WTF is an NFT?
Brett Borthwick
The common laptop and social media user, may have recently heard of non-fungible tokens (NFTs) and have likely asked themselves, “what’s the point?” People have bid $200,000 for a video clip of a LeBron James Dunk or millions U.S. Dollars to purchase Jack Dorsey’s first tweet. Monetary value is being assigned to immaterial digital bragging rights. Put simply, NFTs represent a form of ownership forever itemized and publicly ledgered in the Ethereum (ETH) blockchain. The ETH foundation is what allows NFTs to be ‘real’ in a sense previously unknown to digital entities (Borthwick). Nic Carter, co-founder of Coin Metrics, writes, “...the NFT should be understood as the autograph, not the art…[they] are a cluster of superficially similar but functionally heterogeneous entities, in much the same way that ‘crypto asset’ or ‘blockchain’ are too semantically diffuse to be considered a single taxonomic element” (Carter). The vastly unique capabilities of NFTs means the extensive capacity of their reach has yet to be understood. Lately, DJs and artists have used NFTs to release snippets of music whose rights remain exclusive to the buyer. NBA TopShot, a DapperLabs NFT marketplace, allows basketball fans to collect their favorite ‘moments’ and profit when players’ significance increases in value.
When it comes to artistic applications, NFTs profit its creator differently in each transaction. Creator Mike Winkelmann, more commonly known by the pseudonym Beeple, set the record for the highest priced sale of digital artwork at $69.3 million through an online Christie’s auction in March (Reyburn). “Everydays: the First 5000 Days,” was minted, or created, on the blockchain in February and has since enthralled both the art and digital communities. If and when Beeple’s piece is auctioned again, he will receive monetary compensation from the transaction. Physical artists have never financially profited twice from a one piece. The potential repeated payments received from NFTs incentivize artists to shift from painting, drawing, sculpting, or creating in the physically tangible sense to minting.
In Web 1.0, at the outset of the internet, users simply consumed data generated by content creators. Web 2.0 allowed for design through the internet—centralization. Many have hypothesized what form Web 3.0 will take, but decentralization through blockchain technology has risen as the clear front runner. The new expectation of data sovereignty will empower, “...individuals to connect to an internet where they can own and be properly compensated for their time and data, eclipsing an exploitative and unjust web, where giant, centralized repositories are the only ones that own and profit from it” (Silver).
Data rights have presented themselves as one of the main issues Generation Z will face. In order to protect digital creations and proceed in an increasingly digitized world, people must stake their claim in their own media. NFTs and their applications lend themselves perfectly to the world’s transition to Web 3.0.
Works Cited
Borthwick, John. “Where are we, where are we going w/ dApps, DeFi & NFTs” Betaworks,
updated 19 March 2021.
Carter, Nic. “Why NFTs Are Hard To Explain.” Medium, 15 Mar. 2021,
https://medium.com/@nic__carter/why-nfts-are-hard-to-explain-48f0ab0a35bf.
“Non-Fungible Tokens (NFT) | Ethereum.Org.” Ethereum.Org, https://ethereum.org/en/nft/.
Accessed 23 Mar. 2021.
Reyburn, Scott. JPG File Sells for $69 Million, as ‘NFT Mania’ Gathers Pace. New York Times,
https://www.nytimes.com/2021/03/11/arts/design/nft-auction-christies-beeple.html.
Silver, Charles. What Is Web 3.0? Forbes, 6 Jan. 2020,
https://www.forbes.com/sites/forbestechcouncil/2020/01/06/what-is-web-3-0/?sh=483905
0058df.