{"id":4420,"date":"2022-10-04T14:10:21","date_gmt":"2022-10-04T14:10:21","guid":{"rendered":"https:\/\/kulaworldwide.com\/beta\/?p=4420"},"modified":"2022-10-04T16:28:31","modified_gmt":"2022-10-04T16:28:31","slug":"nfts-explained-i-have-questions-about-this-emerging-um-art-form-platform","status":"publish","type":"post","link":"https:\/\/kulaworldwide.com\/beta\/nfts-explained-i-have-questions-about-this-emerging-um-art-form-platform\/","title":{"rendered":"NFTs, explained I have questions about this emerging .. um .. art form? Platform?"},"content":{"rendered":"

ByMITCHELL CLARK<\/a> Jun 6, 2022 \u00a9 The Verge<\/a><\/p>\n

IMAGE<\/p>\n

Illustration by Mengxin Li \/ The Verge part of \/ The Year of the NFT<\/a><\/p>\n

There\u2019s nothing like an explosion of blockchain news to leave you thinking, \u201cUm\u2026 what\u2019s going on here?\u201d That\u2019s the feeling I\u2019ve experienced while reading about Grimes getting millions of dollars for NFTs<\/a> or about Nyan Cat being sold as one.<\/a><\/p>\n

In the year since NFTs exploded in popularity, the situation has only gotten more complicated. Pictures of apes have sold for tens of millions of dollars<\/a>, there\u2019s been an endless supply of headlines about million-dollar hacks<\/a> of NFT projects, and corporate cash grabs<\/a> have only gotten worse.<\/p>\n

All this news may have left you wondering: what is an NFT, anyhow? After countless hours of research and discussions (most of which were against my will), I think I know. I also think I\u2019m going to cry.<\/p>\n

Okay, let\u2019s start with the basics.<\/p>\n

What is an NFT? What does NFT stand for?<\/h4>\n

Non-fungible token.<\/p>\n

That doesn\u2019t make it any clearer.<\/h4>\n

Right, sorry. \u201cNon-fungible\u201d more or less means that it\u2019s unique and can\u2019t be replaced with something else. For example, a bitcoin is\u00a0fungible\u2014 trade one for another bitcoin, and you\u2019ll have exactly the same thing.<\/p>\n

A one-of-a-kind trading card, however, is\u00a0non-fungible. If you traded it for a different card, you\u2019d have something completely different. You gave up a Squirtle, and got a 1909 T206 Honus Wagner, which\u00a0StadiumTalk\u00a0calls \u201cthe Mona Lisa of baseball cards.\u201d<\/a> (I\u2019ll take their word for it.)<\/p>\n

How do NFTs work?<\/h4>\n

At a very high level, most NFTs are part of the Ethereum blockchain, though other blockchains have implemented their own version of NFTs. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also keeps track of who\u2019s holding and trading NFTs.<\/p>\n

How do you pronounce NFT?<\/h4>\n

Almost everyone spells it out, saying \u201cen eff tee.\u201d The brave\u00a0call them \u201cnefts.\u201d<\/a>\u00a0The enlightened have never had the word cross their lips.<\/p>\n

What\u2019s worth picking up at the NFT supermarket?<\/h4>\n

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.<\/p>\n

You mean, like, people buying my good tweets?<\/h4>\n

I don\u2019t think anyone can stop you, but that\u2019s not really what I meant. A lot of the conversation is about NFTs as\u00a0an evolution of fine art collecting, only with digital art. But yes, someone\u00a0could\u00a0buy your good tweets.\u00a0The founder of Twitter sold one for just under $3 million\u00a0shortly after we originally posted this article.<\/p>\n

Could you do a real quick rundown of what the blockchain\u00a0is?<\/h4>\n

Well, they\u2019re pretty complex, but the basic idea is that blockchains are a way to store data without having to trust any one company or entity to keep things secure and accurate. There are definitely nuances and exceptions there, which you can\u00a0read about in our blockchain explainer, but when most people say \u201cblockchain,\u201d that\u2019s the kind of tech they\u2019re talking about.<\/p>\n

