What's this fuss about non-fungible tokens and why is everybody talking about them, we find out.
A JPG file has been auctioned for a whopping $69 million. Yes, you read it right! A bidder has shelled out more than $69 million (that is almost Rs 5,08,99,13,500 in INR) for a digital image file made by digital artist Mike Winkelmann, known as Beeple. The artwork, which was auctioned on Christie’s website, became the third-highest purchased artwork for a living artist, following Jeff Koons and David Hockney. It also broke several records, including the highest price for any lot in an online-only auction. The piece was sold as a purely digital NFT based work, the first one to be sold by a major auction house. Called ‘Everydays: The First 5000 Days’, the piece comprises the 5,000 pieces of digital artworks of the artist Beeple. But what is so special about the JPG file and what is NFT?
Everydays: The first 5000 Days
The artwork that broke several records began way back in 2007. Beeple shared his first digital artwork, of his uncle, to his Twitter account back in 2007, and continued to share one piece of his art everyday and called each individual artwork ‘Everyday’. In the beginning, his aim was to market his skills as a graphic designer, so that he would be recognised, which he did. He has created concert visuals for big artistes like Justin Bieber and One Direction. But amid all this, he continued to share one art piece a day, improving them by using better technology, playing with 3D technology and vivid colours.
An auction of digital artworks was not possible till recently when NFT and blockchain technologies caught up, which is why, even until recently digital artworks were not auctioned, at least not by major auction houses.
Beeple’s artworks over the years gained him 1.9 million followers on the microblogging site. Once he posted 5,000 artworks, over a span of 13 and a half years, he made a collage of them, called Everydays. This piece was listed on Christie’s website for online auction, thanks to the NFT technology, two weeks ago and over the duration of the auction, the highest bid was less than $30 million. However, at the last minute, more bids flooded in, and brought the artwork to record-breaking $69 million.
What is NFT?
NFTs are non-fungible tokens, and interest around this has been mushrooming for some time. Artists as well as collectors have been taken with NFTs. Non-fungible objects are those which have no standard value, like money does, and instead have a unique value. An old house or a vintage car, for example, would be non-fungible objects. When this is combined with the cryptocurrency-backing digital ledger platform called blockchain, the result is non-fungible tokens.
NFT is a digital authenticity certificate attached to any digital asset, be it art, music or video, confirming its ownership to the holder. A digital item’s ownership is confirmed by NFTs since it records these details on blockchain, which remains public and stored on computers across the internet. This makes these NFTs, or proofs of ownership, practically impossible to lose or destroy.
Several major tech stakeholders have expressed their belief in NFTs, one of them being Twitter co-founder and CEO Jack Dorsey, who recently posted his first tweet on the microblogging site for auction as an NFT.
NFT: The saviour for digital artwork?
Digital artwork has for long gone underappreciated, due to several reasons. For a long time now, downloading images and videos over the internet has been an easy task, with most users not even being aware of issues of copyright over digital assets.
The world has worked with tangible assets for a long time, and so people’s associations with the tangible products have been more than their association with the actual art. This means that while purchasing a movie, they associated the cost more to CD or the DVD than the actual film, and the same was the case for the music as well as news. This also explained initial resistance to pay for movies, news and music distributed online. The same has been the treatment for images as well. While original paintings have for long been status symbols, digital artwork has barely entered the category of art in the minds of people.
Amid this, technologies like NFT have come to the rescue of digital art, allowing digital artists to auction the ownership rights of their products just like physical paintings or artworks. And like what happened with Netflix, Amazon Prime Video and Prime Music with regard to digital content distribution, one can only hope that with time, due to NFT, people would begin to value digital artwork as well. And the auction of Beeple’s Everydays seems to be a good start for that trend.
While the auction of the JPG file has left many confused since the file can be downloaded over the internet, owning it and downloading it over the internet has about the same difference as owning an MF Hussain painting and owning a replica of the painting.