Page Contents 👉
- 1 No Fleeting Trend
- 2 WTF are NFTs?
- 3 More Than Just Jpegs
- 3.1 1. Everydays: The First 5,000 Days – artwork by Beeple, $69.4 million
- 3.2 2. CryptoPunk #3100. $7.6 million (4,200 ETH)
- 3.3 3. CryptoPunk #7804. $7.5 million (4,200 ETH)
- 3.4 4. Jack Dorsey’s First Tweet – Latest bid $2.5 million
- 3.5 5. CryptoPunk #6965. $1.6 million (800 ETH)
- 3.6 6. CryptoPunk #4156. $1.3 million (650 ETH)
- 3.7 7. CryptoPunk #2890. $1.2 million (605 ETH)
- 3.8 8. CryptoPunk #6487. $1.1 million (550 ETH)
- 3.9 9. Hashmask #9939. $844,000 (420 ETH)
- 3.10 10. CryptoPunk #2140. $804,000 (400 ETH)
- 4 Some Honourable Mentions
- 5 NFTs – Just Getting Started
No Fleeting Trend
We need to talk about NFTs. Everybody else is and the hype surrounding them is almost impossible to avoid. The pandemic is still with us, bitcoin is starting to break out of its recent slump, the Oscar nominations have been announced and yet NFTs are still making the headlines.
To some, NFTs represent the latest evolutionary stage of cryptocurrency: a new and ingenious way to break from traditional asset classes. To others, they’re a senseless bubble and yet another way of parting fools from their money. The debate is raging and isn’t likely to die down anytime soon. Even Guy himself is getting curious.
Added to all this hype are the customary complements to any crypto-related story: some truly eye-watering sums of money. Crypto doesn’t do small numbers and NFTs are duly getting with the program, with some changing hands for the sort of prices to convince many that the world may finally have lost its mind.
Today we’re going to dive into that ocean of money and look at the most expensive NFTs to date. Some of you will be nodding your heads in admiration, others shaking them in despair. To some NFTs are like the cavalry riding in to save the day, to others they’re the firth horseman of the apocalypse. But for many, at this stage anyway, they might still be a total mystery…
WTF are NFTs?
If you’re already in the know as to what NFTs are, then good for you and feel free to skip ahead to the next section. Those not yet up to speed, read on.
NFT stands for non-fungible token and let’s clear up the question of fungibility before we go any further. If an asset is fungible, then it can be freely exchanged with another asset of the same denomination.
The best example here is a dollar bill. The dollar in my pocket is worth exactly the same as the dollar in your pocket: they are fungible. One bitcoin is the same as another bitcoin: they too are fungible, regardless of whose wallet they’re in, or what price they’re trading at.
Non-fungible assets therefore have a unique value. Take football trading cards as an example here. A card representing Paris Saint-Germain forward Kylian Mbappé (signed for €180 million in 2018) is almost certainly worth more than the one for Fulham FC midfielder Joe Bryan (signed for a little under €7 million in the same year). Both are trading cards representing people much better at football than any of us, yet they have different values to a collector. They are non-fungible.
An NFT is a digital representation of an asset that stores information about said asset, including who owns it. The NFT itself is stored on a blockchain, which means that the information it contains cannot be altered or destroyed. Almost anything can be represented by an NFT, including artworks, title deeds, web domains, collectables audio files and even people’s identities. Ownership of the NFT can denote ownership of the asset it represents, though not necessarily the copyright to that asset.
It’s here that NFTs can start seeming nonsensical to many. I could own an NFT representing a jpeg file of Picasso’s Guernica painting, but that wouldn’t mean I owned the original painting and I couldn’t stop others from distributing images of it online or elsewhere.
What seems even crazier is the fact that many people have been willing to pay huge sums of money for NFTs representing ‘artworks’ that aren’t… well, aren’t really any good. Art is of course subjective and what may seem like a load of crap to one person may be a work of staggering genius to another, but the fact remains that artists are able to create works in minutes and sell them as NFTs, despite them having little to no real value.
