- Contemporary artist Krista Kim told CNBC she sees NFTs playing a key role in an augmented reality future.
- I actually foresee that we will be living in an augmented reality lifestyle within a very short period," added Kim.
- Kim recently sold an NFT digital house in a transaction valued at more than $500,000.
The creation — called Mars House — is part of Kim's grand vision for the role augmented reality will play in the world, she explained in an interview on CNBC's "Squawk Alley."
"Right now, a lot of the [NFT] art that's currently available on platforms, it's a very limited parameter of how you can present the art," Kim said Wednesday. "It's presented, basically, as a digital file, a beautiful drawing or video on your screen, but my intention was to look beyond that."
The new owner of Mars House, she said, will be able to upload the file into various metaverses -- 3D immersive worlds -- and experience the digital real estate there. She said Mars House represents the "next generation of NFT art."
"For me, I actually foresee that we will be living in an augmented reality lifestyle within a very short period," Kim said, predicting it could happen in "a couple years."
Augmented and virtual reality are key to providing a more immersive experience for these worlds. AR is technology that superimposes computer-generated images over real-world views, while VR goes further into a complete virtual space. Both have historically been associated with some sort of wearable headset or glasses.
Facebook's Oculus is a well-known brand making virtual reality headsets, and the social media giant's CEO, Mark Zuckerberg, has predicted big advances around AR and VR in the coming decade. Facebook plans to release smart glasses later this year.
Kim sees a central role for NFTs as the so-called AR lifestyle progresses.
"We're all going to be decorating our environments and our personal space, our fashion," she said. "Just like tattoos. People express themselves with tattoos. It's an art form. Well, people are also going to express themselves with digital ... assets and decorative pieces and collectibles, fashion, accessories."
NFTs are blockchain-based assets that are unique by design, and their popularity has boomed in recent months. Among their most critical characteristics, proponents say, is allowing for documented ownership of digital items.
Ownership of a particular NFT is recorded on distributed digital ledgers known as a blockchain, which also are used to power cryptocurrencies such as bitcoin. A range of assets are already being sold as NFTs, including basketball highlights, old tweets and a rock album. Recently, RTFKT Studios sold a collection of NFT-minted digital sneakers for the metaverse.
Historic auction houses known for selling multi-million dollar paintings have entered the crypto collectible fray, too. Last week, an NFT collage from the artist Beeple sold at a Christie's auction for $69 million. On Tuesday, Sotheby's announced a partnership with digital artist Pak.
Critics have dismissed the NFT boom as a flash in the pan destined to fade over time, and some note their soaring popularity — and what people are willing to pay for them — has coincided with a major rally in the value of many cryptocurrencies.
NFTs are "new for all of us," Sotheby's CEO Charles Stewart told CNBC on Tuesday. "But there's a lot here that's really exciting and we think has staying power."
Kim agreed, saying that "NFTs matched with art has a very strong value proposition because it does appreciate in value over time because it's a social asset."