A 10-second video clip sold for $6.6M
reuters.com
reuters.com
> In October 2020, Miami-based art collector Pablo Rodriguez-Fraile spent almost $67,000 on a 10-second video artwork that he could have watched for free online. Last week, he sold it for $6.6 million.
And I believe in several comments, it's been explained that fake "sales" (really transfers from someone's left hand to right hand) are really easy to implement in order to inflate the "price" of an NFT on the blockchain.
So did someone really part with $6.6 million for this token, and if so did that person actually earn that money, or just win it from the Bitcoin slot machine?
Is it convertible to USD which can easily be used to buy kitchen appliances, and pants and flights? If so who cares?
As well: I can buy my $200k house from myself for $5m, but I still need to get the $5m. At that level maybe I can game the system (owning 5 properties on that block and selling when the “neighbourhood is valuable”), but this kind of system gaming is as old as money itself.
However wash trading is rampant in crypto.
Also, I don't see the issue with someone buying an asset from themself for some inflated price.
To the rest of the world, it looks like the value of this NFT grew by 2 orders of magnitude in a week. In reality, that person is leveraging the pseudonymous nature to just make it appear that way, in hopes that when they list it for $200k, someone else will actually buy it. They cleared $190k for making a couple of garbage auctions.
Lets say I run a lunar land registry like this: https://lunarland.com/. I have a friend of mine buy a worthless deed from me for $10, then "sell" it to himself for $10,000. Now $10,000 is the "market price." I then use that transaction as "evidence" to hype the idea that lunar land deeds are serious things, part a growing market, good investment opportunity, etc. In the ensuing tulip mania, I pocket a pretty penny selling a lot more worthless deeds to lunar land. The victims are the people convinced my misleading hype to invest in them.
Now I'm not claiming something like is actually happening here, but the whole thing is fishy and I think it's a serious possibility to be considered.
It is. But if you register it as a sale, you get to pay taxes on "the profit".
$6.6 million is going to be treated a lot differently by someone who worked hard to build that fortune, vs. someone who won it (e.g. from a lotto ticket or by buying $1000 of bitcoins on Mt. Gox on a lark for a $1/per).
And unlike your extremely simplistic worldview, it's very possible they'll do something that will create long term value for them. They don't owe it to you to do that though.
You're missing the point: the question is what this $6.6 million transaction for this token mean? Does it mean these NFTs are starting to be taken seriously? Does it mean someone's hyping the tech through a shady transaction? Or does it mean some bozo who won the lotto was willing to blow some money on one?
Winning lotto tickets can also be convertible to USD, which can easily be used to buy kitchen appliances, and pants and flights. Noting that doesn't reveal anything about the differences between how lotto winners spend vs. other people.
> And unlike your extremely simplistic worldview
Excuse me?
The solution to that problem is amazingly simple: IRS. Whoever made that money, fake or not, gets to pay taxes on $6.6M USD.
When you dismiss the concept of cryptocurrency, and another party sings its praises, and argues it will attain massive market value, and the latter ends up profiting from their judgment, they earned their gains. Now when you claim they won the slot machine, you're trying to diminish their accomplishment, and delegitimize their moral right to their success.
I guess the suspicion I have is that someone who's heavily invested in NFT marketplaces may have arranged this to hype them.
And that category may even include this artist, Mike Winkelmann. According to the article linked here https://news.ycombinator.com/item?id=26303420, he'd only ever sold his artwork once before listing it for sale on some NFT marketplace in December 2020 and immediately hitting jackpot.
> Mike Winkelmann never used to call himself an artist. But that was before he made $3.5 million in a single weekend from selling his artworks. In December, he auctioned off multiple editions of three digital artworks, each priced at $969, and 21 unique works, most of which sold for about $100,000 each. It was only the second time he had put his art on sale.
The alternative, which is I think is also very possible, is this is just lucky cryptocurrency money hoping luck strikes twice.
Edit: Ahh I missed you part about other comments, I guess I was pretty close
Humans seem to be in this perpetual fight to artificially reestablish scarcity from the physical world in the digital world. DRM. Invite-only apps. And now NFTs.
The thing that's wonderful about digital is that it should make everything MORE accessible to all, not less.
