Is trading in NFTs any crazier than paying a fortune for a bottle of wine no one is ever going to drink?
If the kids complain about being bored over the long bank holiday weekend, instead of packing them off to the park, consider instead encouraging them to create some digital art.
That worked unbelievably well for 12-year-old Benyamin Ahmed of London, who knocked up 3,350 pixellated pictures of “weird whales” and sold them in the non-fungible token (NFT) marketplace for a cool £290,000 or thereabouts.
OK, the payment was in the Ethereum cryptocurrency, so by the time you finish reading this article his windfall may be worthless or worth several million pounds but even so, stories such as this are sure to get the attention of get-rich-quick aficionados.
It is not clear whether the craze has met the taxi drivers test, which states that once the majority of cab drivers start talking about an investment it is time to move on to something else, but judging by the upsurge in NFT sales in August suggests that it is definitely “a thing”, as the youth used to say.
Sales volumes recorded on the largest NFT trading platform, OpenSea, have hit US$1.9bn so far this month, the Reuters news agency reported this week. That’s more than ten times March’s US$148mln and more than 237 times the monthly volume recorded on the platform in the first month of this year.
Open Sea said the sharp increase in sales activity has been driven by secondary market sales.
NFTs are unique digital assets created using blockchain computer code that can be traded and which have no intrinsic value. If this sounds crazy, stop and consider whether it is any crazier than a collector paying a fortune for a vintage wine that no one will ever drink (thankfully, because century-old wine probably tastes horrible).
The vintage wine collector gets to look at his or her bottle of wine and wonder how it would taste. The NFT owner also gets to look at his or her asset and in some cases, wonder what alcohol will taste like when they are finally old enough to legally sample it in a pub or bar.