This article was originally published on May 22, 2021， Bitcoin Pizza Day, under the title "Today, Beeple Owes Us Pizza."

Today, you should eat pizza. You probably know the backstory: it's May 22. If you're not familiar, you need to catch up—take a serious look at the article I wrote last year.

But why should Beeple buy us pizza? The reason is simple: Beeple recently struck it rich—not just once, but several times. How rich, you ask? A picture is worth a thousand words. Take a look at the image below and guess how much Beeple made this time.

$69 million, in just one deal. Beeple, whose real name is Mike Winkelmann, is an American digital artist. His fortune didn’t come from Bitcoin but from NFTs. And yes, NFTs are the topic of today's discussion.

Beeple should treat us to pizza because, without pizza, there would be no Bitcoin; without Bitcoin, no Ethereum; without Ethereum, no NFTs; and without NFTs, Beeple wouldn't have made his fortune. This logic might be a bit stretched, and Beeple might not even agree.

Of course, there’s also a more compelling reason: Beeple should offer some comfort to the crypto holders currently nursing losses (paper losses relative to fiat currency). Especially after the recent steep drops in Bitcoin and Ether prices.

But if you’re not in urgent need of cash and haven’t leveraged yourself, why worry? Prices don't only go up, nor do they only go down.

Let’s get back to NFTs. The fact that they made Beeple so much money must mean they’re special—maybe even more "Bitcoin" than Bitcoin itself.

Of course, you might be wondering whether NFTs are another “Bitcoin” from 12 years ago. Should you also buy some NFTs? The answer isn’t as simple as “yes” or “no.” Read through this article, and you should be able to make your own judgment.

1/5 NFT: Divine or Demonic?

Saying NFTs can turn anything into gold is an understatement. They're practically divine.

NFT stands for non-fungible token, which simply means each NFT is unique. This is very different from Bitcoin, where each unit represents the same value. With NFTs, each one represents a different value.

Each NFT is unique, which can be a bit mind-boggling. To simplify, think of it this way: if Bitcoin is the currency of the virtual world, then NFTs are the assets of that world.

Remember, you can’t spend your NFT like money, or we’d be back to the barter system. Just think of NFTs as “things,” and it becomes much simpler.

NFTs aren’t just useful in the virtual world; they’re also applicable in the real world. For example, in real estate, NFTs can represent each property because no two houses have the same location, orientation, area, or price, making NFTs a convenient way to express these differences.

Here’s something to consider: how do you prove the house you live in is yours? A property deed? What if it gets stolen? You’d get a replacement, right? But what if the property registry suddenly burned down, or hackers wiped the database clean—who would issue you a new deed then? No one.

If property deeds were NFTs, these concerns would vanish. NFTs are stored on a blockchain—a global database with backups everywhere on Earth. That’s the magic of NFTs.

Of course, if NFTs only represented houses and enabled transactions, I wouldn’t be telling you this. It would just be the government using new tech to serve the people. That’s the kind of story for the evening news.

Today, I’m discussing NFTs because they represent the virtual with the virtual, the intangible with the intangible. It’s a giant leap forward, almost to the point of sounding absurd. Don’t believe me? Look at the six images above—they look like random doodles by a child, yet their NFTs each sold for over a million dollars.

This is the “demonic” side of NFTs, so be careful and pay close attention. Let's start by understanding Beeple’s $69 million NFT, which is the most expensive NFT on the planet.

2/5 The Most Expensive NFT

This is the collage that left Beeple and his wife wide-eyed—a work called Everydays: the First 5000 Days (referred to as "Everydays" from here on). It’s a single piece made from 5,000 individual images. We have to admit, Christie’s deserves much credit for the high sale price; they know how to pick items with a story.

5000 days, 13 years. From May 1, 2007, to January 7, 2021, Beeple created a piece every day—marriage, children, moving houses, nothing stopped him.

"Everydays" is an inspirational story. Its success will light up another star for those tirelessly working towards their goals. Below are the first and last images from this collection, where you’ll find a lot to reflect on.

Two images: one a beginning, the other an end; one naive, the other seasoned. This is a record of personal growth—not just in art but in life. This story is worth telling your children.

