Over the last period, you might have heard about crypto art and GIFs and videos sold for millions of dollars, but what is going on? Everything starts with NFTs or non-fungible tokens. They are used to register the ownership of a digital object on a blockchain. To put it simply, bitcoins are fungible tokens, if exchanged they have the same value, NFTs are non-fungible, therefore unique, therefore it is possible to prove their authenticity and ownership.
Since 2017, these tokens have been used within the CryptoKitties game. Based on the Ethereum blockchain, it’s a market that allows players to buy, collect, breed, and sell virtual cats. These can be purchased with ETH (Ethereum’s digital currency) and NFTs. Since a few months, this phenomenon has exploded, attracting global attention: from a simple LeBron James’ clip sold for $ 100,000 to the work of the digital artist Beeple, which was traded for $ 6,6 million.
However, NFTs are not just GIFs and graphics, but also a tweet, a drawing, a digital work. For example, the NBA has been selling limited edition videos since 2019, even Kings of Leon have released their latest album in an NFT version, with original digital artworks included. At this point, a question may arise. If I can download graphics or videos on my laptop, why do I have to pay for these NFTs? Because they are not simple files. Just like Art: everyone can have a copy of a Picasso, but the original is unique.
In a hyper-digitalized world where everyone is an artist/designer/architect, NFTs can be an interesting new market, with different targets and dynamics compared to E-commerce platforms. These tokens also have a feature that you can enable that will pay you a percentage every time the NFT is sold or changes hands. This is a new market and could lead to high returns. One of the problems is that this could be a speculative bubble, free digital files can now be converted into digital currency and there is a considerable and unjustified increase in prices. Probably only the market will have the last word.
In any case, the NFTs and crypto art universe is expanding: digital galleries already exist, such as Foundation, where the famous Nyan Cat GIF was sold at auction for 300 ETH, which, at the exchange rate, are worth € 460.000. At this point, whether you are an artist or a collector, you just have to try and dive into this new world. However, we would like to share one last thing: speaking of NFTs’ energy consumption and their ecological footprint, the situation is still catastrophic. To give you an example, when the French artist Joanie Lemercier sold 6 NFTs videos online for thousands of dollars (in about 10 seconds), he discovered that the cost in terms of energy consumption was equal to the consumption of his studio in two years.
A new interesting reality that, however, has to deal with the context in which it is located, not the network, but the infrastructure that supports it. You can explore this world but you should be aware that your online contribution will consume as much as the energy consumption of a European citizen in 3/4 years. To learn more about crypto art consumptions, visit CryptoArt.wtf and this article by Memo Atken, a computanional artist interested in the topic.
Nyan Cat Digital artwork, Grimes’ NFTs collection. Sold Digital artwork, Grimes’ NFTs collection. Sold