SINGAPORE – A Singapore-based entrepreneur caused a stir in March when he bought a digital collage for US$69 million (S$94 million) worth of cryptocurrency.
The record-smashing sale of Beeple’s Everydays: The First 5,000 Days at a Christie’s auction was the highest sum anyone had paid for a digital artwork. The buyer, collector Vignesh Sundaresan (known as “Metakovan” in the virtual world) paid in Ether, the world’s second-largest cryptocurrency.
The sale sparked particular interest because the work had been made, or “minted”, as a non- fungible token (NFT). The unique digital token offers proof of ownership, which is recorded on a digital ledger known as the blockchain. It is a digital asset and can be bought or sold.
This year, with the pandemic ongoing and cryptocurrency prices reaching new highs, there has been a lot of hype surrounding NFTs.
The Beeple sale was just one of several jaw- dropping sales.
In February, Nyan Cat – an animated flying cat meme – sold for almost US$600,000. Not long after, musician Grimes sold US$6 million of digital artworks minted as NFTs.
Weeks later, Twitter co-founder Jack Dorsey sold an NFT of his first tweet for US$2.9 million, while “Mars House”, a virtual NFT home by a Toronto-based artist, was snapped up for about US$500,000.
In the third quarter of this year, NFT sales soared to US$10.7 billion – more than eight times that of the previous quarter, according to data from market tracker DappRadar.
The NFT craze reached new heights this year, but these tokens have been around for a while. One of the earliest NFT projects, CryptoPunks – a collection of pixel art images generated algorithmically – was launched in 2017.
NFTs come with several advantages. They could help artists get royalties for secondary sales and benefit collectors of digital art who struggle with ownership rights.
Proponents also see them as the future of ownership – and something that might even transform the real estate, music, sports and gaming industries.
The minting of NFTs, however, requires a large amount of energy and has a significant environmental footprint Some sceptics also regard the frenzy around NFTs – a very high-risk asset class – as empty speculation and a bubble waiting to burst.
In Singapore, more artists have been making forays into the NFT space, for instance, by selling their NFT art on digital marketplaces like OpenSea.
NFT art has also featured in various exhibitions – ranging from a showcase during Crypto Art Week Asia in July to a dive into NFT art history at Fine Art Storage Services at Le Freeport in November.
The Blockchain Association Singapore and NTUC-U Care Fund even held an NFT charity auction in October.
Are NFTs a revolutionary force to be reckoned with or are they just a fad? Only time will tell, but for now, they are proving very hard to ignore.