But this isn’t to say that NFTs are no more than a big old scam. They do have the potential to be a force for good, allowing artists to profit from their work without the intervention of middlemen like dealers and galleries. Because NFTs are built using smart contracts, they can be coded to ensure that, if sold on, the creator can automatically be granted a proportion of the profits. In this way, artists can continue to earn a living from their work.
More Than Just Jpegs
The use cases for NFTs extend well beyond the sphere of art. Collectables and gaming are being revolutionised by the ability to own unique digitised assets in much the same way as one can own one-of-a-kind items offline. Those football cards we touched on earlier as an example are now traded and collected in digital versions, each represented by its own NFT.
Collectors can use marketplaces like Sorare to buy and trade these cards, as well as use them to make their own fantasy football teams to compete against other collectors. Some cards change hands for considerably more than others, but those trading them know that the ownership, as well as the transaction history of the cards they hold are immutably recorded and stored. The blockchain history of each card also guarantees its authenticity, so fakes or duplicates cannot be made to dupe the unwary.
Similarly, NFTs can be used to denote ownership of in-game items in online games and virtual worlds. So if a gamer splashes out on a souped-up new weapon for their avatar, their ownership of it can be represented by an NFT. Assets like these can then be traded, allowing their owners and/or creators to monetise the time they spend in the game.
This ability for a player to earn an income from the time and effort they put into a game is a big selling point, especially for virtual world platforms like The Sandbox and Decentraland. In both of these, players can buy and develop parcels of in-game land, which can then be rented out, developed or even used for advertising space. All this exchange of value is accomplished through the use of NFTs and drives greater levels of engagement with the games.
Just as blockchain’s potential is still to be fully realised, so too is that of NFTs. There is speculation that personal records could one day be tokenised, to be held in a digital wallet much like cryptocurrencies. Or for property rights to be held in a similar way, without the need for all the myriad of custodial organisations that currently handle such storage.
That may all be some way off. For now, all the talk around NFTs is centred on the crazy prices that some of them have been commanding. So, let’s take a look at the ten most expensive NFTs so far. It could be that, while some of these sums paid out may one day prove to be wise investments, others may only seem crazier with time. Let’s take a look at what all the fuss is about.
1. Everydays: The First 5,000 Days – artwork by Beeple, $69.4 million
If the NFT sector was hotting up in early 2021, then on 11th March it went thermonuclear. On that day, in an online auction manged by ultra-posh London auctioneers Christie’s, a digital collage by Mike Winkelmann – better known as Beeple – sold for a shade under $70 million dollars to a collector from Singapore.
Yes, you are reading that correctly. A jpeg file – not existing in any physical form – sold for more than works by Titian or Raphael and put its creator behind only Jeff Koons and David Hockney in terms of the price paid for a work by a living artist. When you put it like that it seems completely insane. Unsurprisingly, many in the art world remain unimpressed.
The work itself is a collage, created using 13 years-worth of images, which Beeple created on a daily basis during that time. It may be an encrypted jpeg, but a lot of work has gone into it. Beeple himself has not suddenly appeared as if from nowhere. He has worked with the likes of Apple, Nike, Justin Bieber and Katy Perry and his usually sci-fi influenced work has gained him many fans over the years. It’s unlikely though that anyone saw this coming.
The buyer remained anonymous at first, before being revealed to be the founder of the crypto fund Metapurse, going by the pseudonym MetaKovan. In a statement released by Christie’s after the auction had ended, he said:
‘Techniques are replicable and skill is surpassable, but the only thing you can’t hack digitally is time. This is the crown jewel, the most valuable piece of art for this generation. It is worth $1 billion.’
While many may interpret this, especially the last part, as wishful thinking, MetaKovan could still be proved right. Art – like anything else – is worth only as much as others are willing to pay for it, but if NFTs live up to their potential then Everydays: The First 5,000 Days could theoretically increase in value over time. In the meantime, whether it turns out to be a wise investment or a colossal waste of money, it certainly has got people talking about NFTs.
