LAST month, somebody bought a 10-year-old animated gif of a flying cat for over half a million dollars. It isn’t some symptom of pandemic panic, nor is it a new scam. Instead, it is all thanks to a tiny piece of code called a non-fungible token, or NFT, that offers an internet solution to a very internet kind of problem.

The problem is that art gains its value from being unique, but when you can download anything online, suddenly art doesn’t seem so valuable. The solution is the NFT, a unique digital token associated with an image or video file that can’t be copied. The NFT is stored on a blockchain – a secure, decentralised digital ledger – just like bitcoins are. Presto! A unique piece of “crypto art” that is worth something.

NFTs have made headlines because creators are selling their crypto art for enormous amounts of money. In mid-February, digital artist Chris Torres sold his 10-year-old meme creation, Nyan Cat, for about $580,000. For those who don’t recall it, Nyan Cat is a gif of a cartoon kitty with the body of a toaster pastry, who runs endlessly to the beat of a Japanese pop song while trailing a sparkly rainbow across a twinkling night sky. Torres remastered the 2011 gif and sold it on crypto art auction site

Anyone can own a copy of the Nyan Cat gif – just as anyone can own prints of a Frieda Kahlo self-portrait – but only one person can have the official gif, identified by its unique NFT. This has been a boon for digital artists, who are finally able to market their work in the way more traditional artists do. On Foundation, you can peruse digital art that runs the gamut from genuinely gorgeous to disturbing or obviously silly. Some are static images, but most are gifs of some kind.

It is hard to explain why the best of these looped videos are mesmerising, just as nobody can fully account for why Nyan Cat was one of the most-watched things on YouTube in 2011. But we all know a good gif when we see it, and for people who have grown up online, that is worth something. If a popular creator is involved, that makes it even more valuable. Musician Grimes auctioned off a collection of crypto art in early March – a few short, sci-fi-themed videos set to original music – and earned almost $6 million.

“We all know a good gif when we see it, and for people who have grown up online, that is worth something”

None of this is being sold for actual dollars or pounds, of course. It is all in cryptocurrencies like bitcoin. Most creators prefer to deal in a cryptocurrency called ethereum, in part because its blockchain offers support for contracts that define how a piece of content can be used.

But NFTs aren’t merely for art snobs. Canadian firm Dapper Labs quickly discovered that basketball fans would pony up thousands of dollars to collect little bursts of video called “Top Shots”, showing awesome plays from several angles. The National Basketball Association teamed up with Dapper Labs to launch a special Top Shots store. There, fans can buy and sell Top Shots with cryptocurrency, and show off their collections. According to CryptoSlam, which monitors NFT markets, Top Shots are the most heavily traded collectibles.

One of the other top-selling collectibles is a digital hipster version of Beanie Babies called CryptoPunks. Created by two artists who run New York-based Larva Labs, CryptoPunks are unique “characters” – 8-bit cartoon heads with slightly different hair, facial expressions, hats and skin colour – that people collect and trade using ethereum. It sounds bonkers until you consider how much money people pay for digital objects inside their favourite games. Or for Magic: The Gathering cards. We like to collect things, regardless of whether they are made of bits or atoms.

Looked at from one angle, crypto art promises to do what great art has always done: turn an ephemeral moment into something enduring, something that can be owned. This seems especially needed on the internet, where creative content is often treated as expendable trash precisely because it is so easy to make copies.

At the same time, many of the big NFT sales feel like capitalist stunts, a new flavour of the get-rich-quick schemes associated with cryptocurrencies. Like crypto coins, NFTs have to be “mined” using mathematical calculations that are resource-intensive, slurping up energy to power servers that quickly turn into piles of electronic waste. Some artists may be making money, but our CryptoPunk and Top Shots habits are terrible for the planet.

There is also a basic question about whether we need blockchain technology to recreate the experience of collecting unique art. As author Robin Sloan pointed out, after experimenting with selling tokenised amulets bearing tiny poems, the whole thing might be better handled by using a simple spreadsheet.