Non-fungal tokens have been around for almost two years, but this NFT from Ethereum and other blockchains is suddenly becoming a more popular way of collecting visual art, whether it is animated cats, NBA clips, or virtual furniture. “Suddenly” is not a big deal. In the second half of last year, FF $9 million worth of NFT products were sold to buyers, according to Cointelegraph outlets; During a 24-hour window earlier this week, $60 million worth of digital products were sold.
What is going on? Wisconsin Dad, Wisconsin Dad, whose digital drawing he has created every day for the past 13 years, a New York Times piece about the trend earlier this week, probably sparked new interest like sold. If you need further proof of a tipping point (and that is enough for now), this is the first sale of a reputable auction home exclusive digital work.
To better understand the market and why it is booming in real time, we spoke this week with David Pakman, a former internet entrepreneur who joined the Venrock initiative a dozen years ago and started tracking Bitcoin, even digging up cryptocurrency in his Gulf region. Area Home will start in 2015. (“People would come and see the rack of computers and it was like, ‘This is hard to explain.'”)
Perhaps not surprisingly, he was soon convinced of NFT’s promise, persuading Venrock to lead the round in a $15 million series for young startup Duper Labs, when his initial offer was cryptocurrency, a limited edition digital. Bought with and breeding. While the idea was somewhat shocking at the time, Pakman has long seen that dapper offerings would be much broader, and indeed, a recent dapper deal with the NBA to sell collectible highlight clips has already attracted so much interest that Dapper is rightfully new to the next- $2 billion post-valuation. The fund is now raising $250 million.
TC: David, the dumb thing is down for us. Why is the world so gong-ho about NFT right now?
DP: One of the biggest problems with crypto – it’s scaring so many people – is that it uses all these really mysterious terms to explain a very basic concept, so let’s just keep it simple. About 40% of people collect things – baseball cards, shoes, artwork, and wine. In addition, there a whole bunch of psychological reasons for this. Some people need to complete a set. Some people do it because of investment. Some people want to start a legacy. However, we can only collect things in the real world because digital collectibles were very easy to copy.
Then came the blockchain, and [it allowed us] to make digital collectibles immutable, including a record of ownership of what you cannot copy. You can do screenshots of it, but you are not digitally collectible, and you will not be able to do anything with that screenshot. You will not be able to sell or trade it. The proof is in the blockchain. Therefore, I was convinced that crypto-based collectibles could be big, and in fact, it could be something that took crypto to the mainstream and made it commonplace to participate in crypto – and that is what is happening right now.