NFTs and Digital Arts: We Got It All Wrong

 

     Hello guys, how are you doing? I know you are all good. So in this article, we will discuss extensively about NFTs. SO we have discussed about them in an earlier article but in this article, we will consider the impacts of NFTs in the metaverse and social community so stay tuned and enjoy this article.

      An NFT is a financial security consisting of digital data stored on a blockchain in form of a distributed ledger. The ownership is recorded in the Blockchain and can be transferred by the owner allowing NFTs to be sold and traded. NFTs do not require special skills to create. The value of an NFT is associated with the digital file it references. Proponents of NFTs claim to provide a public certificate of authenticity or proof of ownership but the legal rights of an NFT can be uncertain. NFTs function like cryptographic tokens but unlike cryptocurrencies, they are not fungible. The cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that tracks NFT ownership. Let's talk about how NFTs started.

     The first known NFT Quantum was created by Kevin McCoy and Anil Dash in May 2014. It was a video created by McCoy's wife Jennifer. It was registered on the Namecoin Blockchain and sold to Anil for $4 at a museum in New York City. Both parties referred to the technology as monetized graphics.

     In October 2015, the first NFT project, Etheria was launched at DEVCON 1(Etherum's first ever developer conference). It consisted of 457 purchasable hexagonal tiles. These tiles didn't sell for 5 years until now. As at then, each tile went for 1 ETH($0.43). But now there has been a buying frenzy in the space. All tiles sold within 24 hours for 1.4 million dollars.

     In 2017, an online game Crytpo Kitties was made profitable by selling tradable NFT cats and it sparked a lot of interest in NFTs. 

     In 2020, the NFT market experienced a lot of growth with its value tripling to $250 million. In the same year, a lot of brands were trademarked for NFTs

     In the first three months of 2021, about $200 million were spent on buying and selling NFTs.

      NFTs can range from photos, videos, music, GIF, in-game purchases, selfies and even a little tweet. NFTs have various purposes they serve. Here are some of them:

Digital Arts

This is one of the major uses of NFTs. High profile auctions of NFTs received considerable public attention. Examples are:

Merge created by an artist named Pak sold for 91.8 million US dollars.

Everyday: The First 5000 Days and Human One minted by an artist named Mike Winkelmann a.k.a Beeple sold  for a combined total of 98.2 million U.S dollars. The Everyday's is the first NFT art ever sold at auction and one of the top ten most expensive works of arts period.

Right Click and Save as a Guy was minted by an artist named XCOPY and sold to Snoop Dog for 7 million US dollars.

Stay Free was minted by Edward Snowden and it was sold to pleasrDAO for 6.4 million US dollars.

A video of the Coffin Dance which went viral during the early stages of the COVID-19 pandemic was minted by Benjamin Aidoo and sold to 3F MUSIC for 1.1 million dollars.

These are just a few of many other artworks that were a big hit last year.

Generative Arts

These type of arts are created with a set of computer programs. Popular NFT collections such as Bored Apes, Ether Rocks, Lazy Lions and Crypto Punks are examples of generative art where random images are generated by selection of major picture components in several combinations. Another example is Mars House, an architectural NFT created in May 2020 by artist Krista Kim and sold in 2021 for 288 Ether($524,557.79).

Utility 

NFTs serve different purposes in the Metaverse which we discussed in previous articles. The inaugural ceremony of the 2019 NFT.NYC ceremony witnessed NFT control access. The ticket were sold as NFTs on NFT markets. The conference allowed it's participants to participate in dinner along with the opportunity of displaying custom messages on Times Square Billboards. Just recently, BAYC sold virtual land  named Otherside to the general public on Opensea. Also in P2E( Play to Earn) games such as Pegaxus, Axie Infinity and many more, in-game items are sold as NFTs to users who play these games to use these items in the game.

Music

On February 28, 2021, electronic dance musician 3LAU sold a collection of 33NFTs for a total of 11.7 million US dollars to commemorate the three year anniversary of his Ultraviolet album. In that month alone, NFTs reportedly generated 25 million US dollars in the industry with artistes selling music as NFT tokens.

Film

In May 2018, 20th Century Fox partnered with Atom Tickets and released limited edition Deadpool 2 digital posters which were available on Opensea. In April 2021, an NFT associated with the score of the movie Triumph composed by Gregg Leonard was minted.

