I Bought an NFT. Now What?
Inside the internet phenomenon that spawned a $69 million digital artwork.
So I bought an NFT.
Let’s take a step back: I have little to no knowledge of cryptocurrency, but I figured I’d give it a go. What’s the worst that could happen? A nosebleed? Accidentally setting off a chain of events that powers down the grid on the Eastern seaboard? Fame and fortune?
It’s fitting that I set out on this journey on the day that Bloomberg declared the NFT bubble had burst, with prices crashing 70% from their peak in mid-March. Nevertheless, I sat down at my computer and decided I wouldn’t log off until I had an NFT. Maybe it was a good time. Maybe prices were dipping and I wouldn’t have to spend as much on my NFT.
I’d first heard about NFTs in 2018 in a Paris Review article about the Rare Digital Art Festival. The term “non-fungible token” or “NFT” wasn’t used in that article but that’s what the digital artifacts in the article would come to be known as. “Non-fungible” basically means they are unique, one of a kind. With currency, you can trade a $1 bill for another $1 bill, and it doesn’t matter where that $1 bill came from. With NFTs, each token comes with a unique code. Each one is different and could be worth vastly different amounts, even if they’re basically the same thing.
NFTs have actually been around since 2014, when Brooklyn-based artist Kevin McCoy sold a GIF to tech blogger Anil Dash and then published the transaction on the blockchain. Essentially, the blockchain is a digital ledger, and users on computers on the blockchain all around the world verify each transaction. NFTs are digital files (JPEGs, videos, GIFs, etc) tied to transactional bits of code on the blockchain that can be bought and sold with cryptocurrency.
Which is to say, you need some cryptocurrency to purchase NFTs. I already had a Coinbase account, which can take up to three days to activate, so I was a step ahead of the game. After a quick Google search, I found that the crypto of choice in the NFT world is Wrapped Ethereum (wETH), which is basically the tradable version of Ethereum (ETH).
To convert ETH into wETH, you need an Ethereum Wallet, so I downloaded that. Then, you can link your Ethereum Wallet to OpenSea, which is like eBay for crypto assets. Soon, I hit my first snag: to convert ETH to wETH, you need to pay a “miner fee,” which apparently is higher when there are more people using the blockchain. This fee was about $8.
Since McCoy’s gambit back in 2014, NFTs have slowly gained in notoriety. Stories about the Rare Homer Pepe (a digital trading card of a green Homer Simpson) and CryptoKitties (collectable digital cartoon cats) have sold for hundreds of thousands of dollars, sparking mild media interest.
But in March of this year, NFTs exploded into the mainstream around the time Mike “Beeple” Winkelmann put his artwork Everydays: the First 5000 Days, a collage of 5000 digital drawings, up for sale as the first NFT sold by Christie’s. It was bought for more than $69 million by Vignesh “MetaKovan” Sundaresan.
If it all sounds a bit ridiculous, that’s because it is. The cyberpunk nicknames, the ungodly amounts of money ( Everydays became the third most expensive artwork ever sold by a living artist), the reliance on cryptocurrency, itself a tenuous proposition that could conceivably go belly up if governments decide to regulate it.
It’s not all CryptoKitties and Beeples though. Early internet artists like Petra Cortright and Ryder Ripps, and highly respected contemporary artists like Urs Fischer, Neïl Beloufa, Matthew Stone and Simon Denny have all dipped their toes in the NFT game (along with rapper Azealia Banks, musician/filmmaker Mr. Oizo, LA billboard icon Angelyne and brands like Taco Bell and Charmin). There have even been several fashion brands eyeing their NFT prospects—including Gucci.
I called up a friend of mine, Norberto Rodriguez, an LA-based conceptual artist who was selected to participate in the 2008 Whitney Biennial, and he said it was something he’d been waiting for for a long time: a way to bypass the traditional gallery structure and sell art directly to collectors.
Plus, he said, he’s able to build in a kind of coded “royalties,” something unheard of for contemporary artists. If I were to sell Rodriguez’s work, he would get 7% of the sale. If whoever I sell it to sells it, Rodriguez gets 7% of that sale, and so on. Furthermore, artists have been wooing technologists for a long time to collect art, but despite all the money in tech, it’s been hard to convince them of art’s value. With the addition of the blockchain, it seems it’s been easier to get Silicon Valley millionaires to part with their money for art.
I decided then that I was going to buy one of Rodriguez’s NFTs that he had for sale on the NFT platform Foundation. Rodriguez told me it was actually a little expensive to “mint” (the term for putting a work on the blockchain to be sold) an NFT, about $80 or so in gas fees. On the buyer’s end, I found out that similar gas fees are charged to the purchaser.
Finally, after putting more ETH from my Coinbase account into my Coinbase Wallet, and converting more ETH to wETH for a fee to cover the gas fees, I was able to purchase A machine learning No. 1 6/7 by Rodriguez for .125 ETH (approximately $255.30) plus a bunch of fees (about $150), bringing the total cost to approximately $455.30. The piece is a still from a 07:37 video of Rodriguez using Sumi ink to paint a banana with tape on it á la Maurizio Cattelan’s famous art world send-up from Art Basel Miami Beach in 2019, where the noted art-scamp Cattelan walked around the art fair and taped bananas to walls with duct tape and sold them for $120,000 each.
It’s important to note that there is some concern around the environmental impact of NFTs. Ethereum mining and operations use real fossil fuel energy to power servers around the world, and to cool computers that run at high capacity. According to Time magazine, Ethereum mining alone uses energy equivalent to the amount used by the entire country of Ireland. NFTs are a part of this system, creating more and more transactions for the chain to validate as more and more people mint NFTs. Also, there’s concern that random people are tokenizing other artist’s work and selling it on OpenSea.
And then there’s the general complaint that people pay too much attention to the financial aspect of the NFTs, and not enough attention to the art. But that’s always been the conversation around contemporary art. Case in point: Cattelan’s $120,000 bananas.
I’m not sure what to do with my NFT. It’s sitting in my wallet right now in a collectibles section. I can look at it, tell people I bought it, tweet about it, write an article about it. Maybe it’ll accrue value and I can sell it, earning myself and Rodriguez money down the road. Most likely, it’ll just chill there until the NFT craze dies down. Then maybe I can print it out and hang it on my wall.
Writer: Maxwell Williams