2. CryptoPunk #3100. $7.6 million (4,200 ETH)
So we come to CryptoPunks and enter the world of digital collectables. CryptoPunks are, according to their creators at Larva Labs, a set of ‘10,000 unique collectable characters with proof of ownership stored on the Ethereum blockchain.’ They first appeared in 2017 and were handed out for free to anyone with an Ethereum wallet who applied for one in time. Each one is unique, though some quickly became more highly valued than others.
A secondary market for these CryptoPunks sprung up, with nascent NFT technology making it possible to sell and trade them. The fact that only 10,000 were ever made and that each one was immutably stored on the Ethereum blockchain made them increasingly sought-after, culminating in #3100 changing hands for north of £7 million a few days ago. Not bad for something that was given away for free a few years before.
The CryptoPunk craze is not dissimilar to that of CryptoKitties, which launched around the same time and was at one point responsible for slowing down the entire Ethereum network. These cute, customisable digital cats commanded some pretty insane prices themselves, with some changing hands for hundreds of thousands of dollars. Their prices have since been dwarfed by the CryptoPunks, but people still do pay good money for the rarest ones.
3. CryptoPunk #7804. $7.5 million (4,200 ETH)
This pipe-smoking bad boy briefly held the record for the most expensive NFT ever sold, before being overtaken a day later by #3100. Both changed hands for the same amount of ETH, but a rise in the ETH price (a not uncommon event) saw the later sale win out.
4. Jack Dorsey’s First Tweet – Latest bid $2.5 million
If the Beeple collage and CryptoPunks sagas haven’t awakened your sense of the surreal, then perhaps this next NFT will. Jack Dorsey, the luxuriantly-bearded founder of Twitter, is currently in the process of auctioning off his first-ever tweet as an NFT. And the winning bid so far stands at $2.5 million with five days left to go. Yes, once again, you did read that right.
Dorsey’s tweet is being sold on the NFT auction site Valuables, with the proceeds to be instantly converted into BTC and given to charity. According to the site’s FAQs, the winner of the auction will get a ‘digital certificate of the tweet’, with the original to remain viewable on the internet as before.
Valuables has an interesting answer to the obvious question of why anyone would want to pay to own a tweet:
‘Owning any digital content can be a financial investment, hold sentimental value, and create a relationship between collector and creator. Like an autograph on a baseball card, the NFT itself is the creator’s autograph on the content, making it scarce, unique, and valuable.’
In this way, NFTs represent the same obsessions that people have always had with owning certain things which they perceive to have value. Some people still set great store by owning postage stamps and are willing to pay huge sums to fill gaps in their collections. To most of us, this seems like a waste of money, but not to the collectors. The person bidding $2.5 million to ‘own’ Jack Dorsey’s first-ever tweet either feels that someone else will be willing to pay more for it one day or else feels the same way about tweets as a stamp collector about stamps.
Although a digital asset isn’t a tangible thing, does that make it any less valuable as an investment? It’s easy to laugh at those putting forward these huge sums, but if these assets increase in value, it’ll be them doing the laughing further down the line.
5. CryptoPunk #6965. $1.6 million (800 ETH)
Ok, so CryptoPunks are going to dominate the rest of this list, so we’ll run them down quickly before touching on some other NFTs that are generating a whole lot more interest. To the untrained eye, there might not be much to differentiate CryptoPunk #6965 from #7804, #3100 or indeed any of the other CryptoPunks. If you agree with that statement then congratulations, you’ve just saved yourself a whole lot of ETH
6. CryptoPunk #4156. $1.3 million (650 ETH)
Like CryptoPunk #6965 but with a blue bandana instead of a brown hat. Which apparently knocks $300,000 off the price. Hey look, nobody said any of this was going to make sense.
