After being bought for $2.9 million, the NFT of the Twitter founder’s first tweet is up for auction again. Problem: no one wants to buy it. The highest bid is no higher than 2 ethers, or 5,000 euros.
This is an important story in the world of NFTs, as it provides some necessary reminders of an industry based both on a technology of infinite potential and on much speculation.
On April 14, 2022, an NFT of the first tweet ever published online is for sale: the owner, entrepreneur Sina Estavi, hopes to make $48 million† He bought it for 2.9 million last year. In one auction week, however, Sina Estavi only received about twenty bids, the highest of 2 ethers, or about $6,000 (€5,000). This corresponds to 0.2% of the amount the owner spent a year earlier to acquire this NFT. And half of what he hopes to get.
Twenty offers for the NFT of the first tweet, well below the purchase price
Although fashionable, the term NFT (for non-exchangeable token) is not always clear. As a reminder, this is not a tangible object, but a proof of the digital identity of a virtual object. One can imagine an NFT as an authentication token. Less abstract, it is a series of numbers, registered on the blockchain (a sort of account book in which everything is publicly registered and stored, without control by a centralized body).
What exactly did you buy? Sina Estavi last March, this is the authentication token from the screenshot of Jack Dorsey’s first tweet. He obviously didn’t want to keep it long and put it back up for sale on April 7, announcing that he would donate 50% of the profits (about $25 million he says) to charity. Dorsey also has answered with a salty message: why not donate 99% of the amount? “, which the owner eventually said was ready to act as Dorsey” wanted it †
The problem is that the amount obtained so far is ridiculous compared to what the entrepreneur was hoping to get from it. Within a week, the highest bid was not even more than $280: only since an April 13 article from the Coindesk websitewho noted this unusual story, that the amount rose to $6,000, with a second auction.
How can an NFT go from $2.9 million to $6,000? As in the art market, the value of an object depends on many factors, including the originality of the work, the maker, as well as the weight of supply and demand. The NFTs picked up at exorbitant prices (like the Bored Apes for example) are highly sought after for example because they are… highly sought after. As with stock market mechanisms, sometimes an asset’s value rises simply because enough people believe it will rise even more.
Where does the value of an NFT come from?
Two days ago was organized on Paris the first show entirely devoted to NFT : Numerama met many entrepreneurs there (the masculine is not used here by grammatical rules; NFTs are overwhelmingly popular with men) convinced that NFTs ” a revolution “, forming a large community of self-proclaimed” utopians †
The technology of capturing data on the blockchain could bring major digital advances on its own, particularly in terms of security or artist compensation – the show Brave New World on France Culture, where Numerama writes a weekly columnalso recently welcomed an artist who has seen his profits increase tenfold since joining NFT.
However, the environment is currently still full of individuals driven by expediency and the quest for profit: many people are investing in the NFT environment for fear of missing out on the next digital shift and missing the opportunity to weigh in on a web of the future. paradoxically touted as a place of horizontality† Like it for the Metaverse, the world of NFTs exists because it is said to exist† It could be the start of a revolution, and maybe we need to make speculation and excessive investment in certain superficial projects so that in a few years we have something solid and serious. Yet a virtual token that traded for $3 million has lost 99.8% of its value in one year, demonstrating how quiet the future is and is always a story of faith.
