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From Banksy to Elon to Jack: NFT Hype Cycle Fuels Massive Interest

UTC by Thierry Gilgen · 7 min read
From Banksy to Elon to Jack: NFT Hype Cycle Fuels Massive Interest
Photo: Unsplash

Crypto industry participants tend to put money wherever they can, especially when some big names are involved. But you need to be very careful to ensure that the NFT you buy has an actual real value.

There is always a first time for everything in the arts. You can come to be considered a great artist just by doing something for the very first time. Somebody put blood on a painting first. Somebody splashed paint on a blank canvas first. We’ve had a number of firsts in the NFT world lately. 

Banksy’s burning art piece. Beeple auctioned off an NFT for $69 million. Elon Musk released a song about NFTs as an NFT. Very meta. And Twitter CEO Jack Dorsey auctioned off his first tweet and raised $2.5 million for charity. 

Banksy

In a video shared by the @BurntBanksy Twitter account, a masked man enkindled the art with a lighter. That the man had nothing to do with Banksy caused a lot of controversies. Who was this person to destroy an original Banksy burnt and destroyed? The art was then sold via a digital token for $380,000. 

In the artwork in question, Morons, an original screenprint from 2006, a Christie’s auctioneer points at framed paintings in a crowded auction room. “I can’t believe you morons actually buy this,” appears on the print. 

To understand this performance art, you have to understand Banksy. Personally, I think whoever purchased the burnt Banksy has one hell of a story to tell. But, I doubt if anyone else is going to buy the token for the burnt Morons print in five years. If you’re buying a burnt picture of a Banksy, you’re basically buying a virtual story. The token has no real use case and has no value. 

We know Banksy has destroyed his own artwork in the past after an auction. That auction made the news. This auction made the news. This time around, you still have a physical leftover: burnt Banksy art. That’s the art. 

The act of destroying something is a part of modern arts. Something can be created and destroyed, and the act of doing so is art. But, what is art? It is essentially a video of what happened. How much is that video worth? And can an NFT reflect that value? 

Beeple

And then last month, 254-year-old auction house Christie’s opened its first auction of purely digital work by the artist Mike Winkelmann, known as Beeple. Beeple sold an NFT for $69 million in a first-of-its-kind auction at Christie’s. 

The story behind Beeple is great. He never thought he could sell his own artwork. His friends told him to look into NFTs and then all of the sudden he had netted $3.5 million selling art backed by NFTs. And then he sold a piece for $69,346,250 to be exact shortly after he realized this new market potential.

While there is real artwork here, as well as a trackable story, I am unconvinced that in the long term this is something which in the art industry is going to be a big thing. Yes, it’s a real artwork, but nobody will ever be able to put this on a wall. So, it’s more emotional. In a way, the recent auctions are less an art exhibition and more a use case exhibition.

Elon

Elon Musk declined an offer of $1.1 million for a tweet of a techno song about NFTs which features the lyrics: “NFT, for your vanity, computers never sleep, it’s verified, it’s guaranteed.” The video features a gold trophy emblazoned with the words “Vanity Trophy”, “NFT” and “HODL”, a reference to holding assets instead of selling them. Selling it “doesn’t feel quite right,” Musk ultimately tweeted. 

Just like that, Elon has made a joke of all this. He posted to Twitter a song about NFTs, as an NFT. It’s a joke. You’re not actually buying something. You can say you have this part of the joke or the track, but it barely reflects real world value with resale value. Elon Musk is very much pointing this out. That, while NFTs all sound great, in reality, we haven’t seen the real magic happens. 

Elon probably read the news and thought that the NFTers are selling hot air. And, he’s a pretty cool guy and has the guts to do interesting things. So, why not create a crappy video clip of a crappy song and use this hype to make a couple of bucks?

Now, I can’t look into Elon’s head. I’m not checking out what he does every day. I’m not a fanboy. But, as far as I can estimate what this guy is about, I would say that this is his way to show the people that, “Hey, guys, come on. Like, it’s cool, but…”

It’s very funny. But, in reality, I doubt that you will have a resale value on these tokens unless one day far off in the future, Elon wants to buy it back from you. But, to be honest, I doubt that he wants to buy this song back. He can create the second one in five minutes.

Dorsey

Twitter CEO Jack Dorsey appeared to offer the very first tweet as an NFT. He shared a link Friday afternoon to a platform called “Valuables,” where his March 21, 2006 tweet “just setting up my Twitter” was being auctioned, attracting more than $2.5 million as of Saturday afternoon. 

Dorsey put that into charity. Why? Because he already knows that it has no value. In reality, he’s never gonna resell that. In the case of Dorsey, I think it is cool because the proceeds are going to a good cause. But, all of these people know from the getgo that there’s nothing to get back anymore, and that’s good. That’s a really nice thing to do. 

Conclusion

At the end of the day, the hype has been created. It is a good and bad thing at the same time. On one hand, I’m really happy about the excitement NFTs have created around the industry. 

But as of now, people are just testing out this new idea. Crypto industry participants tend to put money wherever they can, especially when some big names are involved. But, realistically, you need to be very careful to ensure that the NFT you buy has an actual real value. And, that you also have a guarantee that the creator won’t change the code and turn your one-of-a-kind NFT into one-of-many.

If art collectors are ready to pay that amount for this type of art, we have seen the start of something big. But, let’s think these prices through. $69 million? That is the price one would pay for a real-world masterpiece, which sits in a gallery in a museum protected by layers of security. 

From a symbolic point of view, it’s a very significant situation. It’s great. I just doubt that it is from an art historical situation, as significant as some of the more important things that have happened in the art world. 

In the end, we’ve probably seen the same thing that we see each time when there is a new hype in the crypto industry. You see a lot of players jump in, who abuse everything for a quick buck. People jump in because Elon has anointed it like Dogecoin, or Christie’s held an auction, without thinking it through. 

From a symbolic view, the NFT auctions and other news are important. It is a cool situation. It’s very interesting to learn the details about how this newly created value can actually at some point in time go back into the pocket of the people who invested. 

Altcoin News, Blockchain News, Cryptocurrency news, News
Julia Sakovich
Author: Thierry Gilgen

A seasoned trader and CEO of automated trading platform MachinaTrader, Thierry Gilgen has highly infectious motivational energy in the trading industry. With years of experience in forming startups and understanding the hurt points of enterprises, he provides insights based on his experience. From starting from garage path lifestyle and selling websites from at home during his teenage years, his goal is to provide valuable insight to the finance industry and share his thoughts on how to build successful businesses.

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