Exactly almost a year ago, a JPG sold for $69.3 million.
A JPG, as in a digital file, something its owners will never be able to physically touch, hold or hang except on a screen. A string of zeros and ones, really.
The image was beautiful, to be sure: a striking neon mosaic of 5,000 pieces of digital art, each equally unique, dazzling, and intricate. But your buyer might have been crazy: This comes from the billionaire founder of Binance, the world’s largest trading platform for invisible currency (read: crypto).
“People may have lost their minds”, CZ Zhao saying Fortune recently, talking about the NFT craze.
NFT stands for Non-Fungible Token – a unique and original digital asset that belongs only to its owner(s). It’s a bit like a certificate of authenticity for artwork, music, videos, and even tweets.
NFTs can be sold individually or as part of a collection, as in the case of Bored Monkeys Yacht Club, a collection of thousands of digital illustrations of apes on the Ethereum blockchain. Those who purchase an ape graphic as NFT gain membership in an exclusive club with members-only perks, such as access to “the bathroom,” a members-only online graffiti board. Celebrities like the comedian and tonight show host Jimmy Fallon and Grammy-winning producer kettledrums they are currently using their Bored Ape NFTs as their Twitter Profile pictures
Whatever your take on NFTs, there is one undeniable advantage, Zhao said: “They allow artists to monetize their work globally again…and reach a much wider audience.”
“A guy in Singapore can pay $69 million for your art.”
In the cast of last year’s record NFT sale, that “guy” or guys were MetaKovan (real name Vignesh Sundaresan) and Twobadour (Anand Venkateswaran), co-owners of NFT-focused investment fund Metapurse. They wanted to add “a hint of mahogany” to the typical “monochrome…color scheme” of investors, financiers, and patrons of the art. the two blogged after the sale.
“The point was to show Indians and people of color that they too could be patrons, that cryptocurrency was an equalizing power between the West and the rest, and that the global south was growing,” they said.
But the recipient of that $69 million, an artist known as Beeple—Mike Winkelmann in real life—he worries that NFT art is in a bubble. He said Fox news sunday last year that the Internet, at its birth, was also a bubble, and it finally burst.
“But it didn’t take down the internet,” he said. “So the technology itself is strong enough where I think it’s going to survive that.”
Zhao also sees the fragility of the market, but is quick to point out that he is not an art collector.
“Nothing is worth that much, right?” she said, referring to Beeple’s mind-boggling sale. “But if you have a person willing to pay for it, if that person suddenly changed their mind, then that’s not worth as much anymore.”
Zhao continued, “But there is a market for people who pay…regularly for NFTs, for art. Guess what? Now, more artists are entering the NFT industry. With more artists coming in, the quality improves.”
This story originally appeared on fortune.com