It will interesting to consider the effect of randomness on our minds in the coming decades. It has always been possible to become wealthy through luck, but in this current context it has intensified to a different level altogether. Every minute you spend doing something else could have been the minute that would have let you discover the next get-rich-quick bullshit/random fluctuation/new bubble/new craze etc. Hard work over long periods of time can be rendered meaningless in an instant. Creating actual value to be rewarded by a small quantity of inflation-prone currency each month is a sucker's game in comparison.
This is reflected in modern investing strategies. It's now all about throwing money and hoping some of it sticks to a unicorn.
Beeple is a cult digital artist who has been making digital art, releasing an asset per day, for 13 years straight. Yes, you read that right. One asset per day for 13 years. Most of his works were free. So, $6.6M is not just an overnight luck. It's the return for what he has been investing in for 13 years.
Or possibly, the transaction between one collector interested in news of the $6.6M transaction.
The $6.6M video itself: https://odysee.com/WvmIn9XyiNHMn3Tc:2
Edit: right-click on the video and select 'loop'. couldn't find the option before.
Kind of seems like dogecoin or other meme/shitcoins? You own a digital asset that you think will go up in value. Coins are currency while NFTs are more like.. rights to a song?
I'm wondering why we don't get rid of the digital asset itself and replace it with a 1x1 pixel gif... it would accelerate the bubble since one doesn't have to spend time creating fake 'art'.
My take is that most of the bigger collectors are probably wealthy folks that have $xsx,xxx - $x,xxx,xxx budgets in "investing" in this emerging economy of NFTs. They are creating the market by collecting. That's all fine, but the really promising piece of all of this is that it acts as a type of "patreon" for artists, especially digital artists.
Not sure I even touched on answering your question, but I think it's great that people of means suddenly have an easy way to support artists far and wide, instead of say buying from a gallery, or buying from the guy you walk by on the street when you're on vacation.
This new space has allowed folks to feel like artists, and some of the more talented people that got attention early have even been able to remove themselves from poverty.
People spend money to buy things for many reasons. I think that anyone collecting NFT art because they are "investing" is walking a dangerous tightrope, but it's a great way to support artists you like, especially if you believe "digital ownership" is something that will be moving forward in our culture.
It's obviously a bit tenuous because of the digital only nature. A real Banksy that physically exists with proof of originality affords control and exclusivity over it's access. A digital Banksy is provably yours as an NFT, but doesn't actually prevent others from viewing it trivially and perfect copies obfuscate the nature of "original". So you own it, and assumedly have exclusive rights to sell it, but it's also very easy to copy and distribute.
I'd be very interested to see if the recent push to artificially inflate the price of NFT's in order to set a precedence for what people should expect as their innate value works.
And this is also questionable. I mean, anyone can make a perfect copy and sell it. They cannot get that sale recorded on some blockchain, but who cares? There are no legal ramifications, because the legal system does not recognize some random blockchain as authoritative regarding ownership, instead most jurisdictions have their own (central) database about registered/copyrighted works.
TL;DR - NFTs help prove ownership without needing a central authority (which is a big deal) e.g. have you ever been misled and bought a fake concert ticket? It's also huge for the collectibles market which is plagued with high-levels of fraud (which is a billion dollar industry).
- NFTs can also make fractionalized ownership more accessible. So using your analogy, as an artist I release a song but I sell fractions of my song as NFTs to my audience and when I receive royalties it automatically gets distributed to all the nft song owners.
There will be meme NFTs of course (the cat that got sold for $600k), it is a speculative asset that people are experimenting with but I think eventually things will reset and the useful NFTs will remain. They can have real utility whether for a virtual or physical world.
The same artwork or membership card or movie ticket can be wrapped in multiple NFT, each living on a different blockchain or on the same blockchain but in different contracts.
Hence you still need the central authority saying which chain is the true one. For example if the NFT represent a plot of virtual land, the game or software managing that land acts as the central authority.
If that is a sincere comment, you’re missing the point.