There\u2019s also… a lot of nuance about whether NFT\u2019s are on the blockchain or not, which we\u2019ll dig into in a bit.<\/p>\n

Oooh, foreshadowing.
\nI know, I feel like a real writer.<\/p>\n

So do people really think this will be the future of collecting?<\/h4>\n

I\u2019m sure some people really hope so \u2014 like whoever paid almost $390,000 for a\u00a050-second video by Grimes\u00a0or the person who paid $6.6 million for\u00a0a video by Beeple. Actually, one of Beeple\u2019s pieces\u00a0was auctioned at Christie\u2019s, the famous\u2014<\/p>\n

IMAGE<\/p>\n

Sorry, I was busy right-clicking on that Beeple video and downloading the same file the person paid millions of dollars for.<\/p>\n

Wow, rude. But yeah, that\u2019s\u00a0the awkward bit. You can copy a digital file as many times as you want, including the art that\u2019s included with an NFT.<\/p>\n

But NFTs are designed to give you something that can\u2019t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork).<\/p>\n

To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original.<\/p>\n

No shade to Beeple, but the video isn\u2019t really a Monet.<\/p>\n

What do you think of\u00a0the $3,600 Gucci Ghost? Also, you didn\u2019t let me finish earlier. That image that Beeple was auctioning off at Christie\u2019s\u00a0ended up selling for $69 million, which, by the way,\u00a0is $15 million more than Monet\u2019s painting\u00a0Nymph\u00e9as\u00a0sold for\u00a0in 2014.<\/p>\n

IMAGE<\/p>\n

This last sold for $3,600, but the current owner is asking for $16,300.\u00a0GIF by Trevor Andrew Whoever got that Monet can actually appreciate it as a physical object. With digital art, a copy is literally as good as the original.<\/p>\n

But the\u00a0flex\u00a0of owning an original Beeple ..I think I remember hearing that NFTs\u00a0are already over. Didn\u2019t the\u00a0boom go bust? Like\u00a0for real this time?<\/p>\n

Sales have absolutely slumped since their peak, though like with seemingly everything in crypto there\u2019s always somebody declaring it over and done with right before a big spike. Am I predicting that NFTs are about to make a comeback? Absolutely not, but I\u2019m sure there are plenty of folks in NFT-based communities that are sure they\u2019re still on the gravy train.<\/p>\n

Oh no you\u2019re about to talk about the apes, aren\u2019t you?
\nSure am! If you haven\u2019t heard about the Bored Ape Yacht Club, it\u2019s one of the most successful NFT projects, with apes (which are procedurally generated and have unique characteristics) selling for millions of dollars.<\/p>\n

The company behind the series of NFTs has\u00a0created a spin-off cryptocurrency,\u00a0broken the blockchain\u00a0for a few hours with how popular one of their sales was, and even\u00a0acquired other massive NFT brands. And a reminder: this all happened because people really like saying that they own a picture of a Bored Ape.<\/p>\n

People like, for instance, Jimmy Fallon and Paris Hilton, who discussed their apes on TV in a clip that\u00a0went viral\u00a0for being\u00a0so uncomfortable.<\/p>\n

This kind of club isn\u2019t\u00a0really\u00a0a new phenomenon \u2014 people have\u00a0long built communities based on things they own, and now it\u2019s happening with NFTs. It could be argued that one of the earliest NFT projects, CryptoPunks,\u00a0got big thanks to its community.<\/p>\n

What\u2019s the point of NFTs?<\/h4>\n

That really depends on whether you\u2019re an artist or a buyer.<\/p>\n

I\u2019m an artist.<\/h4>\n

First off: I\u2019m proud of you. Way to go. You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the iMessage App Store? No way.<\/p>\n

Also, some NFT marketplaces have a feature where you can make sure you get paid a percentage every time\u00a0your NFT is sold or changes hands. That makes sure that if your work gets super popular and balloons in value, you\u2019ll see some of that benefit.<\/p>\n

