Beeple (real name: Mike Winkelmann) is the name of someone who has made an NFT everyday for the last 5000 days. The work above is called "EVERYDAYS: THE FIRST 5000 DAYS", a collage of the first 5000 pieces. It was recently minted as an NFT, and sold at a Christie's auction for $69,346,250 on March 11th.
What are NFTs?
NFTs are non-fungible tokens. That doesn't really tell you anything. If something is non-fungible, that means it cannot be exchanged for something of equal value. One $100 bill is exchangeable for 2 $50 bills, or 5 $20 bills, and so on. Those are fungible. An NFT is one of a kind, and cannot be replaced.
The token part of the name is representative of a unit of currency on the blockchain. For an explanation on what the blockchain is, refer to our Spark on Bitcoin, linked below. In the case of an NFT, instead of the Bitcoin blockchain, it is the Ethereum blockchain, another type of cryptocurrency. Because they use the same blockchain as Ethereum, they use a lot of electricity per transaction.
So, we know what NFT means, but what is it? An NFT can be anything digital, a piece of art, a tweet, a file, an AI you made. As long as you created it (and it's digital), you can get it minted and sell it as an NFT. Think of them as one-of-a-kind trading cards. You have the only one in existence, and sure, anyone can get a fake, but yours is real and is worth much more than any fake.
The NFT to the left (or above, if on mobile) was created by Taco Bell. It is a GIF, with the tacos at the forefront being a pendulum. Only one frame is shown.
Why are they valuable?
Most NFTs are on the Ethereum blockchain. Ethereum (ticker: ETH) is just as much a cryptocurrency as bitcoin and dogecoin, but it's blockchain is designed to incorporate NFTs. Other cryptocurrencies also have done this, but Ethereum has the majority of NFTs by far. The NFTs are more complicated than any other ETH coin.
NFTs carry their value in their exclusivity. The reason an NFT is worth more than just saving the same thing to your desktop is for the same reason the Mona Lisa in the Louvre is worth more than any other copy; it's the original.
Many more people see them as an investment than a collectible, so it is more about momentum than the talent required to make the art. The prices rise with the price of Ethereum, and they rise even more if it is a piece that has been traded often. For example, this "Gucci Ghost" GIF (one frame pictured above) was sold for $3,600, but the person who bought it is asking for $16,300 (worth of ETH).
How do I buy them?
Because of the digital nature of NFTs, anybody can sell them fairly easily, unlike physical art, where lesser-known artists have a much harder time selling their work. They are typically sold in blockchain-based marketplaces, such as OpenSea.
However, that standard was broken on March 11th following Beeple's sale at Christie's, an auction house that has been open since 1766. They are known for selling the last piece of art by Leonardo da Vinci, Salvator Mundi, and the only known portrait of William Shakespeare during his lifetime.
There are many blockchain-based marketplaces. OpenSea, Super Rare, Foundation, and Nifty Gateway are all open markets. There are many more than just those. Anyone can buy or sell NFTs on them, but it must be in Ethereum.
This is another one of Beeple's works, titled "MIKE PENCE: LORD OF THE FLIES". It was released an hour after the 2020 Vice Presidential debate, when a fly landed on Former Vice President Pence's head.
What's the point?
If you're an artist, NFTs give you a cool way to sell your art, as long as it's digital. Not only are you paid in Ethereum, which you can either sell to get real dollars or hold for the chance of an increase in price, but you are paid an extra amount every time your work is traded again.
If you're a buyer, you can not only support smaller artists, but you also can use it as an investment. Selling it for more than you bought is a great way to make some quick cash. Or, you can keep it, giving you some rights to the NFT, allowing you to use it whenever you'd like, without anyone's permission. You also get some really nice bragging rights, especially for something like an original Beeple work.
You could also be an NFT collector, just like an art collector. Try to see how many NFTs you can buy, and maybe even sell your whole collection one day, assuming it gets big enough and has some great works.
Above is a video explaining NFTs. Like always, if you plan on buying (or investing, you could call it), do your research and think about it. Don't buy with money you don't have.