Non Fungible tokens (NFTs) have taken the world by storm in the past year. A recent poll shows 75 percent of French people see them as “purely fun products” designed for entertainment. However, a quarter of the population, particularly 18-34-year-olds, see the virtual technology as a long-term investment. So what are they and how do they work?
Because everything found on the internet can be copied infinitely, the NFT provides a proof of unique ownership thanks to a code created using blockchain technology which stores the information in such a way that it cannot be copied or modified.
A blockchain is a distributed database that is shared across computers belonging to a network. It works as a kind of digital public ledger, recording transactions electronically in digital format.
Buyers of NFTs thus have authentic proof of ownership of a digital creation be it art, photos, videos, video game personalities, objects in the virtual world, or physical objects such as celebrity souvenirs and real estate.
They are easy to buy and sell and have become extremely popular especially on social media thanks to various celebrities like Justin Bieber.
More or less unknown a year ago, they now represent a golden egg for certain sectors such as the contemporary art market and the music industry.
A poll conducted by French survey company Ifop for specialised website Cointribune, released on 9 February, found that the number of online searches for NFTs has significantly increased, outpacing searches on Bitcoin in 2021.
When it comes to cryptocurrency, 82 percent of French people say they know what it is compared to only 58 percent in February 2021. This increase owes much to the media buzz around people who are investing in the new technology, such as innovator and businessman Elon Musk and Facebook CEO Mark Zuckerberg.
40 billion in sales in 2021
Despite the growing enthusiasm, three quarters of French people interviewed admitted they don't know what NFTs are. Only 8 percent said they had any precise knowledge.
One out of two respondents aged 18-34 said they had heard of NFTs, but only 20 percent of the over 35's.
There is a lot of money to be made in the NFT art world – auctions and purchases from celebrities contributed to sales worth more than €35 billion last year, according to analytics firm Chainalysis.
NFTs took off in March last year. Among the prominent recent sales are:
- Auction by artist Beeple, who sold a digital artwork called Everydays: the first 5,000 days for €61 million.
- Twitter co-founder Jack Dorsey sold his very first Tweet message for €2.6 million.
- Internet inventor Tim Berners-Lee also sold the first code made for the world wide web for €4.7 million.
- 12 year old Benjamin Ahmed from London sold €400,000 worth of 'whale artworks' created using icons on “Paint” software in July 2021.
#WeirdWhales #NFT pic.twitter.com/Pz4pEs03JC
— Benyamin (@ObiWanBenoni) July 21, 2021
- On Monday 7 February, NFTs linked to Beatles paraphernalia were sold by John Lennon’s son Julian Lennon for €140,000 by Julien’s Auctions in Los Angeles in partnership with the company YellowHeart, specialised in musical NFTs. A part of the profits will go to a foundation created by Julian Lennon to capture CO2 emissions to reduce global warming.
Among the pricier items was the NFT version of the notes behind the creation of the song Hey Jude, sold for €67.5 million. The NFT version is presented in an animated form with the notes appearing one by one on the page, accompanied by an audio commentary recorded by Julian Lennon.
Ready to invest
While the majority of people polled said they saw cryptocurrencies and NFTs as simply a new fad, principally for fun and leisure, business leaders take it more seriously.
In terms of investment, 27 percent of people interviewed said they could imagine buying products in the form of NFTs, mostly artworks or music, followed by video game add-ons.
Forty-five percent of 18-34-year-olds who know about NFT have already invested, or are interested in investing, compared to 23 percent of the over 35s.
Even if they remain sceptical, six out of 10 French people agreed that cryptocurrencies represented a revolution in terms of the concept of money and payment.
French people remain on their guard when it comes to the new technology, the poll found, with 57 percent concerned about all aspects contributing to the development of digital worlds.
Forty-six percent said they thought the development of NFTs would negatively impact the environment and more than a third said they were worried that virtual worlds and metaverse would gradually overtake “real” life interactions in the coming years.
On a positive note, 35 percent felt the Covid crisis encouraged them to have a more positive attitude towards new technology and 19 percent said that France should rely more on cryptocurrencies in the future.
The Ifop survey was based on an online questionnaire carried out between 19 and 24 January 2022 with 2,003 people, representing a cross section of the population aged 18 and older.
