Why People Are Paying Millions for Digital Art Anyone Can View for Free Online
NFTs allow people to claim ownership of a unique and authentic piece of digital art. How much are they really worth?
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According to Oscar Wilde, a cynic is someone who knows the price of everything and the value of nothing, while a sentimentalist is someone who sees an absurd value in everything and doesn’t know the market price of any single thing. The sudden surge of cultural interest in non-fungible tokens (NFTs) has already sparked a battle between cynics and sentimentalists in the creative economy, and it’s playing out on the blockchain.
For the uninitiated, an NFT can be difficult to explain and appreciate. Non-fungible tokens are a type of crypto asset; they are not currency. While cryptocurrencies, like Bitcoin and Ether, are exchangeable or “fungible,” one NFT is not mutually interchangeable with another because each token is a unique digital asset. An NFT represents a particular (i.e. non-fungible) work, which could take the form of almost anything, like a work of art or a basketball clip. These tokens are held on various public blockchains, which provides proof of ownership and security for the holder of the digital asset.
The NFT ecosystem is still in its infancy. And yet, in a mere seven-day period, from February 18–25, Top Shot, the NBA’s platform to buy and trade NFT basketball highlight clips, generated sales of over $143 million. On Top Shot, each numbered NFT is known as a “moment” and takes the form of various player highlights. You either own that moment by holding the NFT, or you do not. There is no in between.
Top Shot went online in October 2020 and has become the most lucrative crypto collectible in the NFT marketplace. The NBA is not some esoteric universe of crypto nerds. It is decidedly mainstream and is now a proven new revenue stream for the league and its players while fans remain away during a global pandemic.
