Art has been the ultimate source of inspiration for many people throughout history. In the age of cryptocurrencies and the digitized world, trends are changing faster than ever before. For years, numerous artists have tried stepping onto fast-moving playgrounds and grabbing a piece of cake, but now their time has really come.
The NFT fever quickly hit the industry, turning digital artists and popular meme creators into rich celebrities. It’s hard to tell when this euphoria will run out of breath, but before the hype train stops, we are sure to see more market records and exciting experiments in this area.
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From pennies to a fortune
The market capitalization of non-fungible tokens (NFTs) shows rapid developments that have increased almost tenfold between 2018 and 2020. The way from niche forums to the oldest auction houses was incredibly fast. Christie’s recognized the trend in advance and started one successful NFT sale after another. Various works of art and collectibles have spawned six-digit price tags – and more. The latest groundbreaking world record resulted in artist Mike Winkelmann, also known as Beeple, paying over $ 69 million for a JPEG file. Could this have been predicted a few decades ago?
The globally recognized auction house plans to put nine rare CryptoPunks NTFs up for auction on May 11th for an upcoming sale. “For the first time, 5,184 pixels from a revolutionary NFT project are being auctioned in a traditional auction house. Exclaimed the auction house. The estimated total sales price is between $ 7 million and $ 9 million, but it can turn out to be much higher as one of these tokens was sold for $ 7.5 million back in March.
CryptoPunks is a prime example of the current boom in the NFT market. The project was initiated by Matt Hall and John Watkinson, founders of New York-based software company Larva Labs, when they created 10,000 images of people in 24 x 24 pixels. It’s hard to believe that the founders of the project distributed these NFTs to members of the crypto community for free. Half a year later, the cost has risen to several thousand dollars, and today these collectibles are already selling for millions. What is driving people to buy unconventional digital pixel art for the price of a garage full of luxury cars? The hype is caused by the increasing role of cryptocurrencies worldwide and the fact that these limited editions are still some of the first collectibles in the crypto market.
Tatiana Stiskina, art historian and art consultant, explained the motifs:
“I decided to buy a CryptoPunk even before Christie announced the sale on May 11th. So my husband and I bought it on the day Christie announced the sale. CryptoPunks is an even deeper symbol not just for Cryptoart, but also for the tech industry as they are generated using an algorithm. It’s the algorithms that are adored by the people who have given us everything to do with hi-tech and DeFi.
Unravel the story behind the popularity of NFT
What makes NFT articles so desirable and special? Blockchain is the breakthrough technology that changes almost everything that it touches. The ownership record cannot be forged, and NFTs cannot be copied and pasted. Thanks to the distributed ledger technology, such tokens are not reproducible and cannot be replaced as they only have one owner at a time. Because of their interchangeable properties and fungibility, NFTs are liquid and can be bought or sold in Ethereum-based markets, although they are labeled “non-fungible”.
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CryptoPunks are some of the first NFTs introduced on the Ethereum blockchain in 2017. These tokens use the ERC-721 protocol standard, which means that they are unique and cannot be replaced by another, which is why they are not fungible.
Why are some tokens worth pennies while some are worth tens of thousands of dollars and others are still worth millions? The award is judged based on rarity analyzes of specific attributes that are respected by crypto art and the community. While CryptoPunks have pioneered, there are other examples that can dwarf their success. Like any other extremely lucrative opportunity, this field is overflowing with sharks who are currently keen to capitalize on defrauding consumers and collectors. When you consider that the total value of NFT transactions quadrupled over the past year to $ 250 million, this trend doesn’t surprise anyone.
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A look into the future
There are no estimates of how long the anchor of NFTs will continue to appeal to high net worth investors. Some suggest the bubble burst faster than the initial fever of the coin offering has passed. Right now, maybe a fresh outlook combined with a decent taste can make a difference and change things. A new ship must arrive at the NFT’s blockchain port that could promise such changes.
Last week the crypto community was crazy about a new NFT collector project – the Bored Ape Yacht Club, a collection of 10,000 Bored Ape NFTs living on the Ethereum blockchain – unique digital collectibles that were sold out in the primary market. This is an exciting project that tries to incorporate gamification and community elements and it will be interesting to see what comes next.
The Ksoids project, which debuted as an NFT project on April 22nd, rose to first place on the OpenSea charts shortly after a few days. Over 900 of the total of 1,000 are sold out, so that some are still available at auction. Ksoids are algorithmically unique creatures whose breath of fresh air and creativity at its best did not go unnoticed by enthusiasts, collectors, fans and investors of digital art and declared them a real indie project. Ksoids are the first generative art of 3D characters that not only create their own world, but also help protect ours. 20% of every sale is donated to Orangutan Outreach, a non-profit organization dedicated to protecting orangutans in their home country.
Larva Labs’ latest NFT collection has been the talk of the crypto community for the past few days – the public sale was over within hours. The meebits, 20,000 unique 3D voxel characters, are created by a custom generative algorithm registered on the Ethereum blockchain. Larva Labs grossed a staggering $ 72,976,613 in its public sale, according to Dune Analytics.
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Behind the boom in digital collectibles
In a highly speculative market, each new record becomes less impressive than the previous one. There will always be people willing to pay staggering amounts of money for experimental ideas just to be curious or to stand out from the crowd.
Some high profile investors are looking at NFTs as a way to diversify their crypto portfolios and create new types of elite clubs, and most new entrants are hoping that digital art will cost a fortune at some point in the future. The only thing that is obvious is that the market continues to mature and make progress and that professionals step in and set benchmark quality examples.
The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Alexandra Luzan is a Ph.D. Student researching the relationship between new technologies and art at Ca’Foscari University in Venice. Alexandra has been organizing technology conferences and other events in Europe dedicated to blockchain technology and artificial intelligence for about a decade. She is equally interested in the relationship between blockchain technology and art.