Are people paying millions for a jpeg? And are pixelated punk portraits and cartoon cats really a glimpse into the future of art? As with all disruptive innovations, the answer is yes and no.
By now, it’s impossible to not have heard of NFTs. Even if you haven’t yet been quite ready to dive into that means (it stands for Non-Fungible Tokens, btw, and yes, we will go there in this article), the term has been on the breath of every art influencer worth their salt, if not already added into their job title.
Indeed, 2021 is the year where digital art truly came into its own, i.e. brought record volumes into the art market. Part of this is due to the overall increasing acceptance of digital art markets: covid providing that needed push to the art world, as it did with numerous industries still dragging their heels at going all-in on digital experiences, financial services and in particular wealth management, being another front-runner and one that converges here. This year, contemporary art auctions hit an all-time high of $2.7bn, according to Artprice’s contemporary art market annual report, with the new category of NFTs reaching $127.6m.
NFTs are digitally signed tokens that have certified unique ownership. The ownership of each of these unique individual tokens or NFTs can be digitally verified via blockchain technology. This is what fundamental separates an NFT from right-click/saving a .jpg or taking a screenshot – the NFT is the unique digital signature associated to a digital file which proves its ownership. Yes, indeed: finally a use case for digital, immutable public ledgers. Digital ownership and scarcity is thereby made proveable (via math and code), opening up the avenue for many novel use cases as we begin to transition our lives into the metaverse. In the meantime, digital art and collectables are coming out as the frontrunner.
The first emergence of art on the blockchain can be dated back to 2011, to technologist Dan Kaminsky’s ASCII art on the bitcoin blockchain.
From 2014 – 2016, experiments began on the Counterparty blockchain, recently revived with the renewed interest in Rare Pepes, frog memes which anyone could create but which required sign-off as to their rareness by the experts at the Rare Pepe Directory. 2017 brought the first of the most familiar names, some of which are considered today’s “Blue Chip” NFTs, including CryptoPunks, Mooncats and Ether Rocks. But it was with CryptoKitties in late 2017 that NFTs began to hit the mainstream media. From there, numerous digital art focused NFT marketplaces whose names are much more familiar today began to emerge, such as SuperRare and OpenSea. And it’s still such early days.
One of the most interesting aspects is what this technological infrastructure enables financially, both for artists and buyers. NFT creators (which may be the artist themselves, or a collective including the artist – note it could also be someone else entirely) are able to create ongoing revenue by adding royalty fees across future sales of the NFT. For buyers for whom a single piece may be too costly, there are numerous platforms and providers offering fractionalised purchasing. As that may still be too centralised for some, there are DAOs, decentralised autonomous organisations – which can be likened to cooperatives – where funds are pooled for collective purchases.
This past year has brought incredible growth – and pretty interesting activities – in the NFT space
- Christie’s hosts the first public auction of an NFT, selling an NFT of a digital artwork by US artist Beeple for $69.3m USD – the third-highest price achieved by a living artist; a reported 22 million people logged in for the auction, an estimated 60% of whom were under the age of 40
- DeFi exchange protocol Injective bought a 2006 screenprint by artist Banksy, ‘Morons’, for $95,000, turned the piece into an NFT and subsequently burnt the original, selling the NFT version for $380,000
- PleasrDAO: this collective of decentralized finance players, NFT collectors and digital artists has so far this year tokenised the original Doge meme, purchased Edward Snowden’s “Stay Free” artwork and turned the infamous Wu-Tang Clan’s one-of-a-kind unreleased album Once Upon a Time in Shaolin into an NFT.
Looking to learn more? Check out these icons and fountains of NFT knowledge:
nftnow: Co-founded by former SPIN editor-in-chief Matt Medved, this NFT-focused publication is the go-to-resource for news, tutorials and more
Pplpleasr: the highest of high quality meme generators, pplpleasr is a multi-disciplinary artist based in NYC who has been active in the crypto space since 2017 and since emerged as a leader of the movement as the art and crypto worlds converge
Rarity.tools: one of the sites with which you can find the actual data behind “looks rare”
Gremplin: the artist behind Nouns, one of the most fascinating projects in the NFT space which auctions a piece of art daily, and most recent collectibles CryptoToadz
FEWOCiOUS: This 18 year old artist has found himself a home at the forefront of NFTs, to which his recent #FEWOCiOUSxSOTHEBYS auction is a strong testament
Marguerite deCourcelle: Under her pseudonym Coinartist, Margaurite has been active in merging art and blockchain technology before most people had ever heard the term; not only an artist, she is CEO of blockchain game studio Blockade Games.
ERC-721 Non-Fungible Token Standard: Read up on the standard behind Ethereum-based NFTs with this Ethereal Foundation documentation
Words: Diana Biggs, (Global Editor)
