How did an artist named Beeple sell one at Christie's for $69 million?

A digital collage of hundreds of strange, brightly colored photographs created by a South Carolina artist Beeple sold for $69.3 million at Christie's auction on Thursday. It is the third highest ever paid for a work by a living artist. The only works ever auctioned so high were the art by Jeff Koons and David Hockney.

This particular file is an NFT, or non-fungible token, sets it apart. NFTs, are based on the same principles as crypto currencies like bitcoin, enables people to assert ownership of unique digital files, such as songs, videos, or still photos. Beeple, whose real name is Mike Winkelmann, is the recent beneficiary to rush into NFTs, which is a byproduct of the rapidly rising interest in digital currencies and the technology.

Q: What is an NFT?

NFT is a type of digital asset. They identify a specific a version of any digital file, an album, video game, or a simple picture. People can "mint" NFTs using the same technology as bitcoin. It creates an ownership record that is distributed across thousands of computers throughout the world. It cannot be modified by anyone but the owner. It's a method of transforming a digital file into a physical item that can be exchanged. NFTs are not tangible.You cannot hold or touch them, unless one decides to print a copy of it. The knowledge of having the original file, in custody of the owner makes it valuable. NFTs are exchanged in digital market places. They are individually unique assets unlike bitcoin.

Q: Why are people interested?

In 2017, Dapper Labs, a Canadian company, launched CryptoKitties, a game in which players exchange. Top venture capital companies like Andreessen Horowitz have invested in CryptoKitties, and a handful has been sold for more than $100,000.

Dramatic increase in bitcoin prices caught attention of millions of people igniting a surge of interest in things in a blockchain. A single bitcoin’s value rose upto about $7,000. In the beginning of 2020, it hiked up to nearly $56,000. Apps like Coinbase, which make it easier for non-techies to buy the asset. Major institutional investors like Goldman Sachs and companies like Tesla, have hiked their prices higher and higher.

The NBA announced a partnership with Dapper Labs in October and began selling clips and photographs of famous basketball players as NFTs and earned $230 million towards end of February. Sale of replica of the popular Internet creature Nyan Cat has helped to set up stage for the auction of Beeple.

NFT’s popularity increases as more people join in. According to Joe Guagliardo, NFTs, value increases and decreases just like physical assets.

Q: What do you do with it?

Cherish it!! These assets have become something of an Internet status symbol, attracting a certain kind of tech celebrity. On a website, they are called Valuables. Twitter CEO Jack Dorsey is selling his first-ever tweet as an NFT.

Q: Is there a downside to it?

The amount of computing process involved in the blockchain, gives rise in environmental issues. in Washington Post reports in 2017 about bitcoin using 1 to 4 gigawatts of electricity, which is equivalent to three nuclear reactors.

Q: Is this just a speculative craze?

It’s hard to say. Huge amounts of money is being pumped into NFTs. They are part of the wider bull market and fresh and unique assets to invest in. Many argue that the interest in NFTs demonstrates their long-term importance. They simply assist artists who do not deal with physical materials to monitor the sale of their work, therefore making more money by resolving the issue of ownership of digital artworks.

Q: Is it necessary buy one?

Sure. I mean if you have enough cash for investment, then a little experiment in investment wouldn’t harm at all. Unlike any new trend, NFTs may turn into a staple of society in coming years or slowly just like a forgotten trend it can get lost in time.