Frankly, we have the right to ask ourselves the question.
Millions of dollars spent to have a simple pixelated image? An image that can be created in minutes?
Some will say that it is not great art. And we wouldn't want to debate what is or isn't art. If this is seen as crypto art, why not, it still doesn't solve the problem. These images (often made very easily) are sell millions of dollars without having the property rights…. That's the problem, actually. So that’s what interests us here, which is why have NFTs gained so much value?
What justifies this insane price? And what does this mean for the future of cryptocurrencies and the art world in general.
The question is interesting, isn't it?
Let's go then
The first NFTs sold for millions of dollars are still talked about…
The first NFT that caused a sensation was the sale for more than 200,000 euros for a simple video clip of basketball player James LeBron.
The owner could have bought a house, a nice car at that price or lived like a pasha for years. No, he deliberately preferred to buy an image available on the Internet and accessible to everyone.
It should be remembered that at this price, the owner does not have the rights to broadcast the clip. The clip will continue to be shared on the web and nothing changes except for the wallet of the person who created this clip.
Especially since I add that these videos and images, everyone can use them. The proof in this article, I represent in this article freely although I mention the authors.
Yes, it's certain, new vocations to be graphic designers will emerge, that's certain. But what does the owner (a certain Jesse Schwarz) actually own? In fact, he obtains proof on the blockchain that he is the owner of this clip. Nothing else.
And this music video was just the beginning of an incredible series of multi-million dollar NFT sales!
And the long and crazy list is getting longer and longer!
We can also cite the flying cat of NyanCat sold for $500,000.
The pixelated drawing of a cryptopunks at 600,000 dollars or even a personalized song by DJ 3LAU.
We can also cite the record sale of a 10-second video for more than 6 million dollars from the artist Beeple.
At least, for this video, it is sought after and has a truly artistic character, as far as we can tell. Besides, Beeple has been considered a digital artist for many years.
CROSS ROAD
- Nifty Gateway (@niftygateway) February 25, 2021
By @beeple
The #1/1 from beeple's first NG drop has just resold on the secondary market for $6.6 million.
History has just been made.
Congratulations to beeple and of course to @pablorfraile for the sale. pic.twitter.com/mTYG4VABSw
I would like to clarify this fact because most NFTs are not necessarily created by renowned artists. Sometimes and often, it is the work of an amateur or a person who does this for simple entertainment.
This is also why such enthusiasm and such expenditure surprise us.
These digital assets, which are non-fungible tokens (NFT), are therefore attracting ever greater interest that we do not always understand. We have to be honest, there is something to surprise us.
More and more companies (not just in art) are interested in this crazy phenomenon and even artistic organizations like the famous auction house Christie's are very interested in it. Moreover, the auction house recently sold a work in the form of an NFT.
We will understand why this is relevant. Stars are also getting involved, like the singer Grimes and Lindsey Lohan, to name a few.
Okay, so what makes NFTs so valuable?
First of all, the NFT as an indivisible token is absolutely consistent with the art world. By definition, a work of art is unique and indivisible. Likewise, the NFT token is also unique and indivisible.
So, an NFT is ideal for representing ownership of an asset (digital or not). An NFT can then represent an art painting, a digital work of art, a video clip, an audio file, a car, a house or land
What you need to understand is that the NFT is not the work itself, it is rather the act of digital ownership of the work in question. This is what makes the strength of the NFT. Unlike property deeds in the real economy, these are recorded in falsifiable files, there is no tracing and history of its history and corruption (human or material) can erase everything.
With an NFT, you cannot cheat. The NFT proves that the person who owns it is clearly the owner and only a sale in a marketplace like OpenSea for example, can find out who owns the property deed. The NFT actually acts as an act of ownership.
What benefits can non-fungible tokens bring to this industry (and others)?
Actually, let's go back to the real problems we have with physical objects (whatever they are):
- We cannot verify the authenticity of an act. You have to go to a specific server and ask for authorization. Or even worse, having to verify the document manually. Hello errors...administrative slowness...
- Deeds can be largely falsified with human corruption or with material destruction. If a property deed is certified on paper, like a diploma for example, a fire can cause the diploma to disappear.
- We cannot see the history of actions. For example, for cryptopunks, you click on a punk profile, and you have all the history displayed from the beginning. We can know everything.
- We cannot sell works easily in real life, there are payment problems and geographic borders.
It is all these problems that blockchain solves hands down.
That said, is that enough to explain the purchase of certain works at a cost of millions?
Finally, when we understand to what extent blockchain can solve these problems inherent to intellectual property, then we can understand why we invest in blockchain and in certain cryptocurrencies. This confirms, for example, our idea that blockchain is the future.
We can see that this could well be the norm in a few years.
That said, what we don't understand are the crazy sums spent. For example, when we buy a bitcoin, it completely belongs to us, ok. As for NFTs, the act certainly belongs to us but the work itself does not belong to us. It is this dichotomy that ultimately makes us not understand why some people buy these expensive works.
