Mattel (MAT) has joined the cryptocurrency craze. The toymaker will offer three pieces of digital art in the form of nonfungible tokens, or NFTs, for auction on its Mattel Creations website. The digital art sale will feature several iconic Hot Wheels vehicles in the Hot Wheels NFT Garage Series. The one-of-a-kind works will feature classic cars in their original colors from the initial release:
- The Twin Mill was designed in 1968 as a sleek racer with twin big-block engines.
The Bone Shaker is a hot-rod-style machine with a skull and bones theme.- Finally, the Deroa II represents one of the original 16 cars Mattel released. The model has a bubble windshield, an engine in the back, and a pair of surfboards.
The virtual cars will be auctioned off, beginning on June 22, 2021, at noon Eastern. The auction will run for a week. Mattel is only accepting the cryptocurrency Ethereum (ETH). Bidding starts at $0.99. With only one NFT of each car being created, prices could soar.
Mattel planning more NFT collections
Mattel has stated that it was already in the planning stages to release similar NFT auctions for other intellectual properties. CEO Richard Dickson stated that the Hot Wheels NFT move is part of Mattel’s effort to remain relevant by evolving toys into digital art. “Part of our effort to make Mattel relevant is to make sure that our brands are timeless and timely … We need to be on top of current conversations.”
Some examples of brands owned by Mattel that could release NFTs include:
- American Girl,
- Barbie,
- Fisher-Price,
- Masters of the Universe, and
- Matchbox.
What is an NFT
NFTs are non-fungible tokens. An NFT is a piece of digital content that you own that still retains the creator’s information. For instance, artists can sign their artwork by including their signature in an NFT’s metadata. The creator’s information is maintained in the blockchain. Unlike bitcoin (BTC), which also uses a blockchain, you can’t trade an NFTs for a pizza, because the NFT is not fungible. Fungibility is the ability to substitute one unit of a financial instrument for another unit of the same financial instrument. Every dollar or bitcoin has the same value at the same time.
Each NFT is attached to a specific digital asset i.e. a piece of art, or a picture of a Hot Wheels car. An NFT is a unique, digital version of a certificate of authenticity, publicly approved by the blockchain and not money. NFTs have become popular in the art world because they allow artists to have more control over their works by selling limited-edition digital goods directly to consumers.
Forbes explains that Blockchain technology and NFTs offer content creators a unique opportunity to monetize their wares. For example, artists no longer have to rely on galleries or auction houses to sell their art. Instead, the artist can sell it directly to the consumer as an NFT, which also lets them keep more of the profits. In addition, artists can program in royalties so they’ll receive a percentage of sales whenever their art is sold to a new owner. This is an attractive feature as artists generally do not receive future proceeds after their art is first sold.
NFTs environmental impact
Then there is the environmental impact of NFTs, which has attracted real scrutiny. The computing power required to operate the underlying blockchain system of NFTs is immense. By some estimates, one crypto transaction could gobble up more power than the average U.S. household uses in a single day. One artist estimated that generating six NFT pieces consumed more electricity than his entire physical studio did in two years.
Other firms jumping into NFTs
Other firms jumping into the NFT game include:
- CNN
- The New York Times, and
- The NBA
- A Lebron James NFT trading card sold for $208,000.
- Twitter co-founder Jack Dorsey sold his first-ever tweet as an NFT for more than $2.9 million.
- EVERYDAYS: THE FIRST 5000 DAYS, artwork, created by digital artist Mike “Beeple” Winkelmann, sold for $69.3 million at Christie’s.
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Some people believe this is the future of buying, selling, and trading assets. But critics say the market could crash if cryptocurrencies tumble.
What do you think?
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Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.
