What the F is an NFT?

If you have ever been on a boat long enough, you suddenly realize there is a “boating” language.  Similarly, the brave new world of NFTs brings with it its own vocabulary and it is not a language easily learned.

Ergo, we will try to keep this simple.  NFT which stands for “non-fungible token” is a unique, digital collectible that exists on an open, decentralized network of computers across the globe which work in real time to verify and authenticate the token. NFTs are non-fungible - meaning it is one piece and it can not be interchangeable into separate parts.  For example, a boat can not be split in half and still have the same value.  The boat is one vessel.

Let’s say our NFT is the “Miami Boat” NFT. Where do we buy this NFT, how do we know the “Miami Boat” NFT is not stolen, and can we get a clean title? 

Now, we are ready to start the engine and give the boat a spin to see if we want to buy the “Miami NFT Boat”.  We must ensure the money is our “bank account” or, in the case of our NFT, we must ensure we have some form of payment in our digital wallet which is a cryptocurrency such as Bitcoin, Ether etc. Which cryptocurrency depends on what currency the bank accepts. In the “Miami Boat” NFT case the bank is “Open Sea” and it currently accepts Ether as the medium of exchange or “currency” of choice for NFTs.

The great thing about our “Miami NFT Boat” is she is one-of-a-kind and uniquely authenticated through a unique alphanumeric code on a blockchain.  Like the title, the alphanumeric code is a certificate of authenticity that validates the digital art as legitimate and original. It is on a blockchain. It is not stolen and the title is clear.

But wait…there’s more.  If you opt to buy the boat, you must put gas in the tank to whisk off into the sunset. And if you are  buying an NFT, there is likely a “gas fee” as well.  That gas fee is no different than your pain at the pump these days.  The more demand there is for NFTs, the more energy it takes to “mine” the cryptocurrency; therefore, the gas fee goes up.  With less demand for NFT transactions, there will be a lower “gas fee”.  And, yes, it is actually a transaction fee called a “gas fee”.  Don’t let the sticker shock deter your from adventuring into the open sea of NFTs.

Open Sea, you ask? This is where the NFT wave riding begins.  If you set your sails into the wind for digital art, there is a plethora of digital collectibles to navigate. Open Sea is just one of the “NFT banks” where you can buy NFTs, aka digital collectibles, of all kinds.

The art world has been slowly moving their compass toward the digital world. Here in Miami, the owner of the popular nightspot Club Eleven purchased an NFT called “Bored Ape #11” from the Bored Apes Yacht Club - the hottest cultural NFT collection in the world - for $396k dollars. Likewise, in the wake of NFT excitement, Eminem purchased the “Bored Ape #9055” NFT from the same collection a few days later for a cool $460k dollars.

But the real Slim Shady is Mike Winkelmann - a digital artist better known as Beeple. “Everyday - the first five thousand days” is his masterpiece of 5000 digital works created for his “Everydays”series. Its associate NFT is a collage of his first thousand days of images he collected to create the most expensive NFT at the time - having sold at a Christies auction house for $69.3 million. Not to worry, there are much more affordable NFTs for purchase.

Above: Images from the Bored Ape Collection #11 and #9055 respectively.

“Puzzled” NFT

In full disclosure, I too, put my money in a digital wallet, ponied up the gas fee, and purchased my first NFT by Baley Billy Bodden on Open Sea at the beginning of 2022 pictured on the right.

As with other assets, buyer beware. I recommend due diligence in the NFT acquisition process. For more information, read the Wall Street Journal piece “Open Sea’s NFT Free-for-All” published on February 12,2022.

Miami’s most recent art evolution is reflected in the newest category of art at the 58th Coconut Grove Arts Festival happening this weekend, February 19-21, 2022, in Coconut Grove, Florida. For the third time, digital art is a vetted category. And for those eyes on the open sea of clear waters, the famed Miami Boat Show 2022 coincides with the Coconut Grove Arts Festival.

If these two exciting festivals can coexist, so too can classic canvases and digital collectibles.

If you have any question about this or other information on this site, please reach out via the contact page or visit my instagram account @traecollection.