Non- fungible tokens (NFTs) have been generating lots of money, headlines, and controversy as awareness of these blockchain-backed assets has grown over the past few years. The market for NFTs tripled in size to reach a total value of $250 million in 2020. This exponential growth continued into 2021, with $200 million in NFTs exchanging hands in the first three months of the year. Early in 2022, Bored Ape Yacht Club NFTs generated enough interest to see rap superstar Eminem spend $460,000 on a digital ape that vaguely resembled him. Many industries have taken note of the exploding value of NFTs, and major video game companies are beginning to incorporate these digital assets into their offerings.
The most publicized and expensive NFT sales so far have mostly been digital artworks, like those of the Bored Ape Yacht Club and a $69 million piece by artist Beeple sold through prestigious auction house Christie's in March 2021. While many people have bought into the hype surrounding NFTs, there is plenty of controversy surrounding this emerging asset class. Some purchasers of Bored Ape Yacht Club NFTs have been hugely irritated to find people downloading these same images for free and setting them as their profile pictures on social media platforms such as Twitter. This is possible because owning an NFT doesn't actually confer ownership of the image represented by it. An NFT simply denotes a unique blockchain address representing a digital asset. Despite the huge sums of money involved, an NFT's owner has no ownership of the physical or digital object that the NFT represents.
