Last March, NFT artwork released by the artist Mike Winkelmann, a.k.a. Beeple, was sold for $69M in an auction at Christie’s. It was a tipping point for the explosion and fever around NFTs, which has now found its way into fashion and luxury. Will that change the game, or is it too soon to speak?
First of all, NFTs are digital assets linked to a blockchain database, in a similar way to cryptocurrencies Bitcoin or Ethereum, for example. However, what sets them apart from the cryptocurrencies, is their uniqueness, and the quality of being irreplaceable or unexchangeable.
A cryptocurrency works the same way as traditional money, it is fungible, which means you can trade it for the same amount, number, or equivalent. When we deal with an NFT, that is not possible, due to its “one-of-a-kind” characteristic. The rareness and scarcity are positive qualities of an NFT as an intangible digital asset, however it can be bought and sold like art or other tangible objects.
NFTs can multiply and take the form of many digital artworks such as GIFs, tweets, images, video content, digital clothing, drawings, and animations, to name a few. As it only exists in digital spaces, we are not exactly buying the piece itself nor the copyright.
What Exactly Are We Buying in A NFT World?
As a digital item, shareable and storable by everyone on the Internet, the general public started to question the utility of buying something that individuals can download from their computers.
This is the tricky part, because what we are actually buying is the token value, such as the original serial code for that particular NFT piece. The acquisition is guaranteed by a digital certificate of ownership, so no matter if there are plenty of copies all over the Internet, that code proves its “original” source and provenance through blockchain.