Where is the added value from NFTs? From my perspective, the only "value" from an NFT is the concept that a digital item that is indistinguishable from an identical digital item may now be tagged with a token that proves ownership (but only of that one digital item) and which may be bought and sold. This is unnecessary for things like insurance policies, land deeds, equity, intellectual property, and domain names. All of these items have meta-information that allows proof of ownership (land deeds are recorded; IP is registered with the USPTO; equity ownership is registered with brokers and trades are recorded with the SEC; etc.). There are already functioning systems setup to record, register, and transact these items.
Youtube has its content-id system.
And the library of congress has a copyright system for digital books as well.
A big difference is that NFTs do not come with any legal rights, outside of “owning” the NFT itself. You don’t own the underlying asset or the copyright, just the NFT of the asset.
But who honestly wants to own a digital copy (without underlying rights) of something that can't be consumed like a movie or book? We're supposed to now pay for an image I can view freely? Where's the benefit in owning the NFT of an asset? Perhaps if a device manufacturer comes out with a device to display ultra-high resolution art images in an attractive frame and you can only obtain a compatible copy of the ultra high-res image if you buy the corresponding NFT, this could be an attractive offering if executed properly but I'm not aware of any devices that create such value for NFTs.
NFTs are somewhat interesting but I strongly suspect there is market manipulation (most likely by players with investments in NFT-adjacent entities) going on with some of these NFT sales.
It doesn't prove that. It proves no one else owns that particular copy of the work. The author or anyone else can create another NFT in a different collectible contract from another copy of the same work.
Think of it as the certificate you get when someone sells you a star.
So they are steam keys, verified by blockchain, but just numbers associated with a piece of art. Sounds like DRM to me. Fungible doesn't mean identical. Every US 100$ bill has a unique number attached. The bills are still fungible. The numbers are not identical but serve the same functional purpose, so they too are fungible. Nobody cares what number is on their money. One bill/number can be swapped for another without impacting any function. Fungibility.
"able to replace or be replaced by another identical item; mutually interchangeable." Oxford law.
Though the DRM analogy may work in applications that interact with NFTs. For example, games with unique items. The application would limit the full experience of a tokenized object to the owner alone. For example, only n00b5lay3r may equip the Golden Sword of Evisceration, because it's in their wallet.
https://mobile.twitter.com/niftygateway/status/1364745727889...
Shhh we are not supposed to talk about the censorship imposed by our overlords.
edit: this explanation https://niftygateway.com/whatisanifty doesn't make it any clearer.
Million bucks for a small pixel art. Such garbage.
Say, you have a bunch of money made from selling cocaine and you want to buy a house. It's really hard, because people will want to know how you made the money without a job. So you buy some NFT for about 10k with your clean money. Two months later, you sell the NFT for 500k to an anonymous buyer online, who pays through crypto. The buyer is you, buy nobody knows that, because they're anonymous.
You now have 500k cash, you will need to pay some taxes over your gains, but then the money is clean and when you buy the house you say you got the money through an investment in NFT.
Meanwhile, some random people read about how you made 10k into 500k in two months by trading NFT. So people will start investing in it, making your money laundering less obvious.
This is a bit of a simplification of what could be happening, but it does seem feasible.
Bonus points, as now a lot of people think the NFT that my dirty hand still holds is worth $1m!
That's the purpose of money laundering - to bring ill-gotten gains into the light so they can be used.
"Mike Winkelmann never used to call himself an artist. But that was before he made $3.5 million in a single weekend from selling his artworks. In December, he auctioned off multiple editions of three digital artworks, each priced at $969, and 21 unique works, most of which sold for about $100,000 each. It was only the second time he had put his art on sale."
https://www.nytimes.com/2021/02/24/arts/design/christies-bee...
So from $100k/piece up to $6.6M.
Does having some random bit set on some random blockchain grant me any actual legal rights or privileges?
Very real. The Zircon Confederacy on the fourth planet of my star system immediately submitted to my hegemony on account of my $10 certificate, and now I earn a steady income of 4 billion quadrooons of gold in tribute per annum.
However, due to the difficulty in transport across interstellar space, they've helpfully represented my ownership interest in the tribute using NFTs.
No link? Reuters you are such a dinosaur!
What I don't understand is how ownership is enforced and if a DMCA is filed, who will work that case? I guess there are some bitcoin lawyers out there for that!
