Even if your inbox includes nary an art market newsletter, these days you’re likely drowning in hyperbolic headlines about NFTs of this, that, and the other thing selling for multi-millions. Like the rest of us, you do a little google, get a little info…..and still have no idea what in the ham sandwich it’s all about. So today we bring you the LLA PSA, NFT edition. We’re here to answer the questions that niggle at the back of your mind, even after NFTs have been explained three ways to Sunday. We’ve got you.
First the basics, just in case you skipped the little google. If you did the google, you may proceed directly to the Niggling Questions. NFT stands for “non-fungible token.” The “token” is not just the piece of digital media (say, an early Michael Jordan video clip, a song, or an animated space-agey flower or whatever), but rather the code attached to that media that says it is an authentic original and to whom it belongs. These “tokens” are not interchangeable (whereas one bitcoin, like a dollar bill, is interchangeable with any other bitcoin), hence the “non-fungible.” Because heaven forbid they just call them “non-interchangeable tokens.” Like bitcoin, however, the tokens are built onto a blockchain so that they are counterfeit-proof and not replicable. The tokens and the media are bought and sold via online NFT marketplaces such as Nifty Gateway, Rarible, MakersPlace, Foundation, OpenSea, and others. Which leads us to our first niggling question:
What do you actually get when you buy an NFT?
The concept of what you get when you buy an NFT is the metadata (data that describes other data) on the blockchain that contains the signature of the digital media’s maker (artist’s signature if you will), the authentication of that media, and the record of your purchase of it. So yes, you own a high quality file of that artwork or video or song, but more importantly you own the “token” that SAYS you own it and that it is original.
But what do you get in real life, not in conceptual life? What actually happens in your inbox or wherever when you buy an NFT? In order to answer this question to our own satisfaction, we bought an NFT. We used the site Nifty Gateway, which in recent days partnered with Sotheby’s on their first NFT art auction. Nifty Gateway is one of the NFT marketplaces that allows buyers to make purchases in dollars OR cryptocurrency (the cryptocurrency of choice on most NFT sites is ether, the currency of Ethereum). Some others only allow purchases to be made in ether.