LONDON (AP) – A digital piece of art, adapted using cryptocurrency technology to make it one of a kind, is being sold at auction for almost $ 70 million this week. The deal made headlines worldwide and garnered interest in these kinds of digital objects – known as non-fungible tokens, or NFTs – that attracted attention, as well as artists.
In economic jargon, a fungible token is an asset that can be exchanged on a one-by-one basis. Think of dollars or bitcoins – each one has exactly the same value and can be traded freely. An object that is not adaptable, on the other hand, has a clear value, such as an old house or a classic car.
Cross this idea with cryptocurrency technology, known as the blockchain, and you get NFTs. These are effectively digital certificates of authenticity that can be linked to digital art, or, just about anything available in digital form – audio files, video clips, animated stickers, this article you are reading.
NFTs confirm ownership of an item by recording the details on a digital ledger, known as a blockchain, which is public and stored on computers on the Internet, making it impossible to lose or destroy.
Right now, these tokens are white-hot in the collectibles world, where they are used to solve a problem that is central to digital collectibles: how to claim ownership of something that can be easily and endlessly duplicated.
I DON’T GET IT. CAN NO ONE JUST COPY DIGITAL STAFF FROM THE INTERNET?
Sure, anyone can download, print, and hang a copy of Beeple’s art from his social media download. Just like you can take a picture of the Mona Lisa in the Louvre or buy a print at the museum gift shop. But that does not mean you own the original artwork.
One purpose of NFTs is that they can be used to trace the digital origin of an object, which can prove a select few owners. In the broader picture, it’s a way to create scarcity – albeit artificial – so you can sell something at higher prices thanks to scarcity.
“All the time, money and effort you spend in your digital life can create value for it,” said Chicago fund manager Andrew Steinwold, who started an NFT fund in 2019. ‘You have property rights in the physical world. Why do we not have ownership in the digital world? ”
Some NFT issuers give copyrights to the buyer, but others do not.
Beeple is an American digital artist based in South Carolina under the real name Mike Winkelmann. For the past 13 years, he has been creating digital sketches on a daily basis using 3D tools. Auction house Christie’s calls his work ‘abstract, fantastic, grotesque or absurd’. He has 1.9 million followers on Instagram.
In December, the first extensive auction of his art brought in $ 3.5 million, a notable amount surpassed by this week’s record-breaking sale of his collage “Everydays: The First 5,000 Days” for nearly $ 70 million, which in ‘ a digital currency known as Ethereum.
WHO ELSE SELLS NFTs?
Last year, William Shatner of the “Star Trek” fame sold 90,000 virtual trading cards for $ 1 each. Electronic musician Grimes sold $ 6 million worth of digital art last month, including a video clip featuring winged cherubs floating in pastel dream landscapes for $ 389,000. Clippings from NBA star LeBron James dunking sold for as much as $ 225,000. Actress Lindsey Lohan sold an image of her face. You can also buy virtual land in video games and meme characters like Nyan Cat.
Digital artist Anne Spalter started out as an NFT skeptic, but has now sold several artworks using the characters. The latest was a video called “Dark Castles” – of mysteriously distorted castles generated by artificial intelligence technology – which sold for $ 2,752.
“NFTs have opened up art to a whole bunch of people who would never go to a gallery in New York,” said Spalter, who pioneered digital courses at Brown University and the Rhode Island School of Design in the 1990s. “They are investors, they are technological entrepreneurs, they are in the world.”
BUT WHO WILL SPEND $ 70 MILLION TO ONE?
Christie’s on Friday identified the buyer of Beeple’s work as the financier of a digital art fund that goes by the pseudonym Metakovan, an announcement that could fuel concerns about a bubble in the art market for cryptocurrency. The buyer has set up Metapurse, which is described as the largest NFT fund in the world, which is likely to benefit from the greater attention.
According to the British auction house, the Beeple piece becomes the third most valuable work of art ever sold by a living artist, behind works by Jeff Koons and David Hockney.
Spalter said she expects from this bubble, though she still believes NFTs offer promise to artists to reduce fraud and misallocation of works.
“I’m still amazed at the prices and how high they are,” she said. “I think there will be a correction.”
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