Social Media | Crowdsource | Research and Analysis | Fanocracy
An original Banksy titled Morons was purchased for about $100,000, destroyed (burned on a livestream) and turned into a non-fungible token (NFT) which sold on Sunday for 228.69 ETH (approximately $380,000 at the time of the transaction). What a remarkable offline to online transformation!
I first learned about this on the NFTs.tips Clubhouse discussion on Friday with Burnt Banksy, the person responsible. It took me a while to wrap my head around what had actually happened. Yes, this is certainly fascinating, but as an art lover it’s also a bit disturbing.
I’ve been working my entire career to move the traditionally offline to online. Starting in the late 1980s, I worked in the real-time news business, creating services for Wall Street professionals. Starting in 2002, I’ve been running my own business writing, speaking, educating and coaching about online marketing and business growth strategies and tactics. I also have a portfolio of angel and early-stage investments in companies that are disrupting their industries by bring business online.
So, yeah, I get the offline to online thing. I thought I had seen it all. Nope.
Burnt Banksy says: “By removing the physical piece from existence, and only having the NFT, we can ensure that the NFT through the smart contract of the blockchain ensures that no one can alter the piece and it is the true piece that exists in the world.
Blockchain, cryptocurrencies, and NFTs
Some of the language and terminology of this new world can be confusing. If you’re interested in learning more, a bit of reading and perhaps a purchase of an NFT of your own will quickly educate you on what all the fuss is about. (Some suggested reading at the bottom of the post).
I see many potential uses of these technologies for businesses in the coming decade such as crypto facilitation of micro-transactions or the monetization of digital assets.
Heck, if Jack Dorsey can list the NFT of the very first tweet (current offer price USD $2.5 million) maybe you have something valuable too!
Consider the band Kings of Leon. They’re offering collectable NFTs of digital art such as this composite created from the shadows of all four band members captured for album artwork along with KOL’s iconic Cherry in gold.
I love this form of Fanocracy, letting fans own a piece of Kings of Leon. The band is also offering various perks related to their new album release as NFTs.
Or you can buy NFTs of NBA Top Shots such as a $208,000 video clip of LeBron James dunking.
The Banksy piece was turned into a non-fungible token, which is an entry into the blockchain ledger, basically its unalterable address on the web. It can be bought or sold using cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH) which are also entries in the blockchain.
The term “non-fungible” means something is one-of-a-kind, like the NFT of the Burnt Banksy painting. Since digital files such as digital art or a video clip can be copied, the NFT of that digital file represents the unique one-of-a-kind ownership of the asset.
On the other hand, cryptocurrencies represent fungible assets. One bitcoin is the same as another bitcoin just like the $20 bill I pay to buy a coffee at Starbucks is worth the same as the $20 bill you use. (Does anyone pay cash at Starbucks anymore?)
NFTs have surged in popularity recently. For example, you can own and collect CryptoKitties, one-of-a-kind digital images of kitty-cats that cannot be replicated, taken away, or destroyed. Think of CryptoKitties as sort of like the digital version of Beanie Babies but with each collectable being unique.
You can even own virtual real estate and digital land.
Getting started and learning more
To jump into the NFT market, you will need to purchase cryptocurrency, have a digital wallet to store it in, a way to move it, and an exchange to buy the asset you’re interested in.
Since the blockchain is decentralized, you will need to do a lot of initial setup to get the various platforms to talk to one another. Budget at least an hour to set everything up and a few days for your initial crypto purchase to clear. Here are a few places to get started:
Coinbase is a San Francisco-based platform to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.
OpenSea is peer-to-peer marketplace for rare digital items and crypto collectibles. It's kind of like eBay for digital assets. I enjoy browsing the available NFTs and have purchased several low-priced works of art myself. Throughout my life, I’ve always supported artists – musicians, writers, woodworkers, painters, and the like, so I feel the same pull to support digital artists.
Some of the better resources I dug into this weekend as I was writing this post:
The Hustle: Why NFTs are suddenly selling for millions of dollars
Forbes: What Is An NFT—And Should You Buy One?
Seth Godin: NFTs are a dangerous trap
Decrypt: An Original Banksy Has Been Burned and Turned Into an NFT
NFTs.tips site and Clubhouse conversation
Please share in the comments if you’ve created or purchased an NFT and what the experience was like!
