NFTs are everywhere these days. But what is an NFT exactly? NFT stands for non-fungible token, a type of digital coin. Unlike other currencies, NFTs are all unique. You can exchange your tokens, but the token you receive is entirely unique from the one you traded. This is how NFTs get rarity. Only one person can claim ownership, which creates value that has people scrambling to create and buy NFTs, including the infamous Bored Ape Yacht Club collection. These NFTs are easy to spot. Each is a customized digital image of an ape.
But BAYC doesn’t represent everything NFTs can be. What is an NFT art? NFTs could be songs, videos, or written works. They don’t technically have to be art at all.
You create or “mint” NFTs by creating new unique tokens that others can buy with cryptocurrency. Ethereum, which has been around for some time, is a popular option for buying NFTs but not the only one.
NFTs rely on the blockchain to track creation and transfers, verifying NFT ownership and enforcing that rarity. This same decentralized process encouraged investment in Bitcoin and other cryptocurrencies.
It’s easy to understand why people want to own art, especially if it’s previously been out of reach. But not everyone understands this craze. After all, the blockchain can’t prevent you from screenshotting someone else’s NFT and saving it to your computer. NFT lovers will tell you it’s really about ownership and not the file, but there are no physical goods. So what exactly do you have to show for your purchase?
Some artists appeal to collectors by offering NFTs based on physical art and shipping the original to the buyer, even if some NFT purists argue that this loses sight of the true value of NFTs. In an exciting twist, other sellers have destroyed the physical goods on which the NFTs are based. A Banksy print is among the casualties. Some want to make sure NFTs stay valuable, while others destroy art to criticize NFT culture as meaningless. Either way, the physical art is gone forever.
Issues with owning digital art aren’t the only reasons some people complain about NFT culture, either. With the most expensive NFT ever going for just under $92 million back in December, it’s easy to criticize a system that some people imagined could democratize art ownership. After all, if you need thousands or millions of dollars to invest in a single NFT, it’s not all that accessible, is it? Only those with expendable cash stand a chance of owning hot NFTs.
Luckily, not all NFTs are expensive. But it’s hard to paint a full picture because the market changes quickly. At one point, NFT cost just under $400 on average. It’s also been over $6,000. More buzz means higher prices.
This is both how cryptocurrencies such as Bitcoin, which are also based on the blockchain, and traditional investments such as stocks work. Speculation affects the traditional art market, too. So if you’re wondering what is an NFT stock worth? The answer all depends on speculation. This week it might be thousands, next week nada.
Still, NFTs allow artists to interact directly with buyers. There’s no need for a go-between, and you won’t pay commissions when purchasing an NFT from the artist.
You might think this appeals to smaller artists, but some big names are paying attention. Most notably, rapper and entrepreneur Snoop Dogg purchased Death Row Records. He plans to return the label to its former glory and recently announced it would become the world’s first NFT music label. While it’s not clear how an NFT label will work, it’s a good sign that NFTs are here to stay.
For those who haven’t been paying attention, Snoop Dogg is not new to NFTs. He’s been collecting tokens for months under the name Cozomo de’ Medici. His portfolio includes over 250 NFTs worth around $17 million at one point. Snoop isn’t just content to collect, either. He released his own NFT collection with original tracks, collaborated to create the Nyan Dogg NFT, and more recently minted an NFT that sold for almost $750,000.
No matter where you stand on the issue, the NFT fad is, at the very least, an interesting social experiment. If NFTs can stand the test of time, they may become an accepted form of art collection. After all, everything from race to money only has value because we agree on it. NFTs can be the same.