There’s been a lot of stories in the news about NFT art recently. And for good reason, it has become the new investment hot ticket, catapulted into the spotlight by Beeple’s extraordinary sale of his artwork ‘Everydays: The First 5000 Days’ at Christie’s. This piece – a digital artwork with an authenticating NFT (non fungible token) – sold for $69.3m, which places it as one of the top 3 highest sales for a living artist.
So, it’s a great moment to use those column inches to raise the profile of the arts, especially for digital work. But how much do NFTs help to engage audiences with art? And at what cost?
NFTs can relate to a broad range of digital assets, from film clips to trading cards. NFT art can describe work in any media, from a digitised copy of an oil painting, to virtual architecture.
It’s digital art where NFTs have been a real game-changer. Previously, the ease of copying digital art was a barrier in developing its commercial value. NFTs changed that – providing a collectable, secure token that represents an artwork. In this, they place digital art on a level playing field with traditional media for collectors and investors. And NFTs go further to recognise digital artists – they have commission built-in, so that each time they are traded, the artists get a cut of the profit. Plus, NFTs are relatively easy to register and so barriers to entry for artists are low.
NFTs undoubtedly have excellent potential for commoditising digital art, and make it possible for more artists to make more money, and so support the wider development of the art form.
Specialist marketplaces, such as SuperRare and Nifty Gateway, offer a curated experience and are experts at generating hype and high-value sales.
Yet, NFT art is also pitched to be widely accessible, and sales are not only high value. Digital artists are selling NFT originals and editions at a wide range of price points, opening up art collecting to new audiences. For example, Beeple sells editions from the ‘Everydays’ series that can cost as little as $1.
While NFTs are newly emerging, digital art is well established. Since teamLabBorderless opened the world’s first Digital Art Museum in 2018, many more specialised galleries have opened around the world. Digital art installations attract huge audiences, like the touring Van Gogh Alive experience, which has already shown in 65 cities and is set to open in London this summer. And digital art has been adopted in a wide range of contexts, for example, Chelsea and Westminster Hospitals have just launched an interactive AI art installation that contributes to mental wellbeing.
So digital art is great for engagement. But do NFTs, and the buzz around them, contribute to the art form, or do they distract from it?
In March 2021, blockchain firm Injective Protocol set fire to a Banksy print, filmed it, then sold the film as an NFT for $380,000.
The action was derided as a ‘money-making stunt’ (BBC News).
The stunt was money-making – the Banksy print that Injective Protocol burnt had cost them $95,000. And their choice of print, ‘Morons’, an image of an auction room, also commented on the potential of NFT art to disrupt the establishment (although this was somewhat ironic, given that Beeple’s sale at Christie’s took place just a few days later).
The Banksy burning highlights an important point – minting an NFT places the value of the work on the NFT – not the actual piece itself.
In general, NFTs are a tradeable token that exists on the blockchain, the technology that runs cryptocurrency. And the way that NFT art is traded appears more like a currency than the art market. It seems to get flipped often – being bought to make a quick buck in what is a rapidly booming market. This is quite different from traditional art collecting, where work is usually bought to be kept and enjoyed.
So are NFTs supporting digital art, or is art feeding the NFT market?
The concepts that underpin NFT art are complex, and still alien to many. This is a market with its own currencies, with galleries in the metaverse, and its own lexicon. NFT, blockchains, cryptocurrency, Eth – these are words from a whole new world.
And this new world is inhabited by a small, but rapidly growing segment of the population. For example, Coinbase (the most popular cryptocurrency service) reported a rise from 13mn registered users to 35mn in just two years. In context, there are over 1.1billion Visa credit card users worldwide.
While digital art has proven its ability to reach out and engage new audiences, NFT art speaks to a select group. Add the complex language to the high-value sales that we see in the news and NFT art appears at first glance to be accessible to only a privileged few.
Yet it seems highly likely that NFTs can become mainstream, but this will take time. And concerns that the NFT art market is a bubble means that it may pop before wider audiences get to grips with it.
NFTs have some wider issues to overcome if they are to be successful long term, and art may be the ideal way to explore them.
Some of the most pressing questions hang over ownership and copyright. This value of NFT art hinges on a central concept – that the NFT represents a genuine digital work, and then it is the NFT that is unique and secure. While specialist art marketplaces offer guarantees that the work is legitimate, it’s still possible to mint an NFT for a work that you do not actually have any rights to. We saw this in action when Global Art Museum minted NFTs for famous works from major museums and put them for sale.
These are issues that will only become clear when tested in court.
NFTs are also costly in environmental terms. It takes vast amounts of electricity to create the sophisticated encryption that makes them so secure and therefore, valuable. In response to this, Damien Hirst is collaborating with Palm, a sustainable NFT ecosystem, for his venture into the field. He’s releasing a 10,0000 NFT work – entertainingly titled ‘The Currency Project’.
The NFT art rush has created a golden opportunity for artists and collectors to profit, but is considered by many to be a fad fuelled by speculative investors.
But once this initial furore dies down, the technology offers an opportunity for adding value to digital art, giving artists more control and reaching new audiences.
And this hinges on the NFT art market becoming sustainable. Let’s hope the bubble does not pop anytime soon.