What an amazing year it’s been for crypto investors. A year ago we were down in the dumps, and today we’re flying high.
One of the most remarkable recent phenomena has been the rise in popularity of non-fungible tokens (NFTs). NFTs are digital collectibles that are based on blockchain technology — each one is unique, indivisible and verifiable. Today, I’m specifically talking about art NFTs.
As you all probably know by now, artist Beeple recently sold an NFT piece of art for $69 million at auction via Christie’s. The New York Times headline bluntly stated “JPG File Sells for $69 Million, as ‘NFT Mania’ Gathers Pace.”
I’m normally not a huge fan of the Times. But in this case I think they got the essence of the story right. The “art” in question basically is just a huge JPG (digital image file). Anyone can download a copy. But the buyer has a special ownership token that gives them a sort of bragging right. A $69 million bragging right…
NFTs are being touted as the future of art. But I think that’s mostly due to the ongoing mania. Too many crypto owners with too much money to burn.
I think NFTs will have a place in the future of art. But I see them being much more useful as a complementary “certificate of authenticity” that should accompany a real, physical piece of art. I can never imagine spending a large amount of money on a token that represents ownership of a digital piece of art.
As you all know, I’m a huge proponent of crypto technology. It has the potential to change the world. But I’m just not sold on NFT art. Sure, there are some really neat ways NFTs can be used for digital assets — especially things like unique video game items. Having ownership recorded via NFT could make buying and selling digital assets a lot easier.
And there are countless other ways NFTs will undoubtedly be utilized in finance going forward. But I believe that most of these uses will be in representing real-world assets. Stocks, real estate, even (physical) art. I just don’t get the digital art craze. Maybe I’ll be proven wrong. But remember, the NFT digital collectible craze crashed back in 2018 (crypto kitties, etc).
I expect this round of NFT art mania will end similarly. So of course, I’m sticking with bitcoin and quality altcoins.