What is an NFT?
These days, you can’t sneeze without hitting an NFT, and the odds are, you’re actually genuinely annoyed to hear about them again. But what if they’re actually the miracle some people think they are?
What are they?
“Sultan Gustaf Al Ghozali, an Indonesian student, took a photo of himself every day for five years.
He sold his selfies as NFTs as a joke, and his collection has reached a trading volume of more than $1 million.
Ghozali has expressed confusion about why his selfies have become so popular.”
On the most basic level imaginable, NFTs are images + they exist on the blockchain network (meaning that to get them, you have to sign up to use crypto).
Creating an NFT is as easy as it gets, provided you can create art (and humans are born with the capability of creating art, all of us, so anyone can).
In order to make an NFT, you need to register at a website, create art, upload it, click on “free minting,” and your NFT is ready.
That disarming simplicity created a rather confusing slew of NFT sales that reached millions for rather prosaic content, raising questions about the meaning of NFTs and their value.
“Sales of nonfungible tokens jumped to more than $17 billion in 2021, according to a new report from NFT data company Nonfungible.com. The study, developed with BNP Paribas-owned research firm L’Atelier, said trading in NFTs hit $17.6 billion last year, reflecting an eye-watering 21,000% surge from 2020′s total of $82 million.”
This then led to everyone questioning the following: if NFTs aren’t backed by any type of value, then Bitcoin isn’t either, and neither is the US Dollar, and neither is art. All of those, unlike meat and potatoes, or cars, or DIY tools, are actually just cute nothings that only mean something as long as other people are willing to swap them for something. Wait…so then if crypto is a huge Ponzi scheme, so are the dollars, and so is art?
What’s the point of NFTs?
Anyone can create NFTs these days, which rather raises the question of what they’re worth - and what’s anything worth? If you can take an image, make an NFT out of it for free, and sell it for $500 000, what does “value” mean? And who defines what’s worth what?
NFTs may seem like a passing fad, but they’re far more complex than you might think
If Picasso’s paintings are worth millions, it’s because he studied at Real Academia de Bellas Artes de San Fernando and invested incredible amounts of time and effort into his paintings. These paintings are valuable because (ahem, you know) reasons. High aesthetics. Transcendence.
So how can someone take a selfie, upload it online, and sell it for millions?
If “value” isn’t about mastery and infrastructure of the art piece, maybe it’s about the name behind it? When Banksy’s paintings are sold anonymously for a handful of dollars on the street, no one gives them a passing look, but if they’re advertised as Banksy’s, they retail at incredible levels of worth. So does the name make art?
So if NFTs, like art and fiat currency, aren’t valuable in themselves, what are they for?!
We can thus arrive at a logical conclusion that up until a certain point in history, wealth was accumulated in the hands of the few ruling elites and those who produced the paintings and got paid millions and hundreds of millions. It’s entirely possible that the whole art scene was invented to keep money among the elites and keep them ruling society.
And then someone comes along and invents crypto. It doesn’t take long for it to rise and establish its sphere of influence, with hundreds of millions of users and the world’s largest companies like IBM and Google using it, and whole countries welcoming it with open arms.
Now, if you remember, the idea behind crypto was giving power back to the people by giving them a new type of Monet money no one could take away from them. They could mint themselves (until they got greedy and mining inequality started, making it a vertical of power, but that wasn’t the idea). Initially, the idea behind crypto was that it was supposed to be a democracy wherein anyone could access wealth and the opportunities it provides.
Today, thanks to mining centralization, crypto has an entry threshold. It’s beginning to look like classical banking: to get into the crypto world, you need a lot of money, either crypto itself or enough for mining equipment. Then you can mine, trade, stake, and so on, but crypto isn’t for just about anyone. So much for power to the masses! People without money are disadvantaged, which is what this system was designed to battle. Then it failed. It seems.
Until…the emergence of NFTs. Today, anyone can make art, upload it, completely free, and, with enough diligent application of effrot, get paid. Maybe not millions, but enough to pick up momentum and become successful in time.
Doesn’t that sound dreamy? Create one NFT a day, keep going, and there’s a very real chance you can make all your wildest dreams come true again.
Hoopla! It’s a democracy again.