I read about this new phenomenon for hours so you don’t have to
Photos courtesy of Bored Ape Yacht Club
February 22, 2022
Recently, NFTs, or non-fungible tokens, have been the subject of widespread attention online. Many may be familiar with NFTs through critical internet memes about colorful primate characters. Surprisingly, according to Dan Milmo of The Guardian, $22 billion dollars were exchanged in 2021 over these digital items. Even celebrities like Post Malone, Jimmy Fallon, and Justin Beiber have gotten in on the craze. So what is the “Bored Ape Yacht Club,” and is this trend just monkey business?
At its core, an NFT is a digital item that is completely unique. Non-fungible means that the NFT cannot be replaced. But if NFTs often take the form of digital files, and most commonly digital images and art, shouldn’t anyone with a computer be able to copy an NFT? The answer is yes, however, that doesn’t make them less unique. When someone purchases an NFT, they aren’t exclusively purchasing that file, but rather the ownership of that file. To understand this concept better, think of traditional artworks. There is only one original Mona Lisa, but there are hundreds of prints available online.
NFTs exist because of blockchains. For those unfamiliar, a blockchain is a digital record of transactions. Blockchains are what allow some cryptocurrencies, or currencies without a central regulating authority like a government, to function. A buyer’s ownership of an NFT is represented by unique data stored in the blockchain that cannot be replicated. This data is assigned when an NFT is created, or “minted.”
NFTs are commonly bought and sold through online marketplaces, the most popular being called OpenSea. These sites operate like any other auction site where visitors can view what is selling, place bids, and list their own NFTs for sale. Because NFTs are often artworks such as images or videos, their sale has been compared to art collecting.
Many NFTs are created and sold as part of collections, or large batches of visually similar images with decorative variations. This allows for NFT trading to have a social element. Verified owners of certain NFTs can join NFT clubs to associate with other like-minded individuals.
Perhaps the largest NFT club in the public consciousness is known as the “Bored Ape Yacht Club.” Bored Ape Yacht Club launched on April 30, 2021, with 10,000 NFTs depicting cartoon apes with various accessories and characteristics. Purchasing one of these NFTs grants entry into a “swamp club for apes,” where owners can chat online and even attend parties and events. Many owners change their social media profile images to show off the Bored Apes they have purchased, which allows them to associate with each other more easily. After all, there is a certain level of prestige to be associated with the Bored Ape Yacht Club—the cheapest Bored Ape currently sells for 116.9 ETH cryptocurrency, or about $295,000, according to cryptobriefing.com.
Are NFTs worth the investment? It is difficult to say how much prices for them can fluctuate, but their potential for huge sales is undeniable. The Verge’s John Kastrenakes reported that one NFT created by the digital artist Beeple sold for $69 million dollars in the renowned Christie’s auction house on March 11, 2021. Only time will tell whether NFTs can become a permanent fixture in a changing economy. For now, the swamp club remains fairly underground.