Memes

      A number of internet memes have been associated with NFTs which were minted and sold by their creators or subjects. These memes have also been linked with a number of coins e.g Shiba Inu and Dogecoin Examples are: Pepe the frog, Nyan Cat, Disaster Girl, Charlie bit my Finger. 

A Silent End

     Recently, there have been speculations about the credibility and non fungibility of NFTs. In May 2022, the Wall Street Journal reported that the NFT market was collapsing. Daily sales of NFT tokens had declined 92% from September 2021 and the number of active wallets fell 88% from November 2021. Generative arts such as Bored Apes, Lazy Lions e.t.c mentioned earlier are not the work of a passionate artist but the work of an individual or set of people who are just trying to cash in; a sad truth many have discovered. Financial experts may have been just about right in labelling NFTs as an economic bubble. Hillariously, Mike Winkelmann a.k.a Beeple, the brain behind the popular Everyday's labelled NFTs as an "irrational exuberance bubble". Art museums are convinced that NFTs have no lasting cultural relevance. Elon Musk, the world's richest man might have just plunged the NFT hype into its own pitfall in a single tweet back in May. 

Clearly after that, NFTs were in for the worst.

NFTs and the Greater Fool Theory

Bill Gates speaking on NFTs early last month compared it to the greater fool theory. At a climate conference organized by TechCrunch, he asserted that digital assets especially NFTs are 100% based on the greater fool theory. Here is the clip:

The greater fool theory refers to the idea that one can make money by investing in overvalued assets and selling them for profit because there is always someone out there(a greater fool) who will come along and pay a higher price for that asset. Bill made it clear that he was not in support of the crypto revolution and that he preferred investing in tangible assets with valuable output. So far, bitcoin has dipped below 20k dollars and is poised at a loss of more than 55% since the start of the year and 70% decline from its peak value of 69k dollars last year.

The Rebirth of NFTs

     As earlier discussed, the sales of NFTs plunged into monarch and chaos just last month. But quite recently, investors and owners of top hyped NFTs like Bored Apes and Crypto Punks have come together to see what they can do to recognize the previous hype surrounding NFTs. The prominent rap stars Eminem and Snoop Dog partnered to release a new music video titled "From the D2 the LBC" that showcases the Bored Ape Yatch Club(BAYC) and Mutant Ape Yatch Club(MAYC) owners. Both musicians own a Bored Ape which was purchase for six figures in dollars. This collaboration caused a 15% surge in the price of Ape token which was quite impressive. The NFT.NYC conference which was mentioned earlier was recently held as usual in New York last month. Attendees of the event were given an opportunity to reflect upon a week of artistic inspiration, community networking and developer innovation from within the non-fungible token(NFT) space. There was an event held at the conference which goes by the name "Digital Diaspora". The purpose of the event is to celebrate black culture and art and the voices of unheard artists in the NFT space. During this event, a variety of artworks produced by black artists were presented including those auctioned to support charities. Last month, Binance has made remarkable efforts to revive the hype around  NFTs by collaborating with superstar celebrities. Football's greatest superstar Christiano Ronaldo first partnered with BInance to be able to connect with his fans and bring more audience back into the non fungible arts market by creating digital collectibles of himself to be sold exclusively on Binance. Khaby Lamee who recently became the most followed creator on TikTok just above Charlie D'Amelio will also have digital collectibles of himself created and sold exclusively on Binance. I think this is a gigantic leap from the largest crypto exchange in the world. I believe as time rolls by, other startups will follow suit and will work hand in hand to rebuild the NFT revolution.

     So here are our final thoughts on the NFT and Digital Art revolution. Before all of this, there had been this common misconception that there is no money in arts. NFTs were meant to offer a permanent solution to that issue. They were meant to support a lot of passionate artists and revolutionize the world of arts. But somehow, we might have all misunderstood how NFTs  were suppose to work with the adventive of generative NFT arts. We are not saying it didn't completely fill that role, We heard of the sales of some top notch art works mentioned earlier like The Merge and The Everyday's. But the point is if NFTs are to surge to their original value as of early last year, there will need to be enough room for passionate and struggling artists in the space. That way, we can finally say "Digital Art is Here to Stay".

     I hope you all enjoyed this article. If you did, leave a like and drop something in the comment section below. I will see you in the next one. Peace