“NFT,” or “non-fungible token,” is likely a term that many people have heard recently, especially with the recent rise of technological trends and markets. According to the Merriam-Webster dictionary, an NFT is “a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership (as of a specific digital asset and specific rights relating to it).” Essentially, an NFT is a unique file, commonly a piece of artwork, with only one copy. The owner of the NFT has all ownership to said file.
NFTs may not look special, but they can be worth thousands or even millions of dollars. One ETH, or Ethereum, the currency used to purchase NFTs, is worth around $1,625 (as of the time of this article).
What, then, is OpenSea? Numerous NFT marketplaces have become popular, with names such as Magic Eden, Rarible, and Nifty Gateway popping up during Google searches for “NFT market.” The most popular and diverse of these marketplaces remains OpenSea, a subject of much interest and criticism.
NFTs themselves are prone to controversy and issues. One of these problems is the idea of ownership. An NFT differs from a regular art file as NFTs are supposed to be unique and belong to one person only, whereas images on the Internet can be saved to almost all devices. However, NFTs are still files on the Internet, so downloading one to a computer or phone is abnormally simple.
NFTs have also been notorious for causing harm to the environment. Blockchain transactions, or the tracking of cryptocurrency exchanges, require high energy and cause frequent greenhouse gas emissions. Such emissions then destroy the climate and cause extreme weather changes among other issues. With the increasing popularity of the climate movement, environmental activists, companies seeking to improve their reputation as one that cares for the environment, and others concerned with climate-related issues speak out against NFTs and the effect that they have.
What has been OpenSea’s and NFTs’ impact on the art industry?
So far, NFTs have fostered new art communities across the globe. One such company, the Bored Ape Yacht Club, has been particularly successful at fostering a group of high-class individuals. According to Morgan Stanley, “The Bored Ape Yacht Club [BAYC], a collection of NFTs of cartoon apes that was launched by startup Yuga Labs in 2021, has made a splash in the worlds of art and business, raising millions and counting celebrities among its fans. The ‘Club’ allows members to access exclusive chat rooms and offers ‘airdropped’ (new NFTs sent directly to a user’s wallet).”
BAYC NFTs have been purchased by multiple celebrities and are currently the most expensive NFTs on the market. There is no question that owning a BAYC NFT is a sign of wealth and privilege.
But should you get one?
Are NFTs really worth buying?
At first, one may expect NFTs to appear out of the ordinary for their extravagant prices. However, most NFTs don’t look incredibly special; in fact, some pieces of art are so simple that they don’t seem to be worth much money at all. Still, there are often high offers on the OpenSea market. Why is that?
Furthermore, art can be commissioned—paying an artist for artwork of a specific character or scene in an offered or customized size. A headshot/bust like the one shown above could cost around $30–$70 on average, around 300 times less than the price on OpenSea.
The answer to the question “Why purchase NFTs?” comes down to a couple of factors: one, the idea of ownership, and two, profit. As mentioned before, NFTs are unique to one person, and theoretically only one copy should exist. Therefore, owning an NFT essentially states that you uniquely hold all rights to that piece of artwork or that GIF. Some NFTs may look like utter nonsense, but the idea of being the sole owner of that nonsense is what appeals to a section of NFT buyers.
However, the majority of NFT buyers are hoping to make money. People invest in NFTs because cryptocurrency could potentially pay off and have extremely high returns, with the included risk of losing a big sum if the investment fails.
Overall, the desire to purchase an NFT stems from personal reasons, and NFTs are not a necessity. In reality, people are driven by trends and pressure to “fit in,” and NFTs and cryptocurrency have become a definitive identifier of luxury and higher class.
So to answer the question, “Is it worth buying an NFT,” the answer is no, unless you are particularly passionate about a certain piece and feel the need to acquire it for yourself. NFTs are at best an accessory and at worst a pricey art piece that could be worth much less elsewhere.
Ultimately, NFTs have been an interesting addition to both the art and investing schemes, and there will certainly be further development in technological fields concerning cryptocurrency and the idea of NFT exchanges. What direction these fascinating files will go remains to be seen.
