For starters – a group we’ve belonged to until recently – NFTs, or non-exchangeable tokens, refer to portions of digital content associated with the blockchain, the digital ledger system that supports cryptocurrencies like Bitcoin and Ethereum (ETH). While these cryptocurrencies are fungible, which means you can trade one Bitcoin (or, in the world of IRL, one dollar) for another identical currency, every NFT is unique. NFT can take many different forms, such as virtual trading cards, other holdings, tweets, and even physical objects.
And on the evening of March 4, we became the last to click to buy a digital piece of art – art at very, very affordable prices, lest our corporate accounts get confiscated. In the process, we have joined not only the growing list of buyers and sellers in this thriving marketplace but also a much smaller community of co-owners of this particular piece of art. New digital family.
The perfect piece of digital art
He said, “They approved of me, so I officially became an artist.”
Since every blockchain transaction is logged permanently and publicly, NFTs provide a way to assign value to objects online, giving artists like Shelupinin more control over what they produce and how much they can get from selling it.
“There is a real coincidence between technology and the problems in those industries,” said Tal Ilyashev, founder and managing partner of SpiCE VC, a venture capital firm that invests in blockchain startups.
NFTs now also benefit from the “cool factor,” giving the average internet user a different way to access cryptocurrencies. “Crypto is really … kind of old, so there’s something fairly new associated that we can participate in,” said Ilyashev. “A lot of celebrity factors play into this, too.”
However, there is at least one major hitch: the system is still notoriously complicated for the average buyer, as evidenced by the process of purchasing the hairless cat image.
First, we had to transfer $ 20 worth of Ethereum from Coinbase to a cryptocurrency exchange to a wallet app called Rainbow, then link Rainbow to Known Origin. Then we had to send in the $ 15 Ethereum we needed to buy Shelupinin artworks.
But getting the NFT on the spot would cost us “gas” of up to 100 Gwei – a small unit of Ethereum – which would equal about $ 52. So, since we are cheap and not in a hurry, we have chosen to only pay 5 Gwei, but as a result, we have been waiting more than a week and have already spent an additional 10 bucks. However, we still do not officially own “Little Alien”.
“The cryptocurrency world has made a big mistake, an evolutionary mistake … the entire user interface is very difficult and it’s built into the existence of cryptocurrencies,” said Ilyashev. “I think we’ll wait a little while before we see a simpler, more transparent user interface.”
But he believes the buying experience will improve over time. NFT platforms like Known Origin and OpenSea look more like traditional online shopping, with artwork displayed in a grid and a “Buy Now” or “Bidder” button next to it.
Others say that the enormous popularity of NFTs, despite their complexity, is a testament to their staying power.
“Yes, it’s a barrier,” he said. “I don’t think anyone disagrees with that.” Pet3rpan also said he previously worked as a graphic designer and sold 15 of his NFT pieces on Known Origin for around 2 ETH. “But one of the reasons NFTs really exploded in the beginning was because most of the designers … are themselves very technical.”
Pet3rpan is also one of 15 other owners of the “Little Alien” artwork that we have purchased, a scenario possible as it is a virtual rather than physical piece. Known Asset, like all blockchain-based platforms, lists all of the owners of each piece, along with details of when they were purchased and how much they paid.
Pet3rpan initially did not recall buying a hairless cat photo, saying he captures NFT art casually when something catches his eye.
He said, “To me it was always like we appreciated someone’s work.” Occasionally he will buy the NFT expecting the value to go up and he can resell it at a higher price. “But I don’t buy much for investments. In most cases, most of the artwork that I own is because I want to appreciate someone’s work and say ‘Hey, cool stuff, I’m a fan’ and buy it.”
We tried reaching some of the other cat owners, but not receiving responses from them. More than half of them bought the item over a year ago, and the last purchase was two days ago.
Are NFTs here to stay?
But there is also a fundamental question for the digital art community: Will NFT end up becoming a passing fad? Ilyashev and others in the industry argue that they are here to stay.
“It’s a very important technology for a range of industries, and it will make a very big difference,” said Ilyashev. “I think it is very real and I think it has a lot of staying power.”
“[That] Increasing the amount of money in the Ethereum ecosystem should be “stopped” somewhere and NFT is the perfect place for that. “He also encouraged him that Ethereum developers continue to improve the cryptocurrency to make it more user-friendly.
“In such circumstances, it is technically impossible for the size of the NFT market to shrink, and it could only increase,” added Shilobinin.
It remains to be seen whether the hairless cat is a collectible that appreciates its value over time or just a memento of a strange and forgotten internet trend. At the moment, we all love her the same.