No matter how you slice it, $69 million is no small sum. Shouldn’t Beeple have given something more along with the NFT of "Everydays"? Perhaps the copyright? Nope, nothing of the sort.

The buyer, MetaKovan, received only the NFT of "Everydays." The copyright of "Everydays," and the 5,000 images it contains, remain with Beeple.

This is clearly a more magical story than spending 10,000 Bitcoins on two pizzas. It’s magical because, if NFTs represented houses, each NFT transaction would represent the transfer of the house, with payment made in cryptocurrency. The NFT transfer and the house transfer would happen simultaneously.

But that’s not how this $69 million transaction worked. The NFT represents data—a JPEG image file. Now, the NFT of this image has been transferred to the buyer on the blockchain. But the copyright to the image has not been transferred.

It’s as if you bought a house, but the seller only gave you the deed and not the house itself. Moreover, the deed isn’t a physical document but a virtual “deed” recorded on the blockchain. This would be impossible in the real world, but in the virtual world of blockchain, it happened.

And to top it all off, the legendary auction house Christie’s was involved in the entire process. Clearly, this isn’t just a "scam"—it’s something more complex. So, what made such an "absurd" transaction possible?

3/5 The NFT Frenzy

$69 million is the third-highest price ever paid for a piece of art at auction. But this third place isn't for all artworks; it's specifically for works by living artists.

Take this chance to set aside your profit-driven mindset and look at what the first and second highest-priced works look like.

The first is a stainless steel sculpture, Rabbit, by American artist Jeff Koons, created in 1986 and sold for $91.1 million in May 2019.

The second is a 2.1m x 3m painting, Portrait of an Artist (Pool with Two Figures), by British artist David Hockney, created in 1972 and sold for $90.3 million in November 2018.

The third is an NFT. American digital artist Beeple spent 5,000 days to complete "Everydays: the First 5000 Days" on January 7, 2021. The NFT sold for $69 million on March 11, 2021.

It’s worth noting that, unlike the first and second pieces, the third place item sold was not the artwork itself but the NFT representing it. One thing all three works have in common is that they were auctioned by Christie’s.

“JPG File Sells for $69 Million, as ‘NFT Mania’ Gathers Pace”—this was the headline from The New York Times when reporting on the sale of the "Everydays" NFT. The term "NFT Mania" clearly references historical "Tulip Mania."

But the buyer, MetaKovan, gave us yet another surprise.

MetaKovan’s real name is Vignesh Sundaresan. On March 30, 2021, he revealed his identity in an interview with CNBC.

He said he doesn’t regret spending so much on this NFT and has no plans to sell it within the next 10 years. He even said he was determined to buy this NFT, no matter how high the price. However, he refused to disclose what his maximum bid would have been.

Just as MetaKovan said, the NFT of "Everydays" still belongs to him, as we can see on the Opensea platform. MetaKovan commented on his actions:

"This NFT is a significant piece of art history. Sometimes these things take some time for everyone to recognize and realize. I’m OK with that. I had the opportunity to be part of this very important shift in how art has been perceived for centuries."

Clearly, most of us need time to understand the value of these lines of code. But for Beeple and MetaKovan, it’s a case of Zhou Yu hitting Huang Gai—one willing to fight, the other willing to take it. The auction of the "Everydays" NFT was a flawless, mutually beneficial deal. As outsiders, we have no room to comment.

Unlike 11 years ago, when buying two pizzas with 10,000 Bitcoins was about convincing others that Bitcoin could be used as money—a daunting task—NFTs don’t need to convince anyone but yourself.

For believers in NFTs, who already see value in Bitcoin and Ether, believing in NFTs is a natural progression. Essentially, Bitcoin, Ether, and NFTs are all just lines of code recorded on the blockchain—NFTs are simply more complex.

But everyone should be clear: if only the “believers” believe, NFTs won’t thrive. Popularizing, promoting, and spreading the word is their mission.

11 years ago, spending 10,000 Bitcoins on two pizzas was about promoting Bitcoin; today, “burning” art is similarly about promoting NFTs.

However, this time, things may have gone a bit too far, with less than ideal results.

4/5 Burning NFTs

The GIF above comes from a YouTube video with over 200,000 views, showing the entire process of burning a piece of art.

