The fact that a strong fan base, or “community,” on social media helps a lot when trying to auction off an NFT has become quickly apparent, and was driven home to us once more by Sven Wagenknecht, co-founder of German cryptomagazine BTC-Echo.
The expert on the certificates of authenticity — which is what an NFT actually is — told DW that such token sales and auctions are launched by social media influencers, artists or musicians primarily with the aim of entertaining their followers and put them “in a good mood.”
DW’s users unimpressed
Well, DW’s attempt at trying out the new-fangled technology for the good cause of supporting Reporters Without Border (RWB), unfortunately, drew more skepticism than enthusiasm. That’s at least what some reactions to our auction on Twitter suggest:
There’s no denying, Brandon Eby has a point when he criticizes the huge amount of energy DW has perhaps “wasted” with the creation of its NFT on the Ethereum blockchain.
And another DW reader urged us not to join the cryptocrowd, because it’s “nothing but fraud and money laundering.” In separate follow-on articles, we’ll be dealing with your objections in more depth. Nevertheless, and in our excuse, the little NFT experiment was mainly intended to explore the newly emerging NFT market and see how it works.
Proceeds uninspiring
Frankly, the 24-hour auction that ended 21.00 CET on Wednesday (November 17)was a rather tedious affair. Only three bids were made, with the highest entered by someone running on the ticket @podre. He wagered 0.1337 Ether and won DW’s first NFT ever.
For those who are not familiar with cryptocurrency valuations, this is equivalent to about $600 (€527). Not really eye-popping, given that the internet auction platform, foundation.app, siphoned a 15% fee off the total.
Nevertheless, big hopes are generally attached to the NFT marketplace. Artists are looking to more potential buyers of their works, and games developers are said to have already sold virtual properties that are part of their video games. Just recently, even the big Hollywood studios have discovered nonfungible tokens as a smart marketing tool for their latest Marvel superheroes movies.
The secret behind all these business models is the tamperproof digital footprint of an NFT that identifies every piece of work created as an original.
What determines the price
Arising from DW’s NFT auction, however, are interesting questions. Has @podre made the purchase of a lifetime? Or is our PressFreedomX30 token just a worthless junk of bits and bytes? One observer of DW’s auction, Colin Lieb, wanted to know exactly that, asking if he would be buying a unique piece of German media history.
Good questions, indeed — alas, we have no answers immediately available. But the user also pointed to another interesting aspect emerging with the rising NFT market. He owns an NFT issued within the so-called Bored Ape series, he wrote on Twitter, adding that he’s sure to get at least the purchase price back, if he would resell the NFT.
There you have it! Like any other ware or service, NFTs, too, are subject to the principle of supply and demand on the marketplace. And a set of digital data — that’s what an NFT is — that was already selling for a good price, stands a fair chance of selling for an even higher price under current market conditions. Valuewise, it could help if your NFT is part of a wider collection of tokens.
The so-called Cryptopunks NFTs are currently worth $400,000 each of the 10,000 tokens issued by Lava Labs
No cheap business
Creating an NFT is usually done on the Ethereum blockchain network. But huge additional costs arise from paying with euros and mining the token. More money is need for listing the NFT for auctioning. In total, DW has paid about €350 ($397) in fees to get its sale up and running.
Normally, you get to hear about NFT sales only in connection with spectacular sums that are paid. Digital artist Beeple, for instance, sold an NFT artwork of him for a staggering $69 million in March, while shortly thereafter The New York Times auctioned off a digital newspaper article about NFT’s for about $750,000.
But the glory of the few often overshadows the misery of the many NFTs that are languishing largely ignored in the digital vaults of auction platform such as Opensea and Foundation. No bidders, no income — only the steep costs for mining and listing. So, the current NFT market is a bit reminiscent of the goldrush of bygone times — only a few strike it rich, and very often by selling the shovels to the hapless adventurers.
This article was adapted from German.
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