NFTs took off last year with people paying large amounts of money to own them. For example, Jack Dorsey’s first tweet – “just setting up my twttr” – sold last year for $2.9m.
Non-fungible tokens are unique files which are blockchain-linked and can contain, well, almost anything. Because they are digital, copies can exist, of course, but only the NFT version(s) will have guaranteed and verified ownership.
Everyone is aware of the distinction between the original and a copy: owning an original piece of canvas on which the artist has actually applied paint compared to owning a copy or a print of that same artwork. The same logic applies to NFTs. Everyone can see Jack Dorsey’s first tweet from 2006 as it’s still on Twitter after all. But only one person “owns” it. The buyer Sina Estavi received a certificate, digitally signed and verified by Mr Dorsey, as well as the metadata of the original tweet.
Mr Estavi is currently trying to sell the NFT tweet. He has promised to pass 50% of the proceeds above $25m to charity but he is struggling to get much more than 1% of what he paid for it. Have we already seen the NFT boom turn to bust? Have people decided that owning NFTs is like owning worthless snake oil?
Apparently not. Last month, a pair of 24 x 24 CryptoPunk pixel portraits of aliens wearing little hats sold for around $7.5m each. And relatively unknown artist Beeple recently sold a digital collage at auction for $69m. These prices fall short of physical artwork of course. The most expensive painting sold is Da Vinci’s Salvator Mundi. In 2017, Saudi Arabian businessman and government minister of culture, Prince Badr bin Abdullah paid $450m for it (estimated to be the equivalent of $500m today).
But maybe NFT buyers have become more circumspect. Less likely to pay for something that has short-lived novelty value or kudos. More likely to put their money into something that they believe will hold its value.
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