You may think you have experienced buyer’s remorse. But until you’ve spent $ 5,000 on a Jpeg, you haven’t. That’s where I ended up the other day, after an adrenaline-filled afternoon bidding on a collectible digital “card” of the Mona Lisa sitting on an easel.
The object in question is a Curio card, one of the earliest examples of a non-fungible token (NFT), a new technology used to buy and sell digital art. NFTs are the last frontier for cryptocurrency freaks, the online gold rushes that keep financial watchdogs awake at night. Tired of a quiet summer for the stock markets, memes and bitcoin speculation, maniacs are piling up in the burgeoning digital art market.
It’s booming. In August, punters spent a total of $ 2 billion on NFTs. Some sales are really ridiculous, like the clip art of a rock that cost $ 1.3 million. Last week, a woman named Natasha Che bought a diamond for $ 5,000, destroyed it, then whipped up a photo of it for $ 18,000. There has been a slight lull in the NFT mania in recent days as cryptocurrencies have fallen. But the general trend is upwards.
If you’re still wondering what I’m talking about, let me try to explain. An NFT is a record of ownership of something unique, like a digital painting. If you buy it, you are the sole owner of the artwork. Of course, on the Internet you can just right click and save the file. But you would own a reproduction, not the original. To put it in terms of a physical art collection: anyone can have a Van Gogh print; only one person can own the original.
Not that we are talking about Van Gogh here. Most NFT artwork looks like something a 14 year old would draw on his pencil case while drinking Monster energy drinks. Among the most valuable collections you will find cartoons of monkeys, aliens and mutants.
Bettors seem to appreciate this comic book aesthetic. It’s great art for the geek universe. Still, most are in the game for more mercenary reasons. As in crypto speculation, almost all “community” gossip is blind get-rich-quick evangelism.
It’s a suitably absurd craze, totally in tune with the past two years, which have seen so many ridiculous financial fads that it’s now a cliché to say we’re in a bubble.
The boom certainly won’t last, and my involvement in it is more like gambling than the sobriety of tending to a wallet. This week, as I was trying to buy a new ‘Sneaky Vampire’, I was struck by the similarities between NFTs and slots: long odds of success, nervous waiting, and the familiar episode of self-loathing, then at the end a cartoon vampire tells you if you’ve won a cash prize.
Despite all of the above, I still believe in NFTs. We are increasingly living in the digital world. Over the next 30 years, we’ll be spending more time in shared virtual spaces, known as the metaverse. We’ll buy stuff for this world.
This is just the start, but people are already spending money on virtual goods and experiences. The hugely popular game Fortnite hosted a temporary Martin Luther King experience the other week. An adult friend recently confessed to paying £ 100 for a beret and leather pants for his character in the action video game Call of Duty. He had to throw the pants off after his teammates complained they squeaked when he walked, revealing his position.
In this brave new world, the rich will decorate their virtual homes with attractive art and status symbols. This is what is driving the huge NFT prices right now: They are the perfect signal that you were one of the first to adopt. Meanwhile, back in the real world, technology will become so effective at hanging digital art on your walls that an NFT painting will look and even look like a painted canvas. At the moment, however, we’re stuck with some hideous cartoons that you can only snag on your Twitter profile.
That hasn’t stopped some big names from piling up. Visa sparked a market surge in late summer after buying a CryptoPunk (one of the very first NFTs) for $ 150,000. Christie’s and Sotheby’s smelled the money early on and are running another round of auctions this month that are expected to push prices up.
Damien Hirst, who never runs out of money, has his own scam, aptly called The Currency. He produced 10,000 nearly identical but roughly unique dot paintings, selling them for $ 2,000 each. The twist: Buyers have a year to decide whether to keep the physical paint or the NFT, and Hirst burns the one they didn’t choose.
The Damiens were my gateway drug to the NFTs – I bought one assuming I would take the physical paint, but then saw the price of the digital versions skyrocket to $ 60,000. They’ve since fallen to half that peak, but I’d seen enough to drink the Kool-Aid, and I’m looking forward to the sweet scent of the web on fire in July 2022.
Soon I was looking for more opportunities. I finally opted for the Mona Lisa Curio Card (whose official title is “Painting”). I persuaded a friend to go halfway with me. Not only is he one of the very first NFTs, we told ourselves, but he is the first to feature a woman. A full set of curiosities will be auctioned at Christie’s on October 1, including our Mona as the exhibit poster.
We piled up, and then I opened a new tab to browse Notting Hill townhouses that I could buy with my inevitable earnings. An hour later, the price was up; we had done a great one. Then it cracked. Turns out we bought at the top of the market, and my boyfriend and I are currently suffering a 50% loss. We could face a decade to go until our precious piece of Internet history gets the recognition it deserves. Either that or it will turn out to be totally unnecessary.
This is the problem with NFTs. As with the dot-com bubble, there are probably a few winners lurking among a smoldering heap of overrated poop. The challenge is to differentiate them. In the meantime, I am open to offers for the NFT of this article.
This article originally appeared in The spectatorthe British magazine. Subscribe to the global edition here.