But I do not know how to turn it into one.
Photo illustration: by The Cut; Photos: Getty Images
Let me guess: you tried your hardest to ignore the topic of NFTs, but it’s come to the point that it’s impossible to avoid talking about it, and you want to be able to keep up.
I can sympathize. A few weeks ago I finally thought: Okay, I’m going to bite.. What are NFTs, and why do people pay so much money for them ?? But when someone tries to explain it to me, they usually start with ‘Basic …’ and then say something that might as well be in another language. Online commentators were just as bad, which is why I decided to take matters into my own hands and figure it out myself by putting together conversations with a handful of experts.
To be clear: I still have no idea what I’m talking about. There are many more thorough, more accurate explanations out there really interested. But if you are looking for one that uses Ghost wire analogies and do not take himself too seriously, then you are in the right place. My hope is that after reading it, you can meet someone halfway with confidence. But no more than that.
NFT stands for ‘non-fungible token’.
I know, ‘fungible’ is a ridiculously sounding word. Basically it means ‘interchangeable’. Like if we swapped quarters, we both still have 25 cents. A not-fungible token is unique, and can not be traded one-on-one. Think of it as the haute couture of currency; each NFT is exclusive to its owner.
Unlike couture gowns, NFTs do not exist in the physical world. These are strictly digital assets that consist of unique code rules stored on something called the ‘blockchain’, which looks like an immutable digital ledger, or, to use the right life meanings, a receipt in stone writing. You need cryptocurrency to buy one, specifically Ethereum.
Justify. Stay with me though, because I’m not even going to try to explain to you what the blockchain is or how it works. And I promise not to use the word “Ethereum” again.
Okay, since we’ve already used haute couture as a metaphor, allow me to try the plot of Ghost wire as a reference point, only for kicks. (If you have not watched it, please exit this window and do so before you continue reading.) Remember that Reynolds Woodcock designed a custom wedding dress for the Princess of Whatever? That gown is one of a kind. it is non-fungible. Even if someone were to make an exact copy of it, only the princess would have sewn the original, which has ‘never been cursed’, into his seam – effectively Woodcock’s autograph.
Now. Imagine this Ghost wire takes place in the year 2021. To get up to date, the House of Woodcock sells digital versions of gowns. Cool. The only problem is that they can not call this type of work haute couture. Why? Because digital assets are fungal. If Woodcock stored the completed project on his desktop – let’s call the file WeddingDress.jpg – it could be copied a million times and sent to a million different people, and everyone would have the same thing.
This is where NFTs come in. As luck would have it, there’s a princess who likes Woodcock’s work, thinks it’s fucking chic and wants an image of it. She is rich in cryptocurrencies, but she will only pay for a JPEG file if she can say so with absolute certainty she alone owns the original, no one else. Instead of buying WeddingDress.jpg, she buys an NFT of the file that Cyril offered on a digital NFT market like this, under the username Oldsoandso.
Without going into too much technology, what the princess bought is not the file itself. What she rather bought is basically a digital certificate of authenticity that says in the code: ‘Oldsoandso transferred the ownership of this file to me on this date for so much money.’ That The receipt, “minted” on the blockchain, where it cannot be removed, duplicated or wasted, is the non-fungible-haute-couture sign and something valuable. It’s as if Woodcock ‘never cursed’ wrote in computer language and sewed it into the image of the dress.
Exactly! It’s about having proof that you own the ‘original’ or ‘real’ version of a digital asset. And the digital asset can be anything: a tweet, a GIF of a flying cat, an NBA video with a highlight, even a photo of this article. A Times author recently auctioned off a photo of his article on NFTs for $ 560,000.
Using another movie reference is like in A walk to remember, if that guy buys a star for Mandy Moore. What he really bought was a piece of paper that gave him the right to name the star, not the star itself. No one can really “own” a star, just as no one can really “own” a tweet. We can all go online or look up in the night sky and see for ourselves. However, the piece of paper serves as something like an NFT.
Yes. Verifying a work of art as original has always been important to the art market. However, there has never really been a way to do that with digital art, so here we are.
Things increased rapidly, in part because the market for original artwork was so well established. In March, an NFT of a collage by digital artist known as Beeple sold for $ 69 million at Christie’s, which he said was ‘one of the top three live artists’. So the list is: David Hockney, Jeff Koons, and then … Beeple.
For the same reasons, people pay a lot of money for rare baseball tickets, uncut jewelry and of course haute couture dresses. Maybe they really love the thing and want to support the person who created it. (Bret Easton Ellis?) Maybe they think it’s a good investment. Maybe they have too much money and think it’s funny. Or maybe they just want bragging rights. Either way, people just like to own things, even if they are not essential.
There is also a certain aura to an original – something that artworks probably lost in the era of mechanical reproduction. “Now that there is a way to tie originality to digital objects, the question becomes: does the minted original have more aura than a copy of the digital file, or a screenshot of it?” asks Lauren Studebaker, an Internet researcher and author. “In terms of ownership, it’s an ideological thing,” she said.
Personally, I want to own an NFT of this extremely uncomfortable Vine that Times the chief fashion critic Vanessa Friedman took the Olsen twins in 2014.
If you are an artist or creator, NFTs have some benefits. “The concept of ownership (and therefore materiality) that an NFT provides an object can legitimize art made using digital means to the general public as equivalent to, say, paintings,” says Studebaker.
Creators also have the ability to enroll clauses in their NFTs. Beeple, for example, determined that he earned a 10 percent royalty on every resale of his piece of $ 69 million. “This is a problem in the art world, where a young artist will sell their work at an undervalued rate because they have to make ends meet, and then in a year or two the buyer will sell it for a huge profit,” he said. Studebaker explains.
She also added that artists could start beating songs as NFTs, enabling them to determine the price for subsequent streams, which currently do not yield as much profit as buying a CD or a song on iTunes. They can also sell original recordings, coin concert tickets as NFTs to avoid scrapping, etc. There are a million different ways artists can benefit from NFTs, from musicians to meme makers.
Big! Arguing about NFTs is the easiest part. In my experience, it can just be enough to upset someone, specifically a self-serious person who knows what Ethereum means, to just say those three letters in a row. (God help me after this Ghost wire analogies.) But for all the jargon and bullshit surrounding NFTs, the topic can actually raise interesting questions.
For example, a friend of mine recently sold an NFT of a digital smiley face he made, but was shadowed from a platform that was only invited when he wanted to sell a photo of his foot. This is a good feed for intellectual debate: does one qualify more as ‘art’ than the other? Who says that? What if it was a very good foot?
Another thing that people like to argue about is where it is going. Is it just a bubble? A fad? Or are we going to talk about NFTs for the REST OF OUR LIVES ??? The current hype is likely to disappear, but there is a world in which NFTs can be a common, boring thing. No one knows what the answer is.
Wow, thank you so much for asking! Let’s talk offline.