The growth of the NFT marketplace is revealing humankind’s tendency towards accumulating exclusive items. Buyers are scrambling to pay phenomenal prices for digital art and other kinds of content whose ownership is authenticated by blockchain technology.
The digital art and the creative content industry are experiencing a kind of explosion that has never been seen before. Items that may have a significant time on the shelf or sold at discounted prices are quickly returning record-breaking sales.
In this edition of the VYSYN Release, we consider how some NFT-backed items have fared in terms of sales. We detail some of the reasons why these digital items appeal to buyers, and what they may represent for their new owners. This wave of interest in NFTs may be sparking a revolution when it comes to digital content production and sales.
Beeple’s $69.3 Million Sale
A new NFT record was set on Thursday, March 11th, when a piece of artwork by Beeple was sold for $69.3M by Christie’s auction house. The piece, “Everydays: The First 5000 Days” is a JPEG artwork by Mike Winklemann, the digital artist known as Beeple. According to the auction house, this value currently stands as the third-highest price for a piece of artwork by a living artist. The first two being works by Jeff Koons ($91 million) and David Hockney ($90 million) respectively.
This sale puts a mark of provenance and authentication on the originality and ownership of the particular work of art. This implies that, no matter how many times this piece of work is reproduced or viewed by others, actual rights of ownership reside with the buyer whose identity was not disclosed by Christie’s. The figure below is a representation of the Beeple artwork, with the details of the NFT contract.
NFTs Break New Ground
NFTs are hitting new horizons and securing their place as an eminent technology in the world of digital content. For the first time, an Academy Award nominee has released an NFT. The Oscar-nominated documentary, “Claude Lanzmann: Spectres of the Shoah” was a contender in 2016 for the award. Since then, the documentary was never made available to the public in any form.
The upcoming sale of Claude Lanzmann’s documentary would auction 10 initial copies of the movie for 72 hours. The event will begin on Monday, March 22, 2021, at 9 a.m. EST. This will be hosted on the digital collectible site, Rarible. According to the film’s producer and director, Adam Benzine, bidders during this auction will essentially be buying tokens that will describe the particular edition that the buyer owns, such as First Edition #1, First Edition #5, etc. The tokens will live on a permanent record on the blockchain.
The NFT technology is proving to be a value-unlocking innovation. Who could have imagined that a simple tweet would be valued at $2.5M? Twitter CEO, Jack Dorsey has auctioned his first-ever tweet, the proceeds of which he plans to convert and donate to charity. The highest bid for the tweet is already at $2.5M, and the auction will closes today on Sunday, March 21st.
The winner of the bid will be issued an autographed digital certificate which is signed using cryptography. The certificate will be verifiable on the blockchain, possessing every other quality of a digital certificate. This is according to an FAQ that is made available online by the NFT auction site, Valuables.
The Growing Interest and What it Means
Interest in NFT isn’t showing signs of slowing down yet. Data from Google reveals that the global search volume for the term “NFT” overtook the search for the term “DeFi” in the middle of February 2021 and never looked back.
(Source: Google Trends)
This trend is suggestive of a continued increase in adoption. Perhaps, the ability to unlock previously trapped value from digital content may be playing a huge role in the high level of adoption that is being observed in the space.
There are several incentives for purchasing NFTs. It can serve as a financial investment. It can hold sentimental value. It can also create a relationship between the collector and creator of items or between the buyer and their audience.
For instance, when Logan Paul ventured into rare Pokemon cards, this sparked a wave of interest in this space among his 23 million followers. The same applies to NFTs with the purchases of influencers sparking interest from their audience.
DeFi Integration Incoming
The tokenization process that turns digital content into NFTs bestows liquidity that was previously untapped. It allows digital artworks and other content to become easily tradable on a global marketplace.
This also exposes them to the various circumstances that are prevalent in the digital currency markets, including risks like property theft. Recently, some users on Nifty Gateway, an NFT marketplace, reported cases of theft.
Although a representative of Nifty insisted that such cases were probably due to account takeover, where users may have failed to protect their login details, other kinds of risks associated with similar marketplaces cannot be ruled out. NFTs are evolving into precious digital assets and should be secured extensively.
There are expectations that the NFT market will continue to expand. Integration with other digital asset ecosystems like DeFi may be nearby. Emerging projects like Cash Tech and Insured Finance are already working on such DeFi bridges.