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Non-Fungible Token Art Gallery Sells Millions Even Before the Art Is Made

Sight unseen, please buy my image. In return you get an NFT.
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This Blank Image

Not Created Yet

The following snip  is from Minting Takes Manhattan, a paywalled article. 

The art was worth at least $7 million, and it hadn’t even been created yet.

It was the opening night of non-fungible token artist Tyler Hobbs’ show “Incomplete Control” at the Bright Moments gallery in Soho. The gallery, lit by candles and LCD screens, hosted a crowd of about 100 crypto influencers, venture capitalists and traditional art connoisseurs. They sipped champagne while waiting to see if their tickets were worth it; they had all prepaid anywhere from $120,000 to $400,000 to acquire a Hobbs original.

Throughout the night, each of the ticket holders would be escorted to the elevator (wallpapered with mantras like “you can’t spell culture without cult” and “fear kills growth”) and led to a gray cement basement. Using their own laptop, they’d “mint” their own Hobbs original, spinning the artist’s code into a one-of-a-kind NFT. At around 8:15 p.m., the works of art would be unveiled one by one on screens around the gallery—not just to the buyer, but to the artist as well.

What Are Non-Fungible Tokens?

The Verge explains. WHAT IS AN NFT? WHAT DOES NFT STAND FOR?

“Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. 

How do NFTs work?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs. (Some already have.)

Do people really think this will become like art collecting?

I’m sure some people really hope so — like whoever paid almost $390,000 for a 50-second video by Grimes or the person who paid $6.6 million for a video by Beeple. Actually, one of Beeple’s pieces was auctioned at Christie’s, the famou—

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

Wow, rude. But yeah, that’s where it gets a bit awkward. You can copy a digital file as many times as you want, including the art that’s included with an NFT.

But NFTs are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork). To put it in terms of physical art collecting: anyone can buy a Monet print. But only one person can own the original.

No shade to Beeple, but the video isn’t really a Monet.

What do you think of the $3,600 Gucci Ghost? Also, you didn’t let me finish earlier. That image that Beeple was auctioning off at Christie’s ended up selling for $69 million, which, by the way, is $15 million more than Monet’s painting Nymphéas sold for in 2014.

Whoever got that Monet can actually appreciate it as a physical object. With digital art, a copy is literally as good as the original.

Digital Free Version

Anyone can watch that anytime they want. But one person paid millions .

How much do you want to pay for this Gucci Ghost Yellow Aqua #27/45

Gucci Ghost Yellow

It's an animated GIF file that moves a bit left to right. It's listed for $16,300.00. 

Anyone can see it by clicking on the above link. But only one person can claim ownership of the NFT (at least until someone decides to sell fractional ownership of the NFTs).

Bitcoin vs Ethereum Jan 1 to December 10 

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Bitcoin vs Ethereum 2021-12-10
  • Bitcoin went from $29,338 to $46,191. It's up 57% since January 1. 
  • Ethereum went from $730 to $3,902. It's up 435% since January 1.

The relative strength of Ethereum vs Bitcoin this year may have to do with NFTs. 

How Crazy Can It Get? 

I have no idea. But every time I think something like this might be peak craziness, I am wrong.

This is the monster the Fed created. 

And it's certainly part of inflation. So is housing, and so is the stock market. But very few of us see speculative inflation for what it really is.  

Crypto Regulation Coming

In case you missed it crypto regulation is coming. The EU is much further down that path than the US. 

For details, please see The EU is Well Ahead of the US in Cryptocurrency Support and Regulation.

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