By: Chloe Ho; Staff Writer
The majority of us know NFTs as those one-of-a-kind tacky bored ape portraits that have circulated around the internet. They sell for all of this money just for people to screenshot, “Save Image As”, and mock them for being just beyond ridiculous. Perhaps a smaller bunch of us know a bit more about them – at least that it stands for “non-fungible token” and that they are reproduced forms of media sold online. But as far as I’m aware, I don’t think many people understand their purpose and their effects on the digital world. Are there any at all? What can it do for users? Is it the equivalent of Bitcoin? After some research, I intend to give a basic summary of what they are and what purpose they serve.
NFT stands for “non-fungible token” – a non-interchangeable token – that is sold online for people to bid money for ownership. If you look up some NFT marketplaces, you’ll find that there are tons of them out there in the forms of original content like art and reproduced images and videos. When you look at the sellers, there are usually a select few names that appear multiple times as you scroll. These are the names of huge blockchains that sell the content of users under the blockchain. More on that later. The big appeal is mainly for those selling media who would probably find less success anywhere else. People like artists and music producers can sell their works as NFTs and make a decent profit. This could do away with the “starving artists” status and give creative people a platform for opportunities.
During my research, I didn’t just see artistic pieces, however. There were Twitter screenshots, gifs that could be easily found anywhere, and other things that took no effort to put on the market. According to CNN, “Jack Dorsey’s first tweet sold for $2.9 million, a video clip of a LeBron James slam dunk sold for over $200,000 and a decade-old “Nyan Cat” GIF went for $600,000.” It’s beyond me as much as it is for (most of) you the appeal of such unoriginal items, but in the same CNN article, it states that “[It’s like] Pokémon cards, rare coins or a limited-edition pair of Jordans: NFTs create scarcity among otherwise infinitely available assets — and there’s even a certificate of authenticity to prove it.” I suppose one could call or compare it to something like digitally collecting things. People can take pictures of artworks on walls just as they can screenshot a picture on their screen, but nothing can beat owning it yourself. Because of that, these things are set at such high prices in order to validate their authenticity. It’s kind of like how an authentic Van Gogh painting can go for millions whereas a duplicate might be found somewhere in a furniture store.
With all of that now said, are they really worth investing in? I spent a good deal of time looking at them all, even almost considering selling some original NFTs of my own just to get the full experience. But one should not make impulsive decisions without considering both pros and cons. The Verge has written several articles on NFTs, including one titled “How to create an NFT – and why you may not want to”, where Mitchell Clark describes blockchains in more detail. “Every transaction [in the blockchain]… costs fees that are paid to the miners. These fees are called “gas”… Almost everything you do on the blockchain… will cost gas… paying gas does not 100 percent guarantee your transfer will go through… If something does happen and your transaction isn’t completed, you won’t get the gas fees you paid back.” That didn’t sound appealing to me, but to the huge number of people who do sell in these blockchains, it seems like an obstacle worth overcoming.
A big question posed by this would be “who the heck is buying these things?”. More importantly, why. According to CyberScrilla, “The type of people who buy NFTs are collectors, investors, flippers, fans, and folks all around the world. From celebrities… to your everyday working-class citizen.” As for reasons, it lists things such as investment opportunities, brand perks, exclusivity and utility. Some NFTs are sold by game companies to give buyers exclusive items, and others can allow you to invest in the company, allowing you to own a small share. That would be appealing to anyone. In addition, the rising trend of NFTs contributes to its appeal, which may explain why these well-off celebrities are getting in on buying and investing in NFTs.
The amount of money that sellers can earn from these NFTs is extremely alluring. Many of the top-selling ones seem to take no effort in creation, either. It seems almost too good to be true. In the future, I can see the platform becoming more stable and popular, but for the time being selling and buying is a rather risky investment to make. Some have found great success with the platform, but there are definitely a lot of things to take into consideration before starting. Money is not a game, so unless you have some financial stability, I think that there are a lot of other safer alternatives to consider instead that could be just as worthwhile.
