Should we care about NFTs?

First, what are they?

If you follow cryptocurrencies, art or both—odds are you’ve been seeing “NFTs” all over the place. Non-fungible tokens (NFTs) are basically a digital certificate of authenticity, proving that you own a piece of digital art, stored in a digital wallet on the blockchain. Artworks are “minted” or tokenized, and then auctioned off, traded mostly for the cryptocurrency Ethereum. 

If that sounds incredibly complicated, that would be because it’s totally new and kind of revolutionary. It’s the first real way to buy and trade digital art outside of selling physical productions/reproductions of them. Of course, these digital works are still replicable. Like, I can just save a JPEG of whatever digital piece you just paid for, but you own the rights to display the token, and claim you own it, which is cool, I guess.

NFTs were making waves late last year, and earlier this year. controversial internet figure Logan Paul sold a series of Pokemon inspired artworks for a few million dollars following his foray into Pokemon Card collecting and unwrapping. Tons of money, right? 

But it gets crazier—Mike Winkelmann, better known as Beeple has made a name for himself by developing a piece of digital art every day (literally, every day) for nearly 14 years. He sold a series of his pieces as NFTs in December, netting $3.5 in a single weekend. Then, earlier this month he shook the art world up for the second time when Christie’s (yes, the esteemed auction house) auctioned a collage of Beeple’s…and sold for nearly $70 Million. You can hear from the artist himself, explaining NFTs with honesty when it comes to his thoughts on the matter.

Obviously, there’s some serious money to be made (or investments to make, if you’re on that side of things). But is it really a good thing? I guess that depends on whether you’re an artist, an investor, and if anyone keeps believing that this has any real value. It doesn’t make sense to a lot of people—including me. I understand the value of owning a physical piece of art, a one-of-a-kind painting that I could proudly hang in my house, but a jpeg? In my digital wallet? Of a @Jack tweet? (Yes—Jack Dorsey sold his 2006 “just setting up my twttr” tweet. For $2.9 MILLION.)

NFTs evolving and quickly expanding in definition—moving through the art world and morphing to include things like a patch of skin sold by a Croation tennis player for $5000. Strategist and founder Zoe Scaman, with the help of a london creative studio created a campaign called “NFT the DP,” a platform where women who have received unsolicited pictures of men’s nether regions can mint said photos to be sold as NFTs—the only way the original sender can prevent this, is to buy the NFT themselves. 

The world of NFTs seems to get crazier and more abstract by the day.

The Good and the Not-so-good

So, from an artist’s standpoint, this is pretty great. Art you were previously selling (and still could sell) prints of are now a piece you can tokenize, and sell the “original” to someone for a few thousand dollars. You get to keep the copyright, you can even earn a percentage of all future sales of the piece, depending on how you wrote up the deal. 

NFTs are new though, and new things are notorious for not working very well.  Most of the digital auction houses aren’t really vetting whether artwork being sold is actually the original artist, and some cool internet dudes™ are just saving other artists work, minting them, and profiting off of it. 

Also, I couldn’t really expect to whip up some photoshop doodles and expect to cash in on a couple thousand dollars. The only artists really profiting off of this are already well known ones, and art thieves. 

On the investor side of things, it could maybe be good? Who knows, maybe this is the new frontier of selling art. After all, there’s not a lot of contemporary artists making waves in a physical space like digital artists have been for the last decade or so. But like, it isn’t real. You’re trading a lot of money to tell people that you own something that I can just have saved to my iPhone’s camera roll. It might be hard to convince people in the future that any of these, without any physical manifestation are actually valuable. 

Sticking with the trend of new things not working well, the services running these auctions aren’t really the most secure either. Multiple happy investors have reported seeing their NFTs stolen, their big art buys traded from their account to some other guy’s wallet. There’s not a lot of regulation, and these blockchain protected trades don’t have an easy “undo” button, so a lot of them are just up a creek without a paddle, it seems. 

Then there’s the environmental stuff. If you hadn’t heard about NFTs due to interest in either crypto or art, you definitely heard it from this. Cryptocurrencies have to be “mined,” basically arrays of computers computing exchanges of currency in exchange for a tiny bit of the currency itself, and that takes up a lot of energy. For reference, in 2018, globally, Ethereum miners used the same amount of energy as the entire country of Iceland. So if you invested in some Ethereum, and you paid a couple for an artwork, you could have inadvertently expended two years of the amount of electricity it takes to run your house. This isn’t the artists fault so please, don’t get mad at them. Instead, get mad at cryptocurrencies for kinda sucking up all the electricity.

But why should we care about this stuff? 

Mostly because this could be the next Bitcoin. I hope not, but it might be. There’s so many big names playing the game, and so many substantial transactions have already been made. In so many ways, NFTs have already shifted the way we perceive the buying and selling of digital art—gone might be the days of buying your favorite artists prints on ArtStation or INPRNT. Beeple is working on ways to make your NFTs displayable, which will undoubtedly help get over the “I paid thousands for a JPEG” hump. 

But what will the future of NFTs be? Is this a bubble to be burst? Some smart artists turning a trend into short-term profits? Will Beeple’s landmark auction be the first of many high dollar auctions of digital art we’ll see? Perhaps its just a new-aged way of supporting your favorite digital artists that you’ve been following for a while.

Here’s what I think:

I think the bubble’s going to burst. Maybe I’ll look back at this in ten years and really hate myself for saying this, but I really don’t think these NFT investors will have an easy time convincing investors in the future that their image on a hard drive has any real value. 

That being said—I don’t think NFTs are going anywhere. People really like digital artists. I support a few by buying prints that I proudly hang around my home. If artists like Beeple keep pioneering new ways to enjoy purchasing digital art outside of paying for printed reproductions, I can see people wanting to continue supporting artists by doing so. 

In the meantime, I’m happy to see artists win out, after a year where creative industries were drastically impacted by the COVID-19 Pandemic. It isn’t easy putting food on the table as an artist, so I’m happy to see artists turning a profit while they can. But I’m gonna keep supporting them the way I always have: buying prints, retweeting and adding their posts to my Instagram stories. 

I really can’t be sure what the future holds for NFTs. But I think @limericking on twitter summed it up pretty well: