by Chloe Sun ’24
Published May 8th, 2021
On March 11th, 2021, Mike Winkelmann, better known as Beeple, sold an NFT for 69.3 million dollars in an auction at Christie’s, the third-highest price ever achieved by an artist. This purchase, which shocked both the art and cryptocurrency communities, has since signaled a boom in the relevance of NFTs upon both markets.
NFTs, or non-fungible tokens, are files incorporated within blockchains that give buyers verified ownership over certain assets, often digital ones such as videos, audio files, and images. Being “non-fungible,” each NFT is unique and irreplaceable, allowing artists to monetize, sell, and authenticate their digital goods with more ease.
The owner of an NFT has limited control over the actual artwork itself; anyone can technically download a copy of the piece online. However, only the NFT buyer would own verifications to the original artwork. For this reason, many collectors are still willing to spend millions on NFTs simply for the right to say something is the verifiably real deal.
The NFT market has escalated in astonishing amounts since January 2021 with a market cap increase of approximately 1,785% in just three months.
There was visible growth in NFT platforms such as Opensea and Rarible, with the former’s monthly sales going from 8 million in January to nearly 150 million by the end of March. Ethereum, a blockchain frequently used for NFTs, has particularly benefited from this NFT boom, surpassing $3,000 in its cryptocurrency, ether, in early May. It is currently the second-largest cryptocurrency behind Bitcoin.
Besides the growth in cryptocurrency, NFTs have also brought new opportunities for digital creators. The NFT market provides artists with a consistent way to sell their digital goods. It also allows the original artist to gain a percentage of sales every time the NFT is involved, adding to its potential benefits.
Nevertheless, the future of NFTs remains uncertain. Some argue that the current craze for NFTs may prove to be a fleeting enthusiasm, and the concept would become increasingly irrelevant over time. Concerns regarding the greenhouse emission caused by blockchain technology have also been raised, with researchers estimating an average of 200 kg of carbon released for each NFT created.
As of now, the NFT market has dropped in value since its peak in March, although many platforms’ current income is still substantially greater than they were in January. OpenSea, for instance, has since dropped in monthly sales, going from nearly $150 million in March to $93.6 million in April. Overall, a general decline and stabilization can be observed regarding the current state of NFTs.