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The appeal and value of non-fungible tokens

By Janice Lee, Nam Nguyen, and Larry Ye Apr. 28, 2021

Jessica Lin Art


“Everydays — The First 5000 Days,” by artist Mike Winkelmann, known as Beeple, is a collaged image file of 5,000 digital art pieces Winkelmann has posted since 2007. Selling for over $60 million at Christie’s, the piece became the most expensive non-fungible token (NFT) ever to be sold at auction.

NFTs are distinct goods that do not have interchangeable value. Like a social media handle or a unique trading card, it is one-of-a-kind, and thus cannot be replaced.

The digital piece of art is one of many NFTs emerging onto the growing market. NFTs are distinct goods that do not have interchangeable value. Like a social media handle or a unique trading card, it is one-of-a-kind, and thus cannot be replaced. However, to make a piece “non-fungible,” creators “mint” their digital asset through blockchain technology, which codifies the NFT and establishes several safeguards, including a verifiable record of price, ownership and prevention from forgery. Most NFTs operate on the Ethereum blockchain, which requires buys to have existing cryptocurrency accounts for various transactions.

NFTs have attracted Twitter founder Jack Dorsey, musician and artist Grimes and the National Basketball Association (NBA). Dorsey sold his first tweet for $2.9 million dollars in a charity auction supporting GiveDirectly’s Africa Response fund and Grimes sold pieces in her WarNymph digital art collection for $5.8 million dollars on NFT platform Nifty Gateway. The NBA’s new platform, NBA Top Shot, is currently in its beta phase and allows users to buy and open packs or participate in auctions to collect Moments, which are clips of memorable basketball plays ranging in rarity and monetary value.

“Non-fungible tokens are a good way for creators to store their works because it would prevent others from stealing their work by validating them through secure blockchains and present a sense of permanence to their creations,” Junior William Qiao said.

Despite its popularity, concern over the energy inefficiency of NFT transactions has been a concern to some artists and critics.

Despite its popularity, concern over the energy inefficiency of NFT transactions has been a concern to some artists and critics. Transactions made on the Ethereum blockchain are tremendously inefficient, with every single transaction using more power than a day’s worth of power from the typical American household. Thus, NFTs not only waste an enormous amount of resources and cause pollution, but also cause inefficient energy allocation. Additionally, various critics are skeptical about the longevity of NFT hype, viewing it as similar to the cryptocurrency boom of 2017, which then crashed soon after.

“I do not see the point of NFTs if their transactions are especially harmful to the environment. If people were really interested in helping small businesses, there are physical alternatives like Etsy that offer platforms for emerging creators to sell art without the physical toll of extensive caron pollution,” Senior Amy Li said.

However, others believe NFTs are here to stay. In an interview with CNBC, Matt Hall, co-founder of Larva Labs, a crypto-art company, said that with the increasing importance of our online lives and personas, NFTs will formalize digital ownership and become an integral part of the digital world. Donnie Dinch, CEO of Bitski, a digital store for buying and selling NFTs, told Vox in an interview that the NFT market will expand in the future. He believes that non-fungible tokens will make a broader impact on our lives and that people will increasingly want to express themselves in the digital world using these unique tokens.

NFTs have been branded as both accessible and available to anyone who wishes to create or exchange things in various decentralized online marketplaces, and likely will create a broader impact on the digital marketplace.

 

About the Contributors

Janice Lee

Staff Writer


Janice Lee, a senior, is a Staff Writer new to Journalism. Janice likes scouting in various gacha games, taking naps after-school, and reading visual novels.









Nam Nguyen

Feature World Editor


Nam Nguyen is a senior and is the editor for Feature World. He is a fervent plant enthusiast and enjoys watching indie movies in his free time because he thinks he's too cool for blockbuster films.









Larry Ye

Staff Writer


Lawrence Ye is a sophomore at Leland High School and a staff writer for the Leland Charger Account. He likes to swim and travel and loves his pets, Simon and Meatball.

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