Could Non-Fungible Tokens Be A New Market For The Restaurant Industry?

What are those precious photos and moments really worth? For some, they could be a lot. 

Beeple

• By Jamie Mah @grahammah

When I was twelve, I used to join my two older brothers on the weekends helping their Dad sell sports cards. This was the early 90s, and at the time, big business. Each Saturday I stood and helped sell hockey memorabilia and trading cards to rapid fans eager to collect and make a buck. The shop was small but packed to the brim most days. It was thrilling. To this day I still have mint Eric Lindros and Shaquille O’Neal rookie cards. What they’re perceived worth is, I can’t say, nor do I care. But for some, this essence of worth can be quite valuable. This was thirty years ago. Statistical cards with a players face and stats printed on paper is a dead industry. Enter the world of non-fungible tokens. 

From Esquire:

Beeple is an artist. He makes digital art — pixels on screens depicting bizarre, hilarious, disturbing, and sometimes grotesque images. He smashes together pop culture, technology, and postapocalyptic terror into blistering commentaries on the way we live. A recent frame depicted Donald Trump wearing a leather mask and stripper’s pasties, taking a whip to the coronavirus bug (title: “Trump Dominating Covid”). On the day Jeff Bezos announced he was kicking himself upstairs, Beeple imagined the Amazon founder as a massive, threatening octopus emerging from the ocean as military helicopters circled above (“Release the Bezos”).

Beeple has 1.8 million Instagram followers. His work has been shown at two Super Bowl halftime shows and at least one Justin Bieber concert, but he has no gallery representation or foothold in the traditional art world. And yet in December the first extensive auction of his art grossed $3.5 million in a single weekend…

What, pray tell, are these collectors even buying? Why would someone pay $777,777 for an MP4? Couldn’t you watch that on Instagram for free?

Theoretically, yes, but the crypto art scene uses blockchain technology to authenticate and identify a single, unique piece of digital art. To understand how that piece of art sells for the price of a one-bedroom apartment in Brooklyn, one needs a brief primer on something called nonfungible tokens, or NFTs — digital goods that are bought and sold on emerging websites like Nifty Gateway, which hosted the Beeple auction.

Bitcoin is the speculative currency everyone talks about, but it’s really the blockchain which we should be focusing on. Its capabilities are staggering. It’s essentially the perfect authenticator. In a digital world, this is game changing and as you can see above, quite lucarative. 

From Coindesk:

Non-fungible tokens (NFT) are digital assets that represent a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate and even digital sneakers.

One of the main benefits of owning a digital collectible versus a physical collectible like a Pokemon card or rare minted coin is that each NFT contains distinguishing information that makes it both distinct from any other NFT and easily verifiable. This makes the creation and circulation of fake collectibles pointless because each item can be traced back to the original issuer.

Unlike regular cryptocurrencies, NFTs cannot be directly exchanged with one another. This is because no two NFTs are identical – even those that exist on the same platform, game or in the same collection. Think of them as festival tickets. Each ticket contains specific information including the purchaser’s name, the date of the event and the venue. This data makes it impossible for festival tickets to be traded with one another.

This is where things get interesting. Currently this market is being dominated by artists, sports collectors and the like. The NBA itself launched their own highlights NFT platform late last year called NBA Top Shot. Fans and speculators have been buying and selling select highlights for astronomical prices. A LeBron James copy dunk of one of Kobe Bryant’s sold for $47,500. Yes, you read that correctly. 

It certainly took me a second to understand and wonder why anyone would pay these lavish prices for highlights you can easily find on YouTube. 

From Stratechery:

What is so interesting about this concept is that you can actually say with certainty who owns that particular piece of digital art, despite the fact that said art, by virtue of being digital, can be replicated endlessly and costlessly. There is still only one specific manifestation of that file that is on the blockchain, and the blockchain publicly tracks every transaction associated with that file, so you not only know who owns it now, but anyone who ever owned it.

Now to be fair, I get why this sounds silly: there is no actual difference, particularly to the naked eye, between the NFT-secured piece of digital art and the one you might rip off of Google Images. But then again, what is the actual difference between an original piece of art and a perfectly executed replica? The knowledge of authenticity is itself a huge part of the value, which is to say that Christie’s assurance that the piece you bought at auction is the real deal is a huge part of the price; in this case the assurance of legitimacy is the blockchain itself.

On the flipside, an NFT-secured piece of digital art is still digital! That means you can not only transfer it anywhere in the blink of an eye, you can also display it anywhere — multiple locations at once, even. It’s as if every replica in the world were in fact the property of whoever owned the original. This has its downsides: that a piece of art is everywhere decreases the specialness and status that comes from owning a single physical object; on the other hand, the fact that ownership is public means that whatever status comes from owning a piece of digital art is transmitted as easily as the art itself.

This is where I see an opening for the restaurant industry. Capturing those select dining moments, or each inspired creation could set off a new market. The NBA was smart to get ahead of this when it did. For the restaurant industry, using platforms such as Nifty Gateway could unlock real capital as well as give its creators (chefs, bartenders) new avenues to showcase their work. This reality could be a few years in the making or two weeks. The internet never ceases to amaze me. 

From Ben Thompson: (emphasis mine)

I’m not going to sit here and convince you that blockchain-based highlights are intrinsically valuable; nor, for that matter, am I going to sit here and convince you that cardboard-based pictures are intrinsically valuable either. Which makes my point! More broadly, the fact that a play in a basketball game can be made unique means that anything can be made unique. That does not, to be sure, mean that said thing is valuable, but it creates the conditions for value to arise.

The key word there is anything. Digital art and NBA highlights are just the start of this new market. It’ll be fascinating to see if the restaurant industry takes notice and decides to jump in. I certainly would. 

Anyways, food for thought.