Last month, a Singapore investor bought a digital artwork for $69 million. Since the art does not have a physical form, it cannot appear in a usual museum.
The artwork is "Everydays: The First 5000 Days," by the American artist Beeple. It is a non-fungible token, or NFT. It only exists in digital form. It is based on a technology called blockchain, which is also used with digital money systems known as cryptocurrency.
The investor is Metakovan, whose real name is Vignesh Sundaresan. He plans to show the artwork in four virtual world environments. He is working with professionals to design structures where people can enter using computers or virtual reality technology. As a whole, the name given to virtual worlds and the internet is “the metaverse.”
But art is just one part of a new economy of virtual worlds based on blockchain in the metaverse. In these worlds, there are NFTs representing land, buildings, images and even names. They often sell for hundreds of thousands of dollars. There, people can walk around with friends, visit virtual buildings and attend virtual events.
There is a new economy of blockchain-based virtual worlds where land, buildings, avatars and even names are selling for hundreds of thousands of dollars.
Metakovan says he is the world's biggest NFT investor. NonFungible.com, a web site that records sales of NFTs, says his collection is valued at 189 million dollars.
Anand Venkateswaran is Metakovan’s business partner and uses the name Twobadour. He thinks sales of NFTs will increase even more after people see for themselves how they work. "The real explosion will happen when they're able to ... experience these NFTs as they were intended,” he said.
Interests in virtual worlds
Existing virtual worlds, including Decentraland, Cryptovoxels, Somnium Space and The Sandbox, have seen new highs on prices of land, images and others.
Decentraland sold a 41,216 virtual-square-meter piece for $572,000 on April 11. And Somnium Space said a structure on its virtual world received more than $500,000 on March 16.
Decentraland conducted a virtual fashion show with clothing maker Adidas where designs were sold as NFTs. It also had interest from musicians to perform and sell tickets as NFTs.
One example of an attraction in the virtual worlds is Atari’s game-playing area within Decentraland. The videogame company also plans to open a casino. Frederic Chesnais is head of Atari's blockchain division and the company's former leader. He told Reuters that online environments are going to be "very, very big” and land prices could one day sell for millions of dollars.
Sebastien Borget is co-founder of The Sandbox. He said the economic activity within virtual worlds is like a new nation forming. He thinks the NFT-based economy would be larger than the real-world one within ten years.
Ben Nolan is founder of the virtual world Cryptovoxels. He warned, "Doing NFTs as an investment or as a way to make money is really ill-advised."
However, he sees a future for virtual worlds and NFTs. "Actually walking around with another person in a virtual space and looking at art together is a really nice way to spend time," he said.
I’m Jill Robbins.
Words in This Story
digital - adj. using or characterized by computer technology
cryptocurrency – n. a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority
virtual – adj. existing or occurring on computers or on the Internet
intend – v. meant to be; planned
ill-advised – adj. not wise or sensible; foolish