I\u2019m a buyer.<\/h4>\n

One of the obvious benefits of buying art is it lets you financially support artists you like, and that\u2019s true with NFTs (which are way trendier than, like, Telegram stickers). Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.<\/p>\n

No, I meant I\u2019m a\u00a0collector.<\/h4>\n

Ah, okay, yes. NFTs can work\u00a0like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit. I feel kind of dirty for talking about that, though.<\/p>\n

So every NFT is unique?<\/h4>\n

In the boring, technical sense that every NFT is a unique token on the blockchain. But while it could be like a van Gogh, where there\u2019s only one definitive actual version, it could also be like a trading card, where there\u2019s 50 or hundreds of numbered copies of the same artwork.<\/p>\n

Who would pay hundreds of thousands of dollars for what basically amounts to a trading card?<\/h4>\n

Well, that\u2019s part of what makes NFTs so messy. Some people treat them like they\u2019re the future of fine art collecting (read: as a playground for the mega-rich), and some people treat them like Pok\u00e9mon cards (where they\u2019re accessible to normal people but also a playground for the mega-rich). Speaking of Pok\u00e9mon cards, Logan Paul sold some NFTs relating to a million-dollar box of the\u2014Please stop. I hate where this is going.<\/p>\n

IMAGE<\/p>\n

You\u2019ve activated my trap card (which sold for $17,000). Image by Logan Paul Yeah, he sold NFT video clips, which are just clips from a video you can watch on YouTube anytime you want, for up to $20,000. He also sold NFTs of a Logan Paul Pok\u00e9mon card.<\/p>\n

Who paid $20,000 for a video clip of Logan Paul?! A fool and their money are soon parted, I guess? It would be hilarious if Logan Paul decided to sell 50 more NFTs of the exact same video.<\/p>\n

Linkin Park\u2019s Mike Shinoda (who also sold some NFTs that included a song) actually talked about that. It\u2019s totally a thing someone could do if they were, in his words, \u201can opportunist crooked jerk.\u201d I\u2019m not saying that Logan Paul is that, just that you should be careful who you buy from.<\/p>\n

Are NFTs mainstream now? It depends on what you mean. If you\u2019re asking if, say, my mom owns one, the answer is no.<\/p>\n

The response from my mom when I asked her about owning NFTs. But we have seen big brands and celebrities like Marvel and Wayne Gretzky launch their own NFTs, which seem to be aimed at more traditional collectors, rather than crypto-enthusiasts. While I don\u2019t think I\u2019d call NFTs \u201cmainstream\u201d in the way that smartphones are mainstream, or Star Wars is mainstream, they do seem to have, at least to some extent, shown some staying power even outside of the cryptosphere.<\/p>\n

But what do The Youth think of them? Ah yes, excellent question. We here at The Verge have an interest in what the next generation is doing, and it certainly does seem like some of them have been experimenting with NFTs. An 18 year-old who goes by the name FEWOCiOUS says that his NFT drops have netted over $17 million\u2014though obviously most haven\u2019t had the same success.<\/p>\n

The New York Times talked to a few teens in the NFC space, and some said they used NFTs as a way to get used to working on a project with a team, or to just earn some spending money.<\/p>\n

Okay, but what does Keanu Reeves think of NFTs? He doesn\u2019t seem impressed.That moment would make a great NFT. Someone thought that too, and minted that clip as an NFT. It wasn\u2019t us though! Rampant copyright infringement is an ongoing problem in the space. One of the post popular NFT trading sites estimated that over 80 percent of the artwork minted using its free tool were \u201cplagiarized works, fake collections, and spam.\u201d Which is, you know, not a great look?<\/p>\n

Can I buy this article as an NFT? No, but technically anything digital could be sold as an NFT (including articles from Quartz and The New York Times, provided you have anywhere from $1,800 to $560,000). deadmau5 has sold digital animated stickers. William Shatner has sold Shatner-themed trading cards (one of which was apparently an X-ray of his teeth).<\/p>\n

IMAGE<\/p>\n

This one I like. Maybe not for $700, but… Image by deadmau5 and Mad Dog Jones Gross. Actually, could I buy someone\u2019s teeth as an NFT?<\/p>\n

