Exploring the Absurdity of NFT Art: A Deep Dive into Value
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Chapter 1: Understanding NFTs
What exactly are NFTs? My journey toward grasping this concept began with the realization that they often defy logic.
"I still don't get it," I sighed, my hands covering my face as a patient friend attempted once more to clarify NFTs for me.
Beeple made headlines recently with a staggering $69 million sale for a digital artwork that many, including myself, simply saved with a right-click. It felt as if I had wandered into a surreal world where people accepted that someone forked over such a vast sum merely for bragging rights.
Before we delve into NFT art, let's backtrack a bit: What is an NFT?
NFT stands for Non-Fungible Token, which is still a bit perplexing.
"A good is considered fungible if it is identical and interchangeable—like paper money, where we can easily swap dollars since we agree they hold the same value. Conversely, a non-fungible item is unique." — Faisal Khan, simplifying my confusion just a tad.
A tangible non-fungible item would be something like the Mona Lisa. There’s only one of her; you can’t trade her for another 'token' of equal worth because any other token, while it may have a similar monetary value, lacks the same cultural or historical significance. The data embedded in the painting renders it distinctive.
Traditional currencies, whether fiat or cryptocurrency, are fungible. Their values may fluctuate in relation to one another over time, but at any given moment, they can be exchanged at equal worth.
"Bitcoin [...] demonstrated that decentralized digital currencies could function effectively, addressing various issues. It enabled secure, transparent, and verifiable transactions through its public, distributed ledger (the blockchain)." — from a brilliant piece by Decentraland.
Digital currencies can be transferred from one wallet to another without the need for a central authority, such as a bank, highlighting their decentralized nature. A distributed ledger operates similarly to a transaction log book—everyone has a copy rather than it being controlled by a single entity.
If you’re still with me, that’s great.
It’s completely fine if you feel a bit lost; that’s part of the point I’m making: this system is no longer straightforward.
Money isn't exactly 'real' either.
Consider this: when was the last time you received a tangible paycheck? It’s likely been a long time, if you ever did. Nowadays, cash is rarely used, especially since the pandemic. On payday, numbers appear on my screen; they decrease as my rent is deducted.
At the store, I simply wave my phone over a scanner, it beeps, and my numbers decrease (while theirs increase). I leave with items because the cashier sees a number on their register turn green.
Money is indeed real in that its value exists and can be exchanged for goods, but it functions merely as a symbol of that value, reliant on collective agreement. It’s akin to a grand act of magical thinking, and the more you ponder it, the stranger it becomes.
Placeholders of Value
Cryptocurrencies and NFTs, like other currencies, serve as representations or placeholders of value. Therefore, when we evaluate NFT art, we need to shift our perspective from traditional art collection. NFT art isn’t sought after for its aesthetic or artistic worth but rather for its financial potential.
My earlier remark about Beeple's artwork being purchased purely for bragging rights holds some truth. The buyer owns a piece of paper stating, "I possess this $69 million asset," which holds value because it can be resold. Someone else may wish to possess that piece of paper and all the attention it brings.
It’s all nonsense
Ultimately, this is my conclusion: it’s nonsensical. And therein lies its brilliance. The figures associated with conventional currencies like £GBP or $USD are merely symbolic, so why not elevate them to an even more abstract level?
The bizarre realm of NFT art represents the next logical progression in our increasingly abstract value system.
Chapter 2: The Art of NFTs
This video, titled "Selling Your Art as NFT Explained," provides insights into the complexities of monetizing digital art through NFTs, breaking down the process and implications.
In the second video, "When an NFT Turns into a NTF – WTF...? Anyway, This is About ART!" we explore the intriguing and often perplexing world of NFT art, diving into its cultural significance and market dynamics.