This paper is the extented version of my English “Facharbeit,” a mandatory scientific paper in German high schools.
Abstract
Non-fungible tokens — or NFTs for short — are digital certificates of ownership that are stored on a blockchain and can be traded on marketplaces or peer-to-peer. However, unlike cryptocurrencies like Bitcoin or Ether, they are not mutually interchangeable and thus unique. NFTs and the infrastructure surrounding it are in development since 2014, but have only caught the broad public’s attention in early 2021 after multiple high magnitude sales. From then on, the NFT market has grown exponentially vis-à-vis attention, size, and volume. There is a large group of people certain that NFTs are the future of art — providing freedom, equality, and success to a high number of artists. Per se, this belief has many similarities to the concept of the American Dream, which is supposed to provide freedom, equality, and opportunities to every American.
This paper aims at providing a basic understanding of NFTs, analyzing to what extent NFTs replicate the American Dream, evaluating the negative side of NFTs, and predicting the future influence of NFTs on the art world.
Motivation
Non-fungible tokens are at the intersection of art and technology, two topics I am deeply interested in. The opportunities this ecosystem bears are fascinating to me. Although not being heavily involved in this ecosystem myself, I have already published a small NFT collection of my own. So, I chose this particular topic for my paper, inasmuch as this is highly relevant for me and, frankly, sparks my interest.
Information
In this paper, the common abbreviations “k,” “M,” and “B” are used to represent thousand, million, and billion, respectively. All monetary values are in US dollars. Cryptocurrency values are indicated by the currency’s three-letter code. The US dollar value of Ether is calculated using the daily price of 1 ETH on March 9, 2022, which was $2,576.63. A selection of technical terms is explained in detail in the appended glossary (see §A1). An excerpt of NFTs/NFT collections mentioned as well as some additional exemplary ones are shown in the appendix (see §A2). For an easier read, citation footnotes are…