There have been some attempts at connecting NFTs to real-world objects, often as a sort of verification method. Nike has patented a method to verify sneakers\u2019 authenticity using an NFT system, which it calls CryptoKicks. But so far, I haven\u2019t found any teeth, no. I\u2019m scared to look.<\/p>\n

Look? Where? There are several marketplaces that have popped up around NFTs, which allow people to buy and sell. These include OpenSea, Rarible, and Grimes\u2019 choice, Nifty Gateway, but there are plenty of others.<\/p>\n

I\u2019ve heard there were kittens involved. Tell me about the kittens. NFTs really became technically possible when the Ethereum blockchain added support for them as part of a new standard. Of course, one of the first uses was a game called CryptoKitties that allowed users to trade and sell virtual kittens. Thank you, internet. I love kittens.<\/p>\n

Not as much as the person who paid over $170,000 for one.<\/p>\n

IMAGE<\/p>\n

My face when I\u2019m worth $170K. Image: Cryptokitties.co<\/p>\n

Arrrrrggggg! Same. At one point I thought that the kittens would be used in games in a somewhat interesting way. That glimmer of hope has been decimated by the fact that almost every salesperson in the NFT space promises that their tokens will be part of a game or metaverse.<\/p>\n

When real game developers like Ubisoft and the studio behind STALKER have said they\u2019d integrate NFTs into their games… people reacted VERY negatively. The companies have either had to scrap their plans entirely or severely tone down the amount of blockchain stuff in their games.<\/p>\n

Of course, there have been a few fun experiments in the NFT space (though I\u2019ll admit that at least one of them was poking fun at the concept of NFTs), but… listen, one of the most successful NFT-based games is kind of a weird version of feudalism, and also got mega-hacked. So there\u2019s that. At least it\u2019s not digital pet rocks… right?<\/p>\n

In fact, there are people who spent tens or hundreds of thousands of dollars on NFT pet rocks (the website for which says that the rocks serve no purpose other than being tradable and limited).<\/p>\n

Can I cry on your shoulder? Only if I can cry on yours. Could I pull off a museum heist to steal NFTs?<\/p>\n

IMAGE<\/p>\n

This image is not an NFT. Yet. Image: Wallace and Gromit: The Wrong Trousers That depends. Part of the allure of blockchain is that it stores a record of each time a transaction takes place, making it harder to steal and flip than, say, a painting hanging in a museum.<\/p>\n

Or at least that\u2019s the theory. In reality, many, many people have gotten their NFTs stolen by attackers using a variety of tactics. To be clear, hackers aren\u2019t always playing 5D chess here. For the ever complicated hack of the programs that control the flow of crypto, there\u2019s a case where someone was tricked into signing a transaction they shouldn\u2019t have through run-of-the-mill phishing.<\/p>\n

Note: Please don\u2019t steal. Should I be worried about digital art being around in 500 years? Probably. Bit rot is a real thing: image quality deteriorates, file formats can\u2019t be opened anymore, websites go down, people forget the password to their wallets. But physical art in museums is also shockingly fragile.<\/p>\n

But wait, doesn\u2019t the fact that they\u2019re on the blockchain make them permanent? Okay, so this is a whole thing. Technically, yes: when you say NFT you\u2019re referring to an entry on the blockchain. However, the actual media, like the picture, GIF, or flagrant flaunting of copyright law is very rarely actually stored on the blockchain \u2014 it\u2019d be too expensive to do that.<\/p>\n

Sometimes the media the NFT points to is stored on a cloud service, which isn\u2019t exactly decentralized. Since this has come up as an issue, with people worried that their NFT proving they watched the Lions lose could go poof if one company goes under or changes their URL scheme, many in the NFT space have been turning to decentralized storage solutions like the InterPlanetary File System that use torrent-like technology. It\u2019s not bulletproof, but it\u2019s better than having your million-dollar JPG stored on Google Photos. Torrent-like?<\/p>\n

