea released a statement stating they were working on setting up verification systems and tools for fraud detection (clearly an afterthought); it seems like it is going to be a while, meanwhile putting digital artists in a vulnerable position.
Logistics: What are some online marketplaces for NFTs? There are several online marketplaces for NFTs including Opensea, Mintable, Rarible and various others. Some marketplaces offer specific NFTS such as NBA Top Shot for play highlights and Axie Marketplace for NFTs related to video games. Some require specific tokens and few permit purchase of NFTs directly using NFTs.
But can you transfer Ethereum from NFT transactions to a bank? How does it interface with 'real world' money? Say you have ethers from transactions on the blockchain that you would like to convert to dollars or euros. You can convert your cryptocurrency using a reliable cryptocurrency exchange service depending on where you are at. While there also seems to be the option of selling Ethereum directly, it goes without saying that one must use caution and good judgement when using any of these options and be aware of potential scammers. The NFT sector has seen a lot of growth in the recent years and garnered public attention with its intersection with art and culture. It definitely seems to be a promising avenue for the digital art community for commercialization of their work. However, there also is a lot of speculation on the lack of a central regulatory authority and its decentralization, potential for scams, money laundering and even environmental impact in terms of energy consumption. It will be interesting to watch this space evolve while addressing these concerns, especially as more of our lives incorporate digital