How NFT Differs From Bitcoin, Helps Digital Artists
In recent months, artists have taken advantage of the NFT art craze.
As a result, some digital arts have sold for millions of dollars. But what exactly is NFT, and how is it different from its cryptocurrency cousin Bitcoin? In an interview for “LA Times Today,” business reporter Sam Dean joined host Lisa McRee to explain.
An NFT, which stands for a non-fungible token, is like a certificate of authenticity for an object, real or virtual.
“A fungible token is something like a bitcoin in the same way a dollar is fungible,” Dean said. “A dollar can buy you a bag of chips, or it can buy you a banana, but a banana can’t buy a dollar. So a non-fungible token is a one-time thing, not something that’s infinitely transferable. An NFT is a unique piece of code, whereas a bitcoin, you can trade it, and it’s still a bitcoin. But the NFT is a unique work of art, fundamentally.
The unique digital file is stored on a blockchain network, with any change in ownership verified by a global network and recorded publicly.
“You can have an NFT for the moon. You can have an NFT for a selfie you took yesterday,” Dean added. “It was born out of the need for visual artists to figure out how to make money from their art. It’s always been a problem for physical art that anyone can control the copy and paste, and all of a sudden Suddenly there’s another copy of the same image. So it’s on a giant blockchain which is like a spreadsheet that proves who bought what. And it’s a way to have a certificate of authenticity for a digital image that is otherwise reproducible.
A game called CryptoKitties has been using this technology since 2017.
“It was the first attempt to really do something with it,” Dean said. “It was really fair in the crypto world. People could buy these unique cat tokens that looked like Pokemon. So you had a unique thing, and you could trade it for $10 a day and $20 a day. another day. But it ended up taking off because people thought it was fun, kind of like beanie babies back then. And fast forward a few years, and it blew up. And the question of why it It’s because some people like to buy things, and now they’re sort of an investment because you can resell things for more money.”
Last year, “Star Trek” actor William Shatner created a series of trading cards featuring images from his career.
“He had things like his dental records, stuff from the first series of ‘Star Trek,’ and people paid a few bucks for each of them. And they have proof that they have these kinds of items from collection. Since then, so much has taken off. The same people who made CryptoKitties put out this NBA Top Shot, which got a ton of interest and a ton of sales. It’s basically a headline clip from , for example, LeBron James dunks, and this clip has the NFT attached to it that people can sell and resell like it’s a playing card.”
One of the digital artists who has made a career out of NFTs is Mike Winkelmann, who goes by the name Beeple.
“He sold a painting that you could otherwise just copy and paste and make a screensaver out of it,” Dean said. “People sold it as an NFT, and it sold for $69 million as a collectible. People who pay for it do it for the chance to get more money for the same thing later; this is pure speculation. It should be noted that some of the people who have paid the most for these things are themselves, huge holders of the cryptocurrency that is used to transact it .”
Click the arrow above to watch the interview.
Watch “LA Times Today” at 7 and 10 p.m. Monday through Friday on Spectrum News 1 and the app.