After being bought for $2.9 million, the NFT of the Twitter founder’s first tweet is being auctioned again. Problem: no one wants to buy it. The highest bid does not exceed 2 ethers, or 5,000 euros.
This is an important story in the world of NFTs, because it provides some necessary reminders about an industry that is based both on a technology with infinite potential, but also on a lot of speculation.
This April 14, 2022, an NFT of the first tweet ever published online is for sale: its owner, entrepreneur Sina Estavi, hopes to make $48 million. He acquired it for 2.9 million last year. In one week of auction, however, Sina Estavi only received around twenty offers, the highest of 2 ethers, or around 6,000 dollars (5,000 euros). This corresponds to 0.2% of the amount the owner spent a year earlier to acquire this NFT. And half as much as he hopes to get.
Twenty offers for the NFT of the first tweet, well below its purchase price
Although fashionable, the term NFT (for non fungible token) is not always very clear. As a reminder, this is not a tangible object, but proof of the digital identity of a virtual object. One can imagine an NFT as an authentication token. Less abstractly, it is a sequence of numbers, registered on the blockchain (a sort of account book where everything is registered and stored publicly, without control by a centralized body).
What exactly bought Sina Estavi last March, this is the authentication token from the screenshot of Jack Dorsey’s first tweet. Obviously not wanting to keep it very long, he put it back on sale on April 7, announcing that he would donate 50% of the winnings (about $25 million according to him) to charity. Dorsey has moreover answered with a salty message: why not donate 99% of the sum? “, which the owner finally said he was ready to do if Dorsey “ wanted it “.
The problem is that the amount obtained so far is ridiculous compared to what the entrepreneur was hoping to get out of it. In one week, the highest bid had not even exceeded $280: it was only since an April 13 article from the Coindesk site, which spotted this unusual story, that the amount increased 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, its creator, but also the weight of supply and demand. The NFTs which are snapped up at a high price (like the Bored Apes for example) are for example highly sought after because they… are highly sought after. As in stock market mechanisms, the value of an asset sometimes increases simply because enough people believe that it will increase even more.
Where does the value of an NFT come from?
Two days ago, the first show entirely dedicated to NFTs was organized in Paris: Numerama met a large number of entrepreneurs there (the masculine is not used here by grammatical rule; NFTs are overwhelmingly favored by men) convinced that NFTs are “ a revolution “, forming a large community of self-proclaimed ” utopians “.
The technology for recording data on the blockchain could, in itself, allow very great digital advances, in particular in terms of security, or the remuneration of artists – the show Le Meilleur des Mondes on France Culture, where Numerama writes a chronicle weekly, has also recently welcomed an artist who has seen his profits increase tenfold since he started in NFT.
However, the environment is still full, for the moment, of individuals driven by opportunism and the quest for profit: many people invest in the NFT environment for fear of missing the next digital shift and missing the opportunity to weigh in a web of the future, paradoxically touted as a place of horizontality. As with the Metaverse, the world of NFTs exists because it is said to exist. It may be the beginning of a revolution, and perhaps we have to go through speculation and excessive investment in certain superficial projects so that, in a few years, something solid and seriously. Still, a virtual token that traded for 3 million dollars has just lost 99.8% of its value in one year, showing how much the future is still and always a story of belief.