In February, a 10-second video clip known as “Crossroads” by the digital artist Beeple sold at auction for $6.6 million. An animated image of a flying cat leaving a rainbow trail went for almost $600,000 that same month. A video of a LeBron James dunk sold for a mere $200,000. What do all these have in common? Each is an example of a non-fungible token, and the boom in digital art they have set off.
Think of them as digital certificates of authenticity. A non-fungible token, or NFT, is a unique, irreplaceable identifier created by an algorithm: A distinct barcode for a digital piece of art or collectible. It’s a solution of sorts to a problem that’s long faced digital artists: how to create scarcity for an item that can be infinitely reproduced. Uniqueness is the reason (ok, one reason) that the Mona Lisa is priceless, while a signed and numbered Peter Max print of his version of the Mona Lisa is $5,500 and Mona Lisa posters are $9.95. Money is fungible, meaning that any dollar bill serves its purpose as well as any other one. Images of the same GIF or meme are fungible -- unless yours comes with an NFT declaring it to be the “real” version.