NFTs: From a $4 Video Clip to a $17 Billion Bubble and Back to Zero

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The first known NFT sold for $4. In May 2014, artist Kevin McCoy and technologist Anil Dash registered a short pulsing video called Quantum on a blockchain during a live presentation in New York, calling the idea monetized graphics and hoping it would help digital artists get credit and payment. Seven years later the same concept produced a market with $17 billion in trading volume, a $69 million sale by Beeple at Christie's, and a piece by Pak called Merge that brought in over $91 million. By September 2023, researchers found 95 percent of NFT collections had fallen to zero monetary value.

This episode explains what buyers were really getting: a unique receipt on a public ledger, usually without copyright, closer to a certificate naming a star than to owning the star. It follows CryptoKitties clogging the Ethereum network in 2017, the ERC-721 standard that worked like a shipping container for digital goods, and the wash trading, plagiarism, and gamer revolt that soured the boom. It ends with what survives: quiet uses in ticketing, research funding, genetic data, and pharmaceutical supply chains.

• Skeptics mocked the craze with the right-clicker movement, saving million-dollar ape images to their desktops for free and announcing that they owned them too.
• CryptoKitties let players breed unique virtual cats through smart contracts, proving that people will pay for digital scarcity even as the game overwhelmed Ethereum.
• Wash traders moved tokens between their own anonymous wallets at rising prices to fake demand, and a fake Banksy NFT sold for over $300,000 before the money was refunded.
• Ubisoft's NFT announcement video drew a 96 percent dislike ratio and was delisted, while Valve's Steam and the developers of Minecraft banned NFTs outright.
• UC Berkeley auctioned NFTs tied to patents for CRISPR gene editing and cancer immunotherapy to fund research, and geneticist George Church explored tokenizing genetic data so individuals control it.