NFT Hype – How a hype is supposed to change the art world

A plot of land for 300,000 euros, a work of art for 70 million dollars or a cat for 2,000 euros, prices like this are quite common these days and don’t even cause the head to shake. However, it gets interesting, or crazy, as critics say, when these sums are paid for objects that do not exist in reality, but only exist virtually. These digital assets, also known as NFTs, are currently skyrocketing and nobody can say how it will turn out.

Anyone who wants to invest, earn or invest money can buy land, real estate, works of art, rare items, stocks or, more recently, cryptocurrency. Creative minds came up with the idea of ​​combining all these investments in the digital world and thus created the so-called NFTs. These “non-fungible tokens” are unique cryptographic (value) tokens which, unlike fungible tokens such as bitcoins, are not exchangeable. The tokens are therefore unique and cannot be replicated or destroyed. They exist in the digital world, are signed via the blockchain and can therefore be clearly assigned to an owner.

Put simply, these products are images, music, videos and other multimedia products. These are created by the author and connected to the blockchain for a fee. In general, a blockchain is a type of database made up of blocks. These are strung together like pearls on a chain. Each block contains the actual data that is to be stored in it and, on the other hand, a unique hash value that ensures that the data content is unchanged. In addition to its own hash value, each block on the chain knows the hash value of the previous block. And so the blockchain authenticates itself in a kind of chain reaction. With an NFT, this unique value is now taken and thus clearly identifies an owner. The areas of application are almost endless: postage stamps, trading cards, pictures, animations, music, but also virtual properties.

A new record

A few days ago, the artist Beeple, real name Mike Winkelmann, achieved almost $ 70 million for his digital collage “Everydays – The First 5000 Days” at an auction at Christie’s in London around 42,330 ethers, another cryptocurrency, were transferred). The work of art, which does not exist in physical form, consists of 5,000 individual images that were created daily over a period of more than thirteen years. With these record proceeds, Beeple is now, after David Hockney and Jeff Koons, the third most expensive living artist in the world. Fans of the NFTs are jubilant and speak of an unbelievably great opportunity for artists and completely new possibilities. The authors can use the blockchain to ensure that they receive a share of the sum with every further sale.

Critics, however, complain that this auction makes it very clear how the bubble of these crypto works of art works. The picture was bought by a digital art collector and fund operator who operates under the pseudonym MetaKovan. According to the first reports, it should be the crypto entrepreneur Vignesh Sundaresan. This in turn started the B.20 fund, which now bundles the Beeple works of art (he has already bought some) with virtual real estate – yes, there is also that – and is itself an object of speculation. Investors have been able to buy B20 tokens since February. The artist Beeple is also said to already own around 2 percent of B.20, MetaKovan / Sundaresan holds the majority with 59 percent. Even if MetaKovan / Sundaresan, according to their own statements, wants to create the “first public art project of the Metaverse” with B.20 and sees the fund as an opportunity to redefine the experience and ownership of art, it also ensures the value of the but is purely fictional. If the bubble bursts, everything is gone and nothing more than small pictures in the global data network.

However, Nate Hart, who has been active in the market since the invention of NFTs in 2017, warns of a speculative bubble. “It’s hard to predict when it will peak.” According to Andrew Steinwold, who launched an NFT mutual fund in January, the majority of these digital proofs of ownership will eventually become worthless. But the concept itself has a future. “We spend a lot of our time online.” Corresponding property rights are only logical. “The volume will one day reach trillions of dollars,” Steinwold predicts.

The US basketball league NBA is considered a pioneer in the field of NFTs. On their Internet site Top Shots, fans can buy and trade highlights of games. After five months, 100,000 users had a trading volume of nearly $ 250 million. In the largest single transaction to date, a user paid $ 208,000 on February 22 for a clip of a “slam dunk” by basketball star LeBron James. And the US football player Rob Gronkowski recently became the first individual athlete to present his NFT trading cards.

The importance of good storytelling in the virtual asset world can be seen in MetaKovan’s statement posted through Christie’s: “When you think of high quality NFTs, this one is going to be pretty hard to beat. And here it is Reason – it represents 13 years of everyday work. Techniques are reproducible and dexterity is beatable, but the only thing you can’t hack digitally is time. This is the crown jewel, the most precious work of art for this generation. It’s worth $ 1 billion. “

No blockchain hype without Tesla boss Elon Musk. So it is not surprising that he has announced the sale of a techno song. “I’m selling this song on NFTs as an NFT,” Musk wrote on Twitter, accompanied by a video of the song. Musk’s partner, Canadian singer Grimes, recently auctioned music video clips on NFT for $ 6 million.

The so-called CryptoPunks are also sold at the same price. Small pixel art works that all share a head shape, but always have different attributes. The so-called CryptoKitties have been available for a long time. Kittens that can be crossed and thus make new creatures again. The most expensive virtual kitten is called Dragon and can be purchased for around 600 ethers, just under 400,000 dollars. In the long term, a good price – after all, there are no scratched sofas and no housing or feed costs.