NFTs: For Better or For Worse?
Illustration's by Megan Le Brocq
With a revenue of a whopping $25 billion in 2021, the NFT market is not one to be ignored. NFT (Non-Fungible Token) was even named Collins Word of the Year 2021 and we enter the new year with both excitement and apprehension about what NFT has in store for us.
Simply put, a non-fungible token is a unique set of blockchains that records information such as ownership. The “first NFT ever minted” was in 2014, supposedly Kevin McCoy’s Quantum, which was sold by Sotheby’s in June 2021 for $1.4 million. But really, they became more widespread in 2017 with the game CryptoKitties, where users would buy a NFT in the form of their own unique cat which they could raise, or the art experiment CryptoPunks that tied each one of their 10,000 art pieces to a unique computer code on the Ethereum platform.
It’s not the easiest concept to grasp, especially for non-tech users. But you may be surprised to recognise this NFT yourself. 2 April 2011 was a historic moment when Christopher Torres posted the Nyan Cat gif onto his YouTube channel, the “pop-tart cat” that we all recognise. Ten years later, a unique version of Nyan Cat was sold on the Foundation auction for about $580,000.
Figure 1. Nyan Cat (Source: Giphy)
If NFTs were for niche art and sports card collectors in 2021, 2022 may very well be the year that it becomes mundane. Alex Salnikov, co-founder and head of product for Rarible, an online marketplace for buying and selling NFTs, reveals in an interview, “Mainstream adoption is on an upwards trajectory as we head into 2022 as we have already seen global organisations like Visa and Twitter release NFTs or purchase them as investment items, while Adidas has built their latest marketing campaign around the metaverse trend, which included partnering with NFT communities and figureheads. These brands are setting an example for organisations everywhere that are looking for new ways to connect with and engage loyal fan bases, providing that NFTs are an effective way to do so.”
This isn’t to say that NFTs don’t bring their own sets of problems. In the current climate where we are more conscious of climate change more than ever, the literal ‘gas’ fees that are involved in NFT transactions are seen with a critical eye. NFTs are traded in cryptocurrency Ethereum which keeps information like financial records or provenance secure, but it requires people to decode complex code using several large, industrial computers that end up using as much electricity as the entire country of Libya.
Although NFTS remain highly encrypted, they are not impossible to replicate, and many artists have been harmed by fakes circulating online. Due to copyright issues, South Korean auction organiser Wannabe International was forced to abruptly cancel a NFT artwork auction in mid 2021. Late 2021, Dan Howard’s works were auctioned as NFTs by an anonymous online account. He was only alerted when a fan asked him about the sales. Artists remain divided: are NFTs helpful or harmful?
The debate regarding the legitimacy of NFTs as artworks further fuelled by Wikipedia editors voting against classifying NFTs as art early this year, we enter 2022 still unsure about how they will adapt to fit into life as we know it. One thing’s for sure, whether we hate them or not, it looks like NFTs are here to stay.