7. CryptoPunk #2890. $1.2 million (605 ETH)
Almost identical to the second most expensive NFT ever sold, but still worth $6.4 million less. One can only imagine the owner is crying themselves to sleep on top of a big pile of money somewhere.
8. CryptoPunk #6487. $1.1 million (550 ETH)
To reiterate, this is a handful of pixels that was given away to someone who wanted it back in 2017.
9. Hashmask #9939. $844,000 (420 ETH)
Wait, what? Stemming the relentless tide of overpriced CryptoPunks is a piece of digital art created by one of 70 artists working with Switzerland’s Suum Cuique Labs. It describes the creations thus:
Hashmasks are not a simple collectible, though, they are art. And art is not systematic. It is enigmatic. As the foremost blend of intelligently designed collectible items and artistic creation, many Hashmask traits or attributes are not explicitly accounted for. It encourages the consumer or rather the collective consumer to project his or her interpretation of value into the artwork.
Nope, me neither. It seems that ownership of the NFT then allows you to accumulate name changing tokens (NCTs) which then allow you to give the artwork you own a name which will forever after be stored on the Ethereum blockchain.
Hashmask #9939 has been named ‘sex’ by its creator, which makes about as much sense as anything else to do with the project. Still, at least it’s not a CryptoPunk.
10. CryptoPunk #2140. $804,000 (400 ETH)
And we’re back to CryptoPunks. Thank God.
Some Honourable Mentions
The above may have commanded the highest prices so far, but with the exception of Beeple’s collage and Jack Dorsey’s tweet, they haven’t attracted much publicity. Some other NFT projects have though and could well start to displace some of those pixelated punks before long.
At the beginning of March this year it was announced that musician, artist and Elon Musk-consort Grimes had sold several NFTs with a combined value of $6 million. None of the individual works fetched enough to merit a spot on this list, but other artists will doubtless have been encouraged to dip their toes into the NFT waters as a result.
Another eye-opening NFT story concerns rapper Azealia Banks selling her audio sex tape as an NFT for $17,000 to artist Rulton Fyder – who has since relisted it for sale at $260 million. If he gets his asking price, or indeed anything close to it, then this list will need updating.
For those whose listening tastes are a little less spicy, rock group Kings of Leon recently announced that their new album, When You See Yourself, would be the first ever to also be released as an NFT, alongside the more traditional formats.
The band released three different tiers of NFT, each of which unlocks additional rewards such as front row tickets when the band next play live, as well as exclusive artwork and the chance to own a limited edition vinyl copy of the album. The NME recently reported that the NFT sales had generated around $2 million in revenue, suggesting that other artists will inevitably follow suit.
While musicians and artists wake up to the potential of NFTs the collectables market isn’t standing still either. CryptoPunks may still be commanding the top prices, but vastly more revenue is being generated by NBA Top Shot, which sees classic moments from NBA history tokenised and sold as collectables in the same way as football cards.
It isn’t only basketball getting in on the act either. Socios is offering fan of other sports a way to interact with their favourite teams via NFTs through its partnership with blockchain platform Chiliz. These Fan Tokens will give holders the chance to vote on issues affecting their teams as well as get access to matchday experiences and merchandise.
NFTs – Just Getting Started
To many, NFTs are a bubble that must surely burst. It’s hard not to agree at times, especially when you see collections of pixels changing hands for millions of dollars. These big-ticket buys may suggest that the world has finally lost its mind, but look beyond them and a different story emerges.
The worlds of gaming, collectables, art and music are all starting to embrace NFTs and it looks like they’re getting along famously. The idea of owning something entirely digital may seem absurd to those of a certain age, but to those who already spend large amounts of their lives online in one form or another, it makes perfect sense.
Just because something doesn’t physically exist doesn’t mean it can’t be owned, or that someone else might someday be willing to buy it from you for more than you paid for it.
That said, expect sales of digital photo frames to start going through the roof.
Featured Image via Shutterstock