What I meant is that they are just speculating about NFTs and that what was actually sold is of no importance. They could as well have sold a 1x1 pixel image, nobody really cares about the digital asset itself...
Without NFTs, I would sign a contract with the artist (or current owner) of a digital artwork that transfers the ownership and all rights to the work to me. Since it's a digital artwork, the contract would include a secure hash fingerprint of the artwork to ensure we know what artwork we're talking about. Now, somebody somewhere could fraudulently claim to own the artwork and try to sell it, but the prospective buyer could check with the original author and track down the current owner (through the contracts trace) to ensure they're dealing with the legitimate owner.
NFTs make this easier by putting all that stuff on the blockchain.
Did I get it correctly?
On the one hand it's a way to give an artist more money directly, sure, and tie it to the specific work. But you could just do that publicly or anonymously anyway.
On the other hand it seems entirely performative, in that it only servers to signal to wealthy peers (in this case, crypto bros) that you are an "art patron" without the messiness that comes with a real work on canvas that can get damaged by sun, fire, moisture... where's all the risk? The value is all declarative and speculative. As others have offered, this is like land on the moon.
I could sort of see the logic if this was tied to a massively popular online game where it enforced your ability to have the one custom skin and no one else can use it, with the cooperation of the game itself.
But in general this is not what's happening. It seems primarily driven by speculation and probably a criminal element... crypto bros wanting in on the money laundering and tax evasion possibilities of art collecting without all the business of actually you know, having it.
There are interesting use cases for NFT but for art it doesn't really solve anything new.
It’s a new type of digital asset - known as a non-fungible token (NFT) - that has exploded in popularity during the pandemic as enthusiasts and investors scramble to spend enormous sums of money on items that only exist online.
Blockchain technology allows the items to be publicly authenticated as one-of-a-kind, unlike traditional online objects which can be endlessly reproduced.
“You can go in the Louvre and take a picture of the Mona Lisa and you can have it there, but it doesn’t have any value because it doesn’t have the provenance or the history of the work,” said Rodriguez-Fraile, who said he first bought Beeple’s piece because of his knowledge of the U.S.-based artist’s work."
[...]
>"The start of the rush for NFTs has been linked with the launch of the U.S. National Basketball Association’s Top Shot website, which allows users to buy and trade NFTs in the form of video highlights of games.
Five months after its launch, the platform says it has over 100,000 buyers and nearly $250 million in sales. The majority of sales take place in the site’s peer-to-peer marketplace, with the NBA getting a royalty on every sale.
The volume is rapidly rising: February has seen sales totalling $198 million as of Friday, heading for a fivefold increase from January’s $44 million, Top Shot said.
Each collectible has “a unique serial number with guaranteed scarcity and protected ownership guaranteed by blockchain”, the site says. “When you own #23/49 of a legendary LeBron James dunk, you’re the only person in the world who does.”
The biggest transaction to date was on Feb. 22, when a user paid $208,000 for a video of a LeBron James slam dunk.
One major NFT enthusiast, who goes by the pseudonym “Pranksy” told Reuters he had invested $600 in an early NFT project in 2017 and has now built that up to a portfolio “worth seven figures” in NFTs and cryptocurrencies. He asked to be anonymous to protect his family’s privacy."
(Which have been around forever, what’s the reason for the current hype)
The Beeple video clip is an ERC721 token.
$6.6M pays 2021 rent for 500+ struggling people, but for the wealthy, the opportunity cost is that of vaguely owning a 10-second anti-Trump video loop...
In 1636 A single Tulip bulb was exchanged with Two lasts of wheat 448ƒ Four lasts of rye 558ƒ Four fat oxen 480ƒ Eight fat swine 240ƒ Twelve fat sheep 120ƒ Two hogsheads of wine 70ƒ Four tuns of beer 32ƒ Two tuns of butter 192ƒ 1,000 lbs. of cheese 120ƒ A complete bed 100ƒ A suit of clothes 80ƒ A silver drinking cup 60ƒ
Total 2500ƒ
One heck of a Tulip it must have been
I periodically have the need to find that picture every now and again, and I usually find it by searching "Curbes Lurb" or "Mmm...mlurp"
My guess is that trolling accounts for a tiny fraction of the spend compared to the other factors.