WOULD you spend £50 million on an artwork you could not hang on your wall or even touch, that exists only in the digital world? Digital art and assets have rocketed in popularity of late, although some have their doubts that these "NFTs" will endure.

 

NFTs?

“Non-fungible-tokens” is the name given to a type of “cryptographic asset”, touted as the digital answer to real-life collectables.

 

In plain English please?

NFTs are tokens that represent ownership of unique digital items with no tangible form. And just like Bitcoin - which is a type of digital currency used to buy and sell goods and services - NFTs are completely virtual.

 

However?

Unlike Bitcoin and other cryptocurrencies which are “fungible” - a fungible asset, such as money, can be interchanged, such as swapping two £5 notes for a £10 - NFTs are “non-fungible”, so they cannot be replaced or exchanged for other NFTs, as each one is unique. 

 

So they are rarities?

NFTs are almost the online equivalent of trading cards - a collector’s item that cannot be duplicated. NFTs assign value to digital art and assets and can be sold and traded in a similar way to physical art which is why investors and collectors are wiring in.

 

How do you prove ownership?

Like any major artwork you can think of - from Van Gogh’s Sunflowers to Da Vinci’s Mona Lisa - there are lots of reproductions, but only one original. Although an image, for example, could be viewed by anyone online, ownership of the original is recorded on a blockchain - a digital record - that is essentially a certificate proving possession.

 

Snapping these up is the latest trend?

An expensive trend at that. Last week, Christie’s auction house in New York held its first digital-only art auction during which, a piece of digital art, titled “Everydays: The First 5000 Days”, by American artist Beeple, was purchased for $69 million - around £50 million.

 

Wow!

Beeple produces a new piece of digital art daily and sold all his work from the first 5,000 days since he began creating art in 2007. Christie’s said the sale puts him "among the top three most valuable living artists", behind David Hockney and Jeff Koons.

 

The auction was a huge draw?

Christie's said a record 22 million people watched the final moments of the livestream.

 

Tweets for sale?

Twitter CEO Jack Dorsey is selling his first ever tweet as an NFT, with the highest offer so far $2.5 million, although bidding continues till March 21. He will donate the profits to charity.

 

Grimes?

Canadian musician Grimes - partner of the world’s richest man Elon Musk - sold several pieces of digital art at auction earlier this month, raising $6 million.

 

The downside?

Running blockchains use a significant amount of electricity, sparking concerns over the climate friendliness of NFTs.

 

And?

Some artists feel NFTs go against the point of owning art. London-based digital artist v buckenham told The Guardian: “The point of owning a piece of art is to look at it and enjoy it and buying an NFT doesn’t do anything to help you do that.”