The account that posted this video is called "Burnt Banksy," and it's clear they burned a Banksy artwork. Banksy is just a pseudonym; no one knows who he is. All we know is that he was born in 1970 and is a famous British street artist, social activist, film director, and painter.

The artwork burned this time was called Morons, a screen print by Banksy from 2006. Blockchain company Injective Protocol purchased this piece for $95,000.

Morons itself is a satire of art auctions. The scene depicts a crowded auction, with the auctioneer pointing to a painting on the left. The focal point is the text in the large frame on the right—"I can't believe you morons actually buy this."

You might think the burned artwork must have been a fake. But on the NFT auction website, Burnt Banksy provided a certificate of authenticity.

The BBC called this a "money-making stunt." The anger is evident in the headline of their report: “Banksy art burned, destroyed, and sold as token in 'money-making stunt.'”

However, there’s no need to be too outraged. Morons is a screen print, and there are many others like it in the world. The burned piece was number 325 out of 500. And this wasn’t the first time—back in 2018, a similar event occurred when a buyer shredded the artwork immediately after purchasing it at auction.

Still, such actions aren’t worth encouraging. Below the video on YouTube, 782 people expressed their disapproval with a thumbs-down.

However, the goal of burning the artwork was achieved, even though the final auction price wasn’t as high as $69 million. On March 7, 2021, the NFT of Morons was sold to the account "Galaxy" for 228.69 ETH. At the time, with each ETH worth $1,658, the selling price was $380,000—almost four times the original price.

This was indeed a successful “money-making stunt.” But without real substance, hype alone won’t cut it. Just like Bitcoin, NFTs need to build trust. And trust takes time to develop and grow.

In this sense, NFTs still have a long road ahead. However, the biggest issue right now isn’t trust—it’s legality. The legal status of NFTs is unclear, and the legal rights of holders are ambiguous.

Essentially, current art NFTs are unregulated products with no legal protection—including the $69 million "Everydays" NFT.

5/5 "Unregulated" NFTs

Yes, the $69 million "Everydays" NFT is an unregulated product. Here, "unregulated" means that the buyer, MetaKovan, doesn’t have the right to the earnings, use, or transfer of "Everydays." The copyright of "Everydays" remains with Beeple.

MetaKovan only has the right to transfer the NFT again. Of course, he can also boast about this NFT on social media platforms like Twitter and Facebook. Other than that, MetaKovan holds no rights related to "Everydays."

This awkward situation arose because NFTs originally had specific use cases. In those contexts, NFTs could be endowed with various rights. The first NFT, CryptoKitties, launched in November 2017, was a blockchain-based casual game.

But now, NFTs have become restless and rushed into the real world. Upon entering, they discovered they were like a country bumpkin in the big city.

First, there was astonishment—wow, what a huge cake, much bigger than in the gaming world. Then came the realization—oh no, you can't touch this, and you can't touch that. They finally discovered that they couldn’t set any rules in the real world. Here, the law is in charge.

So what now? Can't fight, but can’t hide either? Just give up? As a result, NFTs became unregulated products; when there weren’t enough "products," they relied on "operations." Thus, auctions and NFTs became intertwined.

Auctioning has undoubtedly been the biggest selling point in this wave of NFTs. The enthusiasm of fans exceeded expectations, with one high price after another.

The unclear legal status of NFTs and their subsequent popularity can be traced back to a successful predecessor—Bitcoin. The 12-year journey of Bitcoin has given cryptocurrency enthusiasts a deeper understanding of what a "golden opportunity" is. The number of digits in their crypto wallets reflects their confidence and serves as their bidding capital.

But don’t forget, Bitcoin was born with a clear purpose—to become money. Bitcoin was designed to address potential legal issues, with features like decentralization and peer-to-peer transactions. Otherwise, Bitcoin would have died many times over.

More critically, money is interchangeable and universal; a single unit can express its value clearly. NFTs, however, represent something much more complex, and this complexity requires "translation" to be understood.

Take the Everydays NFT as an example. In the lower middle part of the auction page, you can see two transaction records related to this NFT. The red arrow points to a link that is MetaKovan's proof of ownership of Everydays. This proof is stored on the Ethereum blockchain.

