In the art world and beyond, NFTs – or non-fungible tokens – are all the rage right now.
NFTs are crypto tokens that exist on a blockchain, the same type of digital ledger that keeps track of cryptocurrencies like Bitcoin and Ethereum. But unlike those digital currencies, NFTs aren’t interchangeable, as the name suggests. Instead, they’re original works of art.
Some of these digital assets are selling for big bucks: musician Grimes sold this short music video for nearly $400,000 and a vast collage called “Everydays: the First 5,000 Days” by graphic artist Beeple is the first piece of digital artwork on auction at Christie’s with a current bid of more than $13.2 million. (Note to interested parties: Bidding closes Thursday.)
Fordham University law professor Donna Redel, a boardmember of the Wall Street Blockchain Alliance, said purchasing NFTs provides a gateway for art lovers into cryptocurrencies like Ethereum.
“You have to get a wallet, you may have to buy some ETH, which is the gas or the currency that a lot of the NFTs are sold in,” Redel said. “And so it becomes a very flexible way for people to get involved in cryptocurrencies because they’re interested in art or music or NFTs are now in fashion.”
When someone purchases an NFT as an original image, video, GIF, trading card or even tweet — they’re establishing ownership of that work on the blockchain.
While the work may still be viewed or reposted by others, like Twitter founder Jack Dorsey’s first tweet, the digital ledger provides authentication to its original owner of the work.
In today’s emerging digital economy, the popularity of NFTs parallels explosive growth by cryptocurrencies like Bitcoin, the value of which has soared past $55,000 per coin recently.
NFTs grew in 2020 to encompass an estimated $250 million market, according to a report by tech-tracking company L’Atelier BNP Paribas and nonfungible.com.