Kyle Craven sold the digital image of his yearbook photo as an NFT for $36,000 several years after it became a meme. People are buying NFTs of recorded farts. But what is an NFT and why are they worth your hard-earned money? NFTs, or non-fungible tokens, along with blockchain technology are actually the science behind the art of cryptomedia. Cryptomedia is about revaluing creative content by identifying an “original” work. If you’re interested in buying original digital media or creating original digital media, here’s what you need to know.
How Cryptomedia Works
The most common comparison made for cryptomedia is the “Mona Lisa.” It is a privately held work, owned by the French Republic and on display at the Louvre, but it’s also in the public domain, meaning you’re able to print it on a t-shirt or buy it on a mug. While the Louvre doesn’t make money on these additional uses of the image, it enhances the value of the original, enticing people to visit and see the artwork. In the same way, owning an NFT means you have the original, and depending on the popularity of what you buy, it could increase in value, just like the “Mona Lisa” (or not).
David Geithner MBA, with decades of experience in finance, explains that NFTs are “allowing artists to generate recurring revenue from their creations.” If you are an artist, maybe you share your work on social media. It generates likes and views, which in return generates income for the platform, not for you. With an NFT, you can actually sell your digital work. If copies of your work make it more popular, the seller can pass on your work to a new seller and you receive a cut of that resell as well. The more popular and more resale value your work acquires, the more you can make as the digital artist.
Geithner pointed out that smart sports teams and leagues are using NFTs as the digital equivalent of baseball cards. A team sells a clip of an up-and-comer hoping that his future career will increase the value of the NFT.
You’ll notice that a lot of the value of an NFT, just like for traditional art or collectibles is all about the perceived value of an item. While an original artwork or a clip of a future sports star might appreciate, that’s not the same across the board. Will that NFT from your favorite fast-food restaurant appreciate significantly? If you’re using NFTs as an investment it’s important to find the online market for the item. Search the many marketplaces dedicated to cryptomedia to see what’s hot.
On the other hand, if you just love owning that fart sound, maybe that’s enough. For many owners, it’s about flexing to other NFT owners.
Cryptomedia and NFTs aren’t for everyone. For traditional collectors, there’s a value in being able to hold an object. Modern investors, though, understand that when you can provide provenance for digital media, you have immediately created additional value, value some collectors will trade on.