So people are pirating NFTs? No… Well, kinda, but hold that thought. The idea behind IPFS is that files are stored on a peer-to-peer network, meaning they could be stored on several computers at once. Files are given an identifier, and when a computer goes to load the file it asks the IPFS network to give it the file with that ID. Any of the computers storing it can say, \u201cOh, here it is!\u201d<\/p>\n

When you make an NFT, the content link is baked into the token. If that link goes to IPFS, it\u2019ll be pointing to something that\u2019s more permanent than, say, an image on a regular server. In theory, anyways. Of course, distributed does not equal perfect. Experts have warned that files could still end up on a single computer, and could be lost in the case of a hard drive crash.<\/p>\n

Okay, so what\u2019s that you said about pirating? So someone created this site called The NFT Bay as a sort of art project, where they put up a torrent pointing to a 19TB ZIP file, which they said included every NFT on the Ethereum and Solana blockchains. There\u2019s some doubt about whether was actually a treasure trove of NFTs (if such a thing could be referred to as \u201ctreasure\u201d), but in theory it\u2019s actually possible to scan the blockchain to find every record of an NFT being minted, and download the media it links to.<\/p>\n

Real or not, it was an incredible piece of performance art, sparking a conversation (okay, closer to a flame war) about the right-clicker mindset.<\/p>\n

Sorry, what on Earth is a right-clicker mindset? Ah, sorry. \u201cRight clicker\u201d is sort of a joking derisive term used by NFT boosters to deride people who just don\u2019t get it. The thought is that you\u2019re completely missing the point if you think that just downloading (or pirating) a JPEG will actually get you the valuable part of an NFT.<\/p>\n

Has anyone ever had their feelings hurt when someone tells them they have a right click mindset? Probably not, but their eyes may get a little sore from rolling so hard.<\/p>\n

I want to maximize my blockchain use. Can I buy NFTs with cryptocurrencies? Yes. Probably. A lot of the marketplaces accept Ethereum. But technically, anyone can sell an NFT, and they could ask for whatever currency they want.<\/p>\n

Will trading my Logan Paul NFTs contribute to global warming and melt Greenland? It\u2019s definitely something to look out for. Since NFTs use the same blockchain technology as some energy-hungry cryptocurrencies, they also end up using a lot of electricity. There are people working on mitigating this issue, but so far, most NFTs are still tied to cryptocurrencies that generate a lot of greenhouse gas emissions. There have been a few cases where artists have decided to not sell NFTs or to cancel future drops after hearing about the effects they could have on climate change. Thankfully, one of my colleagues has really dug into it, so you can read this piece to get a fuller picture.<\/p>\n

Can I build an underground art cave \/ bunker to store my NFTs? Well, like cryptocurrencies, NFTs are stored in digital wallets (though it is worth noting that the wallet does specifically have to be NFT-compatible). You could always put the wallet on a computer in an underground bunker, though.<\/p>\n

What if I wanted to watch a TV show that\u2019s somehow related to NFTs? Believe it or not, you have options! Steve Aoki is working on a show based on a character from a previous NFT drop, called Dominion X. The show\u2019s site says that it\u2019ll be an episodic series launched on the blockchain (the first short video is on OpenSea), and there are hundreds of NFTs already associated with the show.<\/p>\n

There\u2019s also a show called Stoner Cats (yes, it\u2019s about cats that get high, and yes it stars Mila Kunis, Chris Rock, and Jane Fonda), which uses NFTs as a sort of ticket system. Currently, there\u2019s only one episode available, but a Stoner Cat NFT (which, of course, is called a TOKEn) is required to watch it.<\/p>\n

Random question: what\u2019s an NFT party like? My colleague went to an event linked to NFT.NYC. It sounds like it was a… unique (or should I say non-fungible?) experience.<\/p>\n

Are you tired of typing \u201cNFT\u201d? Yes.<\/p>\n","protected":false},"excerpt":{"rendered":"

When we get a tattoo, we assume it's yours. The design is inked on our skin, we paid an
\nartist as well. However, this may not be the case under copyright law. The question is who
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