Companies & Markets

NFT: the crypto craze over memes, tweets and pixel art

Published Thu, Mar 18, 2021 · 03:35 PM

THE recent sale of a digital artwork for over US$69 million has seemed to secure the position of non-fungible tokens (NFTs) as the new crypto craze.

An NFT is a blockchain-based record of information that is associated with a particular digital item - an image, say, or a video. Unlike cryptocurrencies, NFTs are not mutually interchangeable or easily reproduced. Instead, they act like a certificate of authenticity to the digital artefact.

While scepticism still looms over the new asset class, it is undoubtedly gaining popularity among investors.

Here are some notable NFTs sold this year:

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The photo montage sold for US$69.3 million last Thursday at a Christie's auction, breaking the record for the most money ever paid for digital art and the most expensive NFT.

It also places third behind Jeff Koons' Rabbit and David Hockney's Portrait of an Artist (Pool with Two Figures) for the most expensive work sold by living artists.

American digital artist Beeple, whose real name is Mike Winkelmann, began creating one image a day in 2007. The auctioned piece was a collage of 5,000 pictures made over the same number of days.

The individual photos include drawings of Tom Hanks punching an anthropomorphised coronavirus, a giant Nintendo Game Boy being held up by old scaffolding and a caricature of US President Joe Biden dancing nude atop the Resolute Desk. The last mentioned was uploaded to Beeple's Instagram account, @beeple_crap, on the day Mr Biden was announced as the winner of the 2020 US presidential election.

A video by Beeple of former president Donald Trump lying face-down on the grass with obscenities scrawled on his body was also sold for US$6.6 million last month. The seller, art collector Pablo Rodriguez-Fraile, bought it for almost US$67,000 just four months before.

Cryptopunk #7804 and Cryptopunk #3100

Punk 3100 bought for 4,200 ETH ($7,584,485.82 USD) by 0x7b8961 from 0x6611fe. https://t.co/3HawbYyhNZ #cryptopunks #ethereum pic.twitter.com/LAOCywVUxZ — CryptoPunks Bot (@cryptopunksbot) March 11, 2021

Two 24x24 pixel art images of teal-coloured aliens, one smoking a pipe and another wearing a headband, sold individually for 4,200 ETH (Ethereum) on March 10 and 11 respectively. This amounted to nearly US$7.6 million each at the times of purchase.

The aliens are just two of 10,000 collectible characters, known as Cryptopunks, on the Ethereum blockchain. Algorithmically generated by Larva Labs, a software company based in New York, all the crypto boys and girls are different. However, there are a fewer number of especially unique punks which take the form of zombies (88), apes (24) and aliens (9).

According to Cryptoslam, a website that monitors the sales of NFTs, Cryptopunk #7804 was originally sold for just 12 ETH in January 2018, which at the time amounted to slightly less than US$15,000. Meanwhile, Cryptopunk #3100 was last transacted in July 2017 for a meagre eight ETH or a little over US$2,000.

As at 11am on Thursday, the value of all Cryptopunk sales has summed up to US$196.5 million. In the past 12 months alone, there have been 7,382 sales averaging US$26,625 in price, according to Larva Labs.

Jack Dorsey's Tweet

just setting up my twttr — jack⚡️ (@jack) March 21, 2006

Twitter co-founder and chief executive officer (CEO) Jack Dorsey is selling his first tweet as an NFT. The highest bid is currently US$2.5 million from Sina Estavi, CEO of Bridge Oracle. However, there is still room for growth before the auction closes on March 21, exactly 15 years after the tweet was posted.

The tweet, which reads "just setting up my twttr", gained significant attention when Mr Dorsey published a link to the auction platform, Valuables by Cent, earlier this month.

Mr Dorsey later added that he will be converting the proceeds into Bitcoin and donating the money to Give Directly's Covid-19 relief response in Africa.

According to Valuables, 95 per cent of a tweet's sale will go to the original creator while the remainder goes to the platform.

On March 15, Tesla and SpaceX CEO Elon Musk also auctioned off his tweet which included a song, but retracted the sale the next day because it "doesn't feel quite right". At that point the highest offer had reached over US$1 million.

Nyan Cat

Nyan Cat has been officially transformed into an 1/1 #NFT for the #NyanCat10thAnniversary and will drop tomorrow on @withFND ! Don't miss it!https://t.co/2Gurv0IwgC#Crypto #CryptoArt #ETH pic.twitter.com/AgiRLCfZDB — NyanCat.eth (@NyanCat) February 17, 2021

The pop-tart cat with a rainbow trail flooded the Internet back in 2011. On Feb 19, the meme was sold for 300 ETH or about US$590,000 at the time of sale.

To celebrate its 10th anniversary, Nyan Cat creator Chris Torres remastered the image and placed it on a 24-hour auction on Foundation, a crypto art platform.

Despite the sale, the beloved gif can still circulate the Internet. The buyer did not obtain the copyrights to the image but simply a cryptographic hash of it.

According to Coindesk, Mr Torres' sale represents the latest permutation of the NFT industry.

"I'm very surprised with the success, but I think I'm most glad knowing that I've basically opened the door to a whole new meme economy in the crypto world," Mr Torres told Nasdaq.

NBA Top Shot

👑ALL HAIL THE KING👑@YoDough scooped up this Legendary LeBron James Moment from our Cosmic Series 1 set for $208,000‼️ This Moment is from our first Legendary set ever minted 💯The top acquisition for any NBA Top Shot Moment ... so far.Congrats on the nice pickup! 👑 pic.twitter.com/rFLMzbwXN7 — NBA Top Shot (@nbatopshot) February 22, 2021

Trading basketball cards has taken a whole new meaning. As at 11am on Thursday, NBA Top Shot has seen over 2.4 million transactions which sums up to US$383.3 million in sales. Some 79.1 per cent of this came from the last 30 days, despite the platform starting in late 2020. This seals its position as the highest sale volume crypto collectible, according to Cryptoslam.

Unlike the other items on the list above, NBA Top Shot is not a single NFT. A product of collaboration between the NBA and blockchain company Dapper Labs, it is a virtual platform where fans can buy and trade NBA highlights known as "moments". Examples of the clips include Zion Williamson blocking a shot, or Steph Curry shooting a three-pointer.

The moments also range in tiers. "Common" moments can continue to be produced indefinitely, but are still individually numbered so that no two moments are the same. "Rare" and "legendary" moments are capped at 999 and 99 editions respectively. "Ultimate" moments are extremely scarce and can only be obtained through auctions.

The most expensive moment sold to date is a "legendary" clip of Lebron James dunking from a game against the Kings in November 2019. It was bought at US$208,000 last month.