Zeros and ones sold for 69 million
Yes, you heard right. A so-called NFT was sold for 69 million USD. You might wanna know why on god’s earth somebody would pay that much for something that doesn’t exist but is only stored somewhere on a blockchain. If you ask me I would say… I don’t know.
But first of all what are NFTs? You can skip this part if your nickname is Blockchain-Brad or you simply don’t care about the hottest technology. But if you want to understand this whole article you might want to read this part (voluntarily, of course). NFTs are non-fungible-tokens. Non-fungible means they are unique and can’t be replaced with anything. The Mona Lisa for example would make a decent NFT. Of course only if Leonardo Da Vinci would have been born in 1970 and would trade his paintbrushes for a Mac. Okay no, let’s forget I just wrote that.
Anyways, those unique tokens can’t be swapped like money: If you swap one 10 Dollar bill for two 5 dollar bills you would still have 10 Dollars, but if you swap the Mona Lisa for an exact copy of the painting it would never have the same value. You see what I mean. The problem that NFTs are trying to solve is that every 5-year-old is capable of duplicating digital files endlessly and therefore making it hard for digital artists and others to achieve the same as Da Vinci in an analog form with their digital art. Every form of art could be “tokenised” with the use of NFTs to create a digital certificate of ownership that can be sold and bought.
The only problem is that everyone has access to this process and could potentially create their own NFT and sell it via various marketplaces that popped up throughout the last few years. That lead to many wannabe Crypto Chads that are trying to find someone dumb enough to buy an NFT from them for way too much money. Honestly, that sucks. During my dives through the NFT sea I stumbled across a lot of those NFTs, for example this one created by “cacophony” on the NFT marketplace of Bakery Swap:
It’s simply a dot with a transparent background and the creator thinks it’s worth 1,420,069 BUSD… Yeah, right. Okay, to be fair compared to modern artwork these days this could be called “art”, but why would someone pay this amount for one png file?
Another example that’s a bit different from the first one is “Everydays: The First 5000 Days” by the US-American digital artist called “Beeple”. In 2007 he started to upload a photo of himself every day on Tumblr and made a collage out of all 5000 photos and sold that as an NFT. For 69 million. Wait, what? Why on earth would somebody pay that much money for one file? I could ask this question a thousand more times and still wouldn’t find an adequate answer, because most art NFTs have individual value to the ones buying them. We all agree that something is of value and therefore it has value, even if this value is assigned to the object from only one individual on this planet. That’s where the magic of value creation happens. If we keep that in mind, it might make it easier to understand why someone would pay 69 million USD for an NFT: Maybe because that person is so fascinated by Beeple and his art that the emotional value of the NFT is way higher than the actual price from the buyer’s perspective.
So what do we learn from that? In general, the price of an asset is set by the ones who are willing to buy it. Simple as that. If you have the right audience as a comedian, for example, they will laugh at every single one of your jokes. In the end, NFTs are not an asset for appreciation but for storing emotional value.
