I don't claim to understand non-fungible tokens (NFTs). At all. Or art. Still, I was quite intrigued (and taken aback) by the headline in the NYT this morning that a JPEG/ JPG file by the artist Mike Winkelmann sold for $69.3 million!!! Yes, sixty...nine...million. Titled "Everyday--The First 5000 Days" the digital piece is a collage of all the pictures the artist (aka Beeple) has been posting online each day since 2007. Here's a shot of the world's most expensive JPEG (click to enlarge):
As per the NYT, bidding for the piece started at $100 and then "with seconds remaining the work was set to sell for less than $30 million, but a last-minute cascade of bids prompted a two-minute extension of the auction and pushed the final price over $60 million." Note, "the realized price," which includes fees, was $69.3 million, according to Christie's (quite the commission).
So, what exactly are NFTs and why is it suddenly exploding? This ZeroHedge post explains that NFT is "an attempt at re-wiring the financial attributes that connect to media and digital objects. I don't know what that means. Thankfully there's an analogy. In simpler terms: the Mona Lisa is original and valuable. A poster of the Mona Lisa, while offering the same visual information is not. Similarly, a repoduction of the Mona Lisa, even if perfect stroke-for-stroke, is not valuable either, because "it is not the original." So what we can say is that "art is valuable not for its collection of particular atoms in some particular order, but for its historical and social context. Recreating the object does nothing...With digital NTFs, the same logic is true...Owning an original token means you own its particular history and community."
So, that's a fair explanation. Having the original recording of the first words spoken by Alexander Graham Bell and Thomas Watson through the world's the first telephone would be a wonderful piece of history with rich layers of emotions. And I can see how if something that monumental were to be tokenized it would surely be worth a lot. But a collage? Yes...art is in the eye of the beholder and has to be contextualized, but paying millions for effectively someone's Instagram collection?
Even Beeple was shocked. His tweet below will naturally be tokenized and sold as well.
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