Non-fungible tokens (NFT), being sold for a fortune on crypt ..
I’m not a fan of musician Grimes. So I probably wouldn’t pay $400,000 (around Rs 2.9 crore) for a 50-second clip she’s recently released online – even if I had that kind of money. But somebody, er, just did. For the uninitiated, Grimes, equally well-known as Elon Musk’s girlfriend, recently dropped a set of songs on the internet which were sold, within 20 minutes, for $5.8 million. For those looking to own a slice of social media history, Twitter CEO Jack Dorsey is selling his first-ever tweet (from 2006) – which simply says “just setting up my twittr” – and the bid for it has already touched $2.5 million.
The big news was not just the amount, but also the fact that they were NFT, or non-fungible token art – digital creations that were sold using cryptocurrency on the Ethereum blockchain (Ethereum, like Bitcoin, is a cryptocurrency). These mega-buck sales have suddenly turned the spotlight on NFT. An article on the website of US venture capital firm Andreesen Horowitz says that in the last month, NFT sales have touched $300 million [see table].
What is NFT?
It could be a piece of music, an artwork, a photo, a book, a game, GIFs, a bit of writing – pretty much anything that you can post in the digital space. You can tag it as an NFT and sell it on a blockchain. The ‘crypto work’, when sold, becomes a ‘crypto-collectible’— much in the way that one can own a painting or copyrighted music.
Non-fungible also means that you can’t exchange it for anything of equal value. While a bitcoin can be exchanged for another, or a Rs 100 note can be exchanged for two Rs 50 notes, a non-fungible token is unique – there is nothing of a comparative value. And it is currently fetching creators millions of dollars.
Artist Beeple’s work Crossroad, which features a former US president lying face down in a field, went for $6.6 million, making it the most expensive digital art ever sold. Another work by Beeple (aka Mike Winkelmann), a digital collage called Everydays, is currently on auction by Christie’s, with a ticket price of $3.5 million. Musician Justin Blau, who goes by his trade name 3LAU, recently sold 33 NFTs from his hit album Ultraviolet, for a record $11.6 million – the highest-ever garnered for an NFT collection. The American rock band, Kings of Leon, is planning to release its next album as an NFT. An NFT (in this case, a video clip) of basketball star LeBron James’ winning dunk for his team, the LA Lakers, was sold for over $200,000. The National Basketball Association in the US has made $230 million selling NFTs of match highlights under the category ‘Top Shot’. While anyone can view such clips, it gives the buyer the bragging rights of actually owning it. It’s like having a screensaver that you have created yourself: Others may want it, and copy it, but only you actually ‘own’ it.
Are Indians in on the NFT game?
Yes. Chennai-based digital artist Siraj Hassan has sold many of his 3D and animation pieces through digital marketplaces like OpenSea. According to reports, digital artist Amrit Pal Singh recently sold his ‘toy face’ NFTs of celebrities like Frieda Kahlo, Vincent van Gogh and Daft Punk for 22 Ether (or upwards of Rs 20 lakh). EDM artist Nucleya is apparently planning to produce NFTs of some of his music.
How do you own an NFT?
Digital ownership is the basis of NFTs. “Until today, whenever you listened to music or viewed an image, it was always a copy – a copy that you owned and had a right to use, but the original always belonged to someone else,” says Nischal Shetty, of crypto bourse WazirX. “With NFT, you can actually own a unique piece of work.” The contact between buyer and seller can happen directly, without a middleman, like an auction house in case of artworks, for instance. And the ownership is easily verifiable, since every crypto transaction has a digital ‘ledger’. So a non-fungible token carries details about who created the work and whom it was sold to (or even how many times it has changed hands).
PUBLISHED BY– timesofindia