When BuzzFeed dropped an article listing 13 Weird and Wild celebrity NFT projects of 2021, in December last year, folks here at Cope loved it. After all, we are mega-NFT enthusiasts (ahem, a few of us are cynics here too!), and we loved that it was so well-curated. It is no easy task to put the craziest NFT launches in one article, especially since it has become routine to discover at least one news bite on a celebrity NFT launch every day.
However, what was liked best was that Buzzfeed took a neutral standpoint, neither praising nor dissing NFTs. They highlighted the ideas that shaped these NFTs and discussed the juicy bits: the craze that followed or the flak these received. In an industry, where you are either touted to be an NFT-enthusiast or a right-clicker, the Buzzfeed article was a breath of fresh air.
But, don’t get us wrong! We love that NFTs are drawing that level of attention and believe that healthy skepticism and criticism are essential for shaping technology for the greater good. But sometimes, opinions seem to be more driven by fear and awe for new assets and technology than anything else.
And don’t even get us started on the promotional NFT content that is regularly churned that shows NFTs as the coolest thing humanity has ever imagined!
But, if you are one among few who are still in the dark about NFTs, or you know about these digital tokens but are still undecided about them, then you are in the right place. Let’s break down the basics and hopefully you will be able to decide whether the great celebrity-NFT connection is a passing fad or the new normal.
So, what are NFTs?
NFTs or non-fungible tokens are unique tokens on a blockchain that represent a digital asset, like a piece of art, audio/video clip, or even a piece of text. When you buy an NFT, essentially you buy a piece of data on the blockchain that points to that asset.
Now, this piece of data can be sold to other addresses, the record of which is again stored and maintained on the blockchain. This makes the process of finding ownership of an NFT easy.
But, unlike physical art, which you can commission, buy, and then store under lock and key, NFTs are open for all to see. In fact, NFTs can be right-clicked and saved as an image on a desktop or mobile phone, for free.
Well, what’s the point in purchasing or launching an NFT then, you ask. Well, the next section should answer your question.
Non-fungibility, irrefutable ownership, and scarcity
NFTs are non-fungible, which means that you cannot exchange one NFT with another of the same kind, without changing its value and attributes.
If you are a Van Gogh fan, you know that The Starry Night and Sunflowers are two very different paintings. You cannot exchange these and still expect to have the same painting. Similarly, you cannot exchange one NFT for another.
To expand on this, if The Starry Night was to be valued today, it will be worth over $100M, but you can easily find an imitation online for under $20. By the same token, someone who copies an NFT art does not own the real NFT, no pun intended! They only own a copy or an imitation, which does not have any real-world value.
This brings us to the second most important aspect of NFTs: irrefutable ownership.
With the Internet, it’s possible to save and use a copy of any digital asset, an image, an audiobook, or a video file without buying the rights to it. Often, these are used to create content for the web (read creative theft and plagiarism), which makes it hard to determine original ownership.
With NFTs, ownership is guaranteed and verifiable. When someone claims to own an NFT, it is possible to manually verify the ownership as the data is open for all to see.
Recent developments, such as Twitter announcing a verification mechanism for original NFT profile pictures, are sure but incremental efforts to make ownership claims much easier to vet.
The final aspect is that of digital scarcity.
A complete J.R.R. Tolkien collection is a prized asset. Period. Now, imagine if there were over a thousand J.R.R. Tolkien original books! Chances are, you will own only his best works and leave out the rest.
In other words, the more scarce an asset, the more valuable it is. Add to this, the flavor of original thought and the attribute of novelty, and you have a winner!
NFTs work on the same principles. When NFTs are launched, there is only a finite number that is minted. So, the first-come (or the highest bid) is the first served. Further, they are endowed with attributes and novelties that set them apart from others in the same class. This makes them valuable and desirable
Cool! So, NFTs are unique, rare, and non-fungible. But, what do celebrities gain from launching NFTs?
NFTs are a great investment!
When Eminem launched his first NFTs last year, he raised over $1.8M. Lindsay Lohan sold NFT based on her single “Lullaby” for over $50k. Jack Dorsey sold his first tweet as an NFT for more than $2.9M. Logan Paul sold around $5M worth of NFTs ahead of his Pokemon Box Break. The Human One, an NFT by the digital artist Mike Winkelman (also known as Beeple), sold for $29.98M!
Seriously, who doesn’t like The Human One?
When celebrities launch NFTs, they either push their NFTs for auction or set a fixed price for their sale. They also utilize royalty contracts, which enables them to collect royalties on resales of these NFTs. This makes NFTs a great investment.
NFTs are a powerful way to engage with fans!
NFTs are more than just the deeds to an asset.
They can be programmed to hold special privileges for owners. For instance, NFTs can work as membership cards to exclusive events, offer discounts on merch, and also function as digital keys to virtual spaces where the original creators of the NFT (in our case, celebrities) and fans can bond over a metaverse game, party, or private meetup.
Take for example, the Bored Ape NFTs, which double as membership cards to the Bored Ape Yacht Club and to the exclusive members-only graffiti wall. The NFT holders can paint 1 pixel in the wall every 15 minutes. The members also have access to the Bored Ape Yacht Club discord channel, where prominent celebrities and holders of the NFTs regularly hang out and interact.
Such benefits add to the value of ownership, and as Harvard Business Review so aptly puts it: “[…] almost paradoxically, this increase in the value of ownership comes in a form that helps separate the value of ownership from the purely financial opportunity of reselling.”
NFTs can be an opportunity to build narratives!
Emily Ratajkowski‘s NFT “Buying Myself Back: A Model for Redistribution” was no ordinary NFT. The NFT shows the model posing in front of an image of herself.
The artist Richard Price had taken one of her Instagram photos and then printed them on a canvas as part of his “New Portrait” Series. Her NFT was her act of exerting control over her own image.
As people became more familiar with NFTs in general, the focus shifted from novelty alone to the story and the motivation behind the NFT. Everyone wants to support a cause or embrace a message with pride.
And one message that everyone can rally behind is the democratizing nature of NFT technology — anyone can create art or develop a universal message as an NFT. NFTs solve the issue of original ownership, letting independent digital artists and creators be fairly rewarded for their work.
It is these aspects, perhaps, which make NFTs a game-changer of our times.
NFTs have sentimental value!
We knew that our obsession with collectibles is old. Turns out we are wrong! It’s actually primeval, and not even limited to humans alone. Personally, some of us here are hooked on Insta vids showing cats bringing dead mice, garbage, and other collectibles for their owners. But, let’s not go there, right now!
When humans attach a special significance to objects, be it plates, dolls, trinkets, or NFTs, they become valuable. This is what drove the craze for trading cards and baseball cards in the early to the mid-1900s, the Pokémon cards of the 90s, and NFTs in the last few years.
There is also the allure of history and past ownership. Buying a Bored Ape NFT owned by Jay-Z will have a far better value than one owned by John Doe!
Today, baseball and Pokémon cards are billion-dollar industries. And it is not surprising, therefore, that NFTs with their promise of novelty, community benefits, and setting narratives is such a massive trend today.
So to answer the question, “Will the NFT craze abate any time soon?” — Dr. Dustin York, associate professor of communication at Maryville University, sums it up perfectly, while speaking to Forbes.
He says that we are in the midst of a fast-growing NFT hype stage, which will inevitably witness a drop in times to come. He further comments: “Critics will then call NFTs a fad, just like they called e-commerce a fad during the dot-com bubble. NFTs will then rise back up and be part of our everyday lives.”
Perhaps, Dr. York, only time will tell.