Why buy the James LeBron music video? What will the owner do with it? It does not have copyright, we remind you. Anyone can take a screenshot of their image, upload it and even create it by someone using simple image software.
Is this pure madness?
A rational madness behind the explosion of NFTs
Even if we've been talking about it lately with the crazy sums we have above, you should know that we've been talking about NFTs for several years now.
In fact, as soon as they appeared, it was crazy. Remember CryptoKitties cats? The virtual game in which you have to raise unique cats that you can resell and exchange, had already caused a sensation in 2017, when it was released.
Well, maybe you don't remember, but cryptokitties were the pioneers in NFTs and also in amazing cat sale prices.
It was from there, in 2018, that we started to see NFT marketplaces for creating, buying and selling NFTs like SuperRare, OpenSea or, Rare.
But, it is especially in 2020 and even in 2021 that the market reached records. We have exceeded 350 million dollars.
According to the site Dappradar, the largest NFT marketplace is OpenSea which is followed by NBA Top Shot. This marketplace is causing a sensation but it is accessible to residents of the USA. That said, if you have a VPN, you will be able to go there 😉
This marketplace is making a lot of noise. Launched only in October 2020, it records record prices. In fact, NFTs are short clips of certain historical moments in basketball. These collectible cards are called "moments". In other words, the highlights of basketball history. Some cards have more than 1000 copies and the rarest ones are absolutely unique.
Each video is represented by an NFT and it sells for a lot of money. The sales volume reached more than 300 million dollars only after 5 months of existence. Every star-up's dream, isn't it?
We also have a platform like this with collectible football cards in the form of NFTs on the platform Sorare, focused on football.
The (probable) reasons which explain this craze for NFTs and crypto art
It seems that a bit like the famous "DeFi Summer", this is the covid situation. Yes, there are always positive things even in war.
In short, it seems that the global lockdown has pushed us all to consume more digital content. Museums closed, exhibitions closed, no theater, nothing. The empty streets; This is what would have made us voluntarily turn to digital art.
Then, more and more institutions showed their interest, Elon Musk, Mastercard, big names and even auction houses which publicly approved the use of cryptocurrencies. Likewise, this was preceded by a certain boom for DeFi protocols as well.
Also, during periods of crisis, it is well known but non-fungible goods tend to increase in value, such as gold, rare coins or collectibles. Gold, for example, rose during the Great Depression, during the stock market crash of '87 and even after the 2008 crisis (which also partly gave rise to Bitcoin).
It is also covid and confinement which allowed culture to become better digitalized…We can even say that the boom in NFTs is largely explained by the confinement of the planet as a whole…
Finally, people work online, they have food delivered to their homes, they play sports at home, they have aperitifs on Skype, of course they were going to consume art on their computers. It was the logical next step.
No, don't you think so?
And, it is not only digital art and crypto art that have experienced an explosion, but multiple forms of NFT have appeared. In gaming, in virtual (or real) real estate, etc. We have seen massive enthusiasm for all forms of NFT.
The type of NFT that is currently making a splash other than those of crypto art are also those concerning virtual real estate. We can think of the SuperWorld project for example which, a bit like Decentraland, is attracting strong interest. An anonymous buyer paid $1,5 million to own a 9-block virtual domain on the gaming marketplace: Axie Infinity.
But the question of the real “value” of these crypto art is still there…
Frankly, even if we are part of this craze, we cannot deny the raw reality.
I mean, do you really think a pixelated image of a cryptopunk is worth 200 euros? Do you think NyanCat's flying cat is worth its $000? Can a Logan Paul video NFT really be worth $500,000?
Seriously?
Is the world not going right or something?
We could do much more useful things, such as funding research laboratories, right?
Yes, that's true, but in fact, it's exactly the same thing as what happens in the real economic world.
Regularly, objects of deceased stars are sold for thousands of euros. Every day, wealthy people buy Crystal chandeliers for several thousand dollars. Every day, women and men buy luxury bags worth a minimum wage.
The madness that we see breaking out in the field of NFTs only reproduces what we see in the real world. Quite simply. You don't have to look any further.
And to conclude and answer the question that motivated us to write this post, if people are spending millions on NFTs. There is nothing new on the horizon.
For years and certainly(?) since the origin of humanity, man has been buying expensive things, sometimes in an exaggerated way because it is a subjective feeling which gives him the perceived value of the object...
And, you can give all the arguments in the world to castigate his crypto art, to show that the object is awful, that the object is useless or that it is nonsense, if the person in front of you sees any value, then it can want to own it for millions of dollars...Even though it would be a pixelated image of a cat and she couldn't do anything with this photo...Just rejoice at having her, and her alone.
? If you are interested in the topic, you can read other articles on the current NFT revolution.
Watch the video on NFT.
