Over the years, we have written about consumers and their behavior more than 1,000 times. And our only use of “cyber” involved cyber security. So yes, for us, this post breaks new ground by studying two aspects of “crypto.” Hence, we examine cryptocurrency meets crypto collectibles. Including what each of these concepts represents. And how they may intertwine.
Why and How Crypto Currency Meets Crypto Collectibles
The Premise of Cryptocurrency
The story of these coins begins with cryptographer David Chaum in 1983. With a cryptographic system called eCash. Twelve years later, he developed another system, DigiCash, that used cryptography to make economic transactions confidential.
However, the first use of “cryptocurrency” occurred in 1998. That year, Wei Dai began to think about developing a new payment method that used a cryptographic system. And whose main characteristic focused on decentralization.
In 2009, the so-called Satoshi Nakamoto (a person with a secret identity) created the first cryptocurrency, Bitcoin. As noted above, he was not the first person who came up with the idea to create it. What was the intention behind it? To create a new way of payment that could be used internationally, decentralized and without having any financial institution behind it.
Blockchain technology used by cryptocurrencies consolidated over the years. Numerous experts augur an excellent future for both this technology and virtual currencies. Some of the calculations that have been made show results that reach up to many billions of dollars in 2021.
The Premise of Crypto Collectibles
The growing phenomenon of crypto collectibles goes back only a few years. Nonetheless, the sale of these items is on fire. For those just learning about crypto collectibles, the process seems complex. As well as confounding. After all, why would you buy something that only exists digitally?
One area where blockchains caused a reorganization of traditional hierarchies involves the world of digital art and collectibles. Thanks to the innovation behind Bitcoin, it finally became possible to inject digital objects with scarcity. Thereby allowing them to accrue value and become financially worth collecting. Which spawned a whole new economy in the process.
There were attempts to verify digital artefacts on the Bitcoin blockchain as early as 2014. But, these tended to remain the preserve of crypto-geeks and meme enthusiasts. Because of the nature of the Bitcoin blockchain, ensuring the non-fungibility of the tokens issued proved difficult. And the various “colored coins” of the era were mostly relegated to the footnotes of history.
The first blockchain-based non-fungible token (NFT) to gain any serious traction was LarvaLabs’ cryptopunks. A collection of ten-thousand AI-generated pixel-art characters, each one represented by a token on the Ethereum blockchain. Given out for free in May 2017 to the first people to claim them, the original cryptopunks have gone on to generate a secondary market worth many millions.
The Premise of NFTs (Non-Fungible Tokens)
In order to facilitate the exchange of cryptocurrency for crypto art, a currency is needed. That involves the introduction of NFTs. What is that currency?
For information about this topic, we turn to CNBC:
The difference with bitcoin and other tokens, is that each NFT is unique and can’t be replicated. Each one accrues value independently. Crypto investors say NFTs derive their value from their scarcity. They’re stored in digital wallets as collectors’ items. Beyond art and sports, people have also found uses for NFTs in virtual real-estate and gaming.
Nadya Ivanova, chief operating officer of research firm L ‘Atelier, says collectible digital assets can be thought of as a better version of an MP3 file. Musicians have struggled to profit from their work in the digital age. And Ivanova says some turn to NFTs to prove ownership of their work. As well as to find an additional source of revenue.
“It allows content creators to actually own the property rights for what they create. Which enables them to profit from it in different ways which they can’t do with physical art,” she told CNBC. Adding that crypto art represents the strongest growing subsection of the digital collectibles market.
Cybercurrency Meets Cyber Collectibles
To observe that the cyber collectibles marketplace is exploding is really an understatement. We show this through two examples.
CryptoSlam! is a major player in the cyber collectibles marketplace. In addition, it provides a lot of data on the industry. For instance, it regularly reports on the all-time sales leaders. Such as the top 25 in this recent chart:
Recently, the art market was turned upside. Through the sales of a piece of cyber art for $69 million. Yes, $69 million. More than the highest amount ever paid for physical paintings by some famous artists. The New York Times reports that:
After more than 180 bids in the final hour, a JPG file made by Mike Winkelmann, the digital artist known as Beeple, sold by Christie’s in an online auction for $69.3 million with fees. The price set a new high for an artwork existing only digitally. Beating auction records for physical paintings by museum-valorized greats like J.M.W. Turner, Georges Seurat and Francisco Goya. Bidding at the two-week Beeple sale, consisting of just one lot, began at $100.
With seconds remaining, the work was set to sell for less than $30 million, but a last-moment cascade of bids prompted a two-minute extension of the auction and pushed the final price over $60 million. 33 active bidders had contested the work.
If you understand this transaction, you are well ahead of me!!!!!