NFTs: like every digital trend, here is another one inspired by physical counterparts (read: bidding) but adopted a whole other meaning because of its absurdity.
“A creation isn’t art until you put a price tag on it.”
What comes to mind when you think of art? ‘The Starry Night’ by Vincent Van Gogh or pop art influenced by Pulp Fiction? In 2021, fluidity has permeated everything: including what is considered art. It is no longer restricted to what art used to be: figures and tones.
Even a video clip of LeBron James dunking could be considered art. And be sold for $208k; one of the most lucrative sales in NBA Top Shot’s history. Not just this, digital creators can earn $6.6 million by selling a ten-second video clip of their art.
Like every digital trend, here is another one inspired by physical counterparts (read: bidding) but adopted a whole other meaning because of its absurdity. But peeling away the layer of judgement (because we get enough from our family), what is this new form of creating virtual art and acquiring it using cryptocurrency? How viable is it, how does it work, who’s doing it but before getting ahead of ourselves, what is it called?
Non-fungible tokens are a raging phenomenon right now. Anything can be qualified as a non-fungible asset if by definition, it is rare. It is not easy to really find an alternative that would promise equal value. And it isn’t cash. For example, there is really not a way you could find another official clip of LeBron James posterizing Nemanja Bjelica. But it holds immense value, last checked worth $208k. So, this video clip becomes sort of a currency: sort of because it is just a token of a virtual currency.
If that was incredibly confusing…
An NFT simply is proof that you own a one-of-a-kind digital creation. It isn’t the artwork itself.
For example, in the physical realm, let’s say you purchase a vintage car. You give out the cash, get the car in addition to a document that stands as physical proof that you own this. Ownership in the digital realm works in the same format. Slightly tricky, but mostly the same.
How do you mint tokens?
Now, let’s look at this from the perspective of a creator and not a customer. Let’s say you are a digital creator and you have just created a sort of irreplaceable and mind-blowing artwork: it could be an actual figurine, video, bobblehead, virtual land. Now, you want to put it up for sale online. The first step you want to take is assign a specific piece of code that IDs your work on a digital ledger. And then, they are put up for bid on digital platforms where collectors will pay for these artworks using cryptocurrency like Ethereum. You, as a creator, can use platforms like OpenSea, Rarible, Nifty Gateway and SuperRare to create your NFT art and sell it.
Is NFT > Physical counterparts?
There are two reasons why collecting digital art is preferred over physical art: a) it’s young and backed with a database which makes tracing its ownership history easy and b) the blockchain technology used for storing this information makes it impossible for digital work to be forged. Not just this, but also the scarcity and global appeal really adds a finishing touch for this accelerating trend.
Why the recent hype?
In 2020, the NFT sector has tripled in size to $250+ million and the biggest player to thank for this development is the blessed pandemic. Pandemic made us embrace virtual space; something that was often met with prejudice before this. Quite possibly all the interaction we had with the outside world was through virtual means which made it easier for us to understand that this isn’t some rabbit hole we are getting sucked into. It is safe if you know the product really well. This also led to people really thawing towards the concept of cryptocurrency and bitcoin specifically because decentralization, for the first time, unanimously did not seem like an anarchistic concept.
Our economic instability had some pros afterall and embracing non-fungible goods was just one of them. When a country is hit by a recession, people take out their bigger guns like during the Great Depression, rare coins saw a spike in costs…
…which makes it the best time for brands to use this
Brands can do two things with crypto: be iconic or have iconic.
Scarcity always has remained to be the essence of memorable marketing strategies: from the plain-old sales to Clubhouse’s launch. Add in a dash of influencer and you have the perfect recipe for a crypto marketing strategy. Brand artwork and digital collectibles can be tied to influencers relevant to the concept and create value for the brand till the lifetime of the digital asset (which basically is a pretty long time).
If not this, then pull a NBA Top Shot and store iconic moments in history. If there is anything 2020 has taught us, it is that the power of reminiscence is underestimated.