NFT quickly became a byword in the art and crypto worlds ever since digital artist Beeple made news for selling his digital art at Christie’s for $69 million. Actually, what Mike Winkelmann a.k.a. Beeple, sold to a high profile blockchain entrepreneur/programmer named Vignesh Sundaresan is a non-fungible token minted in the ethereum blockchain ledger. The latter paid 42,329 in Ether (ETH), which at the time of sale in March 2021 was worth $69 million.
Now here’s the thing, while NFT hype has sent many digital artists and creators scrambling to find out how they can have their digital artworks, many tech experts give advice that NFT transactions are not as simple as they seem to appear in TV news reports.
Understanding the Price Values of NFT vs. Price Value of Cryptocurrency
There’s a lot of intricacies involved in Nft technology and what artists or any one interested in selling digital assets should fully comprehend is how blockchain technology works. Mainly because NFT transactions transpire only in blockchain platforms and not in any of the traditional trading markets where exchange deals are directly monetized into fiat money like the US dollar currency.
The price or value of a non-fungible token is tied to the value of the cryptocurrency, which in Beeple’s case is the Ethereum. However, the price at which an NFT is sold is determined by how much a buyer would be willing to pay for owning the NFT. Understand that in an NFT sale, only the key to the corresponding blockchain code that minted the digital asset into an NFT, shifts ownership. The digital asset creator may also choose to sell his copyright license; or retain copyright ownership so he can collect some form of commission or royalty from future sales.
NFTs are traded via auction houses like Chritie’s or Sotheby’s. As opposed to the trading of cryptomoney like ethereum at cryptocurrency exchange sites, where the price value is dependent on the current index price for ETH.
This denotes that if today, Vignesh Sundaresan decides to sell the NFT covering Beeple’s digital art work at an auction site, Sundaresan’s asking price would not be lower than the 42,329 ETH being the payment he made in March 2021. At that time the ETH index price was roughly at around $1635.
Nonetheless, even if the final bid price for the Beeple NFT does not stray far from the 42,239 ETH acquisition cost, Sundaresan still gains from the transaction. That is, if he decides to immediately convert the proceeds from the NFT sale. After all, the current ETH price index ETH is pegged at at $3,168.
The doubling of ETH dollar values was a result of the phenomenal soar of cryptocurrency values that began in April 2021. Technically, Beeple’s NFT is now approximately worth at least $133,689,600 to Sundaresan. Likely more, should Sundaresan decide to sell the NFT today and immediately cash out his proceeds the way Beeple did.
What Digital Artists Should Learn from Beeple’s Phenomenal NFT Feat
In acknowledging that he is not a blockchain technology brainiac nor an expert at trading cryptocurrencies, Beeple immediately cashed out the proceeds of the NFT sale he closed at Christie’s
While the dollar equivalent of the March 2021 NFT deal was pegged at $69 million, Beeple actually received $53,000,000 million for his digital collage “Everydays – The First 5000 Days,” The $53 million cash proceed was the net amount of taxes and related fees paid to Christie’s and to the ethereum platform that minted the digital art into a non-fungible token.