Clicking the link above, you’ll see the page below. Aside from the "MetaKo..." text circled in red, suggesting this is MetaKovan, you can't see the Everydays artwork. In fact, what’s displayed on the blockchain is just a code—the number "40913" after "For." That’s it.

These details need to be "translated" by the company that created the NFT, MakersPlace, on the Opensea platform. Otherwise, no one would know that MetaKovan spent $69 million to buy the collage known as Everydays.

In other words, if you don’t log into the Opensea platform, you wouldn’t know who currently owns Everydays, let alone know about MetaKovan. Clearly, proving ownership of such virtual products is a convoluted process. This highlights the dilemma of digital art NFTs—using the virtual to represent the virtual.

Burning Morons wasn’t just a money-making stunt; it was also an attempt to fundamentally address the legal challenges faced by NFTs.

This intent is revealed in the auction title. "Original Banksy Morons" emphasizes its "original" status. They dared to make this claim because the "physical original" was burned, leaving only the "NFT original."

But this approach is too extreme to be widely adopted. Otherwise, NFTs would become a modern-day "Cultural Revolution" destroying all things old.

Of course, such awkwardness was to be expected. All parties involved in NFT auctions are legal entities, and the artworks represented by NFTs already have a well-established legal framework. The personal and property rights of these works are clearly defined.

It seems that in the real world, NFTs can only exist as unregulated products. But in the virtual world, anything is possible—it’s up to NFTs to cultivate their future, much like Bitcoin did in its early days.

Conclusion

Boundaries matter. Truth and falsehood are often separated by a thin line.

Today, the "unregulated" dilemma of art NFTs is a result of a lack of boundary awareness. In specific contexts, like gaming, NFT rights can be freely defined; but if NFTs want to enter the real world, they must accept one reality: here, the law reigns supreme.

Of course, there’s a way to resolve this issue: by treating NFTs as contracts. Through contracts, the parties involved can clearly define their rights and obligations. However, doing so would complicate the standardization of NFTs and make them harder to explain to the public. Contractualizing NFTs isn’t the best solution.

But if

you understand that every innovation involves breaking boundaries, you’ll realize that discovering and breaking boundaries is a challenge NFTs are bound to face in their development.

Every time we break a boundary, we feel lost; every time we feel lost, we start to doubt ourselves; and every time we doubt, only "belief" can carry us through.

11 years ago, driven by belief, Laszlo Hanyecz bought two pizzas with 10,000 Bitcoins, willingly becoming part of Bitcoin history. Today, driven by belief, MetaKovan spent $69 million on an NFT that’s still an unregulated product. They are both the kind of people Jack Ma described as "those who believe because they see, not those who see because they believe."

Of course, beyond belief, the growth of NFTs also requires time. Time is the greatest magician in our world. We must also have enough patience.

However, we must also admit that NFTs are currently in a bubble.

While bubbles can indicate underlying trends, the current NFT bubble is too large and too widespread. Let’s deflate it a bit, maybe pop a few. Since March 27, 2021, NFT prices and volumes have both fallen. This is a good thing, so don’t rush—take your time. After all, haste makes waste.

By the way, since we’re not in a hurry, remember to eat some pizza today. Think back to May 22nd, 11 years ago, when Laszlo waited four days to spend 10,000 Bitcoins on two pizzas—you’ll feel much better. Also, in December 2013, the Bitcoin community coined the term "HODL." You should look it up.

After all this heavy talk, let’s switch to something lighter. NFTs spark my imagination and make me feel that a new Renaissance is on the horizon.

The Renaissance of the 14th century wouldn’t have been possible without the patronage of the Medici family. The Renaissance of the 21st century will similarly need financial support. Will crypto millionaires step up? If they know Immanuel Kant’s famous quote, I think they will. Who knows—maybe Satoshi Nakamoto is the biggest patron of all.

Kant said: “We are not rich by what we possess but by what we can do without.”

Art belongs to the category of things we can do without. But art allows us to transcend the material, to imagine and create a better world beyond nature. Art can grant us unprecedented spiritual freedom.

If, because of cryptocurrency and NFTs, our world sees new Da Vincis, new Michelangelos, new Raphaels, and countless other new artists, then what a wonderful world it will be.