Are NFTs the New Beanie Babies?
By Betsy Burton
I am sure you all remember the beanie baby craze; those cute little collectible stuffed animals from the 1990s. I remember a friend telling me she was investing in Beanie Babies for her kid’s college tuition. Well, with a few exceptions, Beanie Babies are, at most, worth under $100. Fun and cute, but not the investment collectors dreamed of.
Now we have NFTs. NFTs (non fungible tokens) are digital assets that represent real-world objects such as art, music, in-game items and videos. For the most part, NFTs are bought and sold online with cryptocurrency. In addition, they are encoded with a digital identity with the same underlying software as many cryptos.
What is Cool About NFTs for Buyers
NFTs offer buyers the opportunity to purchase limited-edition digital versions of a piece of art, music, in-game items and videos that they like. For example, you can buy the Derek Jeter Mystery Container. You can buy an NFT art showing Streets of Orleans with a limit of a single buyer for $12 thousand. You could buy a single edition visual media art piece that shows the creation of a batman painting by Trevor Jones and José Delbo for $37 million.
The other cool aspect of NFTs is that museums and media companies are creating visual art shows with NFTs. For example, the Verse show combines NFT art with AR technology to offer its attendees an immersive experience with this art form.
What is Cool About NFTs for Content Creators
For content creators, NFTs offer a mechanism for them to bring their work to a huge potential audience base, and dramatically increase their visibility and potential sales. For example, Beeple (a.k.a. Mike Winkelmann) was an unknown graphic artist until his work started selling as NFT for $65 million.
Another huge benefit of NFTs to content creators is that they often get 85% of the primary sales price for their work (versus most art galleries that take 60% and give the artist 40%). And the content creator is paid 10% of the sales price in perpetuity each time the piece is sold through a secondary channel.
What is Not So Cool About NFTs
Like creating any art, film, music, etc. there is, at best, a 1 in 10 chance that it can provide a decent living, let alone make somebody rich. So, the chances of making it rich as an NFT artist are still pretty low. There are many examples of NFT works being sold for a small amount.
Let’s face it, there is a lot of hype about buying and selling NFTs. Some of the very innovative art, film and graphics are worthy of the hype, but much of it is more for casual entertainment.
Are They Worth the Investment?
I have been involved with artists for years, and my general view is that if you like a piece of art, film, music, and have the means, then buy it and enjoy it. I would never buy a piece that I didn’t really like. But the same could be said for Beanie Babies; if you like it then buy it.
There will be some limited number of people who are able to invest in NFTs and make a significant amount of crypto. But unless you are willing to put in the time, education and money to be an NFT investor, the chances of getting rich are pretty slim.
NFTs are an exciting new medium for selling and buying art, music, in-game items and videos. If you like a piece, then buy it. Not because you think the price is going through the roof, but because it gives you pleasure and entertainment.
What is particularly interesting will be what is next with all this NFT data out in the world. How will it change media, entertainment, gaming, sports, movies and education in the long term? Will they change how movies and sports are created and viewed?
Once we move beyond the immediate interest and hype of selling and buying NFTs to actually using and integrating NFTs, they will likely have a more significant impact.