The Crypto Art Age Has Officially Begun
This JPEG image sold for $69.3 million! Yes, you read it right.
A person spent the price of 2000 cars or 200 houses or 20 islands to buy this digital image file. So why? This person is either crazy or smarter than all of us!
Is there a hidden feature in this picture that we cannot see at first glance? This 21069 x 21069 pixels large image consists of other small images. It contains a lot of drawings, sketches, illustrations. Some look beautiful, some seem ordinary. There are references to popular culture in between: Pikachu, Michael Jackson, lots of Yoda and Star Wars…
Still, do you think this collage of small thumbnails can be that valuable? Let's see who did it. As the author, we see a person named “Beeple” born in 1981. A graphic designer, whose real name is Mike Winkelmann, made a decision on May 1, 2007: "From now on, I will draw a picture and post it online every day". That's why the name of the collage he created by choosing from these means "EVERYDAYS: The First 5000 Days".
An interesting story. But it still isn't enough to explain how it achieved such a large valuation. Because you can reach each of these images right now on the internet. It continues to be published piecemeal on its website. You can download them, print them in color and stick them on your wall. Or if you don't want to deal with it one by one, you can get the book that will be released towards the end of the year. While the same images are free on the internet, and a maximum of $65 when printed as a book, why would you pay more than 1 million times for this image?
Because there is an infinite number of them. The real value is less. In its original version. Because there is only one of them. Less is valuable.
Digital assets are added to what is now valuable. A painting does not have to be made as an oil painting on canvas. It can also be designed as a 3D visual on the computer screen. But since it is digital, it is much easier to reproduce by copying. If we could invent a reliable method of distinguishing the original version from the copies, then that first original version would be much more valuable.
In fact, such a reliable method was invented. Check out what it says just below this piece of Beeple's "Everydays": non-fungible token. The technology used by cryptocurrencies this time registers the authenticity of works of art or collectibles. Non-Fungible Token, in short NFT stands for non-changeable token. These tokens cannot be exchanged with each other, unlike cryptocurrencies. Because each immutable token is different from the other, unlike digital currencies. Generally, these digital assets on the Ethereum infrastructure are created according to the ERC-721 and ERC-1155 standards.
Therefore, this JPEG image is not available elsewhere in its original form. A person paid $69.3 million in March 2021 to purchase this image file. If he did it with paper money, he would have to fill and carry dozens of safes. Of course, he didn't. We are now in the 21st Century. This payment was not made in such paper money and in a currency such as euros or dollars. If we continue to look at the explanations under this picture, which was sold at the auction held on March 11, 2021 at Christie's, one of the oldest and most important auction institutions in the world, we see that the owner of the work also has a digital wallet. After the sale, the payment was made in the form of a crypto money transfer to this wallet.
It is more correct to read the news: A digital artifact made digitally in 13.5 years was sold with a new generation digital currency. Crypto art has changed hands with crypto money. You might be thinking, though, that it shouldn't have been that valuable. You can still call the person who bought it crazy. Don't be in such a hurry. Similar things were once said for bitcoin.
Still, seems crazy to spend that much money on a JPEG image? Is it wise to give all that money to a mine like gold? After all, it's gold. It's very precious. Why? Because there are fewer metals in the world compared to other mines. Well, so are works of art. Why do you think the rich collect art? Because the gold they can have with millions of dollars cannot maintain its value as much as the works of art they buy with the same amount. Artworks can increase in value over the years much more than other assets. Why is Bitcoin gaining so much value? Because it has such a design that in 2140 new bitcoins will become unproducible. There will be a limited number of bitcoins in the world, like gold or a piece of art.
That is why it is necessary to look a little more carefully at blockchain technologies, cryptocurrencies produced using it, and now crypto art. Time will tell who is crazy and who is smart. If the person who paid 69.3 million dollars for that JPEG picture sells it for 169 million dollars 5 years from now, we will remember these days once again.
This is the world of tomorrow. The crypto art age has officially begun.