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There's been a lot of buzz about NFTs and their impact on the digital art and collectibles world.
In the last two weeks we've seen:
A CryptoPunk sell for over $1m
Christie's announce their first digital art auction and accept payment in ETH
Insta influencer Logan Paul selling over $5m of NFTs in a day
The sale of a Beeple artwork for $6.6m, breaking the record for a single NFT sale.
Let me repeat that, $6.6m for an original animated GIF.
That should clear up any doubt that digital art is here to stay and taking center stage. With time, we'll stop referring to it as digital art and call it, art.
The question that I continue to get asked over and over again though: why would anyone pay for something that is so easy to copy? What's the point?
In my previous post, I spoke about the fact that NFTs prove IP ownership, rarity and originality. You can make a perfect replica of the Mona Lisa or one thousand prints of it, but there will only ever be one original.
To prove this point, last week we saw this thesis playing out. A new project BinancePunks (aka Bunks) launched. BinancePunks is a direct rip-off of the now famous CryptoPunks.
When I say it's a direct rip-off, I mean its a carbon copy. 10,000 BinancePunks of 24x24 pixel sold for 1 BNB and minted to whoever purchased it. The Bunks look exactly the same as the CryptoPunks and follow the same rarity and attributes. The only difference is that it’s built on the Binance Smart Chain network instead of Ethereum.
To my surprise, the Bunks sold out in less than an hour and the rip-off project raised $2.5m. My guess is that most of these buyers are speculators hoping for a quick flip. There is now a secondary market for Bunks but it’s fetching a fraction of the amount of the original CryptoPunks. If I were to bet, I'd bet that they wont take a hold and will be a dead project in less than a year.
In the physical world, fakes exist because they're often very hard to prove that they're fake. They can look and feel identical to the original. In the NFT world though, proving the fake is as simple as looking at the smart contract address.
Nobody wants to own a fake that is easily identifiable as one. Even if that fake looks and feels exactly like the original.
CryptoPunks is that original. They will be forever considered the OG that kicked off the collectibles world. With time, their legacy and story will only appreciate in value. BinancePunks however, will forever be the fake.
So back to the question, why would anyone pay for something that is so easy to copy?
Well if the story of BinancePunks is anything to go by. It’s the ability to prove provenance, ownership and originality in the digital world. This is the value of NFTs and this is why they are here to stay.
Next week I’ll be diving into the world of NFT audio and the impact it is having in the music world. If you want to get a head start on that post, check out EulerBeats - it’s fascinating.
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De-Bunks: the easy to copy NFT myth