The Future of the Art Market: NFTs and Crypto Art
Before I read about Beeple’s work, Everydays: The First 5000 Days, I had no idea what an NFT was and had never even thought about digital art. Yet this caught my attention. I have spent the last year and half doing my degree online. I have had to tour galleries, view exhibitions, and write my essays through purely online resources so it makes perfect sense that the Art Market is responding to this digital Renaissance. The blockchain was launched in 2008 and we have all heard of the cryptocurrency bitcoin, which runs on a blockchain paradigm. The Blockchain is, in simple terms, a type of database which stores information through blocks that are chained together- hence the name. It is decentralised, thus giving no control to a single person or group. The decentralised blockchains are immutable, which means that they are irreversible, and therefore every transaction that is made through the blockchain is recorded permanently.
What does this mean in terms of art?
Well… Crypto art that is sold and bought through the blockchain would benefit from the same principles I previously stated. A permanent record of the works would prevent art forgery and validate provenance, which is a common issue faced by digital artists due to the accessibility of reproductions of their works. But digital art also opens a new type of art market, with new buyers and a new approach. In terms of transaction costs, the blockchain art market could democratize fine art investments by reducing the transaction fees and essentially opening an art stock market with greater accessibility. To simplify this, it is open to everyone.
What is an NFT?
NFT stands for Non-fungible token. This means that the tokens are completely individual and are unduplicable. The tokens are linked to specific piece of art and when you buy an NFT you are purchasing both the code and work attached to it. You may have read about Christie’s, one of the world’s leading auction houses, and how they sold their first purely digital artwork with a unique NFT, and accepted cryptocurrency (most commonly used are Bitcoin or Ethereum). The work was minted for Christie’s and is a monumental digital collage that was sold on 11 March for $69.3 million. The artist, who goes by Beeple, is Mike Winkelmann. His twitter never fails to make me laugh as on 11th March, just after the work was sold, he simply tweeted,’ holy fuck.’ My thoughts exactly.
So, is this the future of the Art Market?
Now this is a massive question because who knows… but my thoughts are yes. People worry about the environmental implications of minting NFTs, but there are solutions that are being developed to allow this new genre of art to grow in a sustainable way. To put it into perspective, Beeple’s work generated 76,567 kg of CO2, which is the same amount of electricity used by around 13 homes in one year… not great. However, jumping onto this digital bandwagon is artist Damien Hirst. The Art Newspaper announced last week that ‘a group of some of the biggest players in blockchain, including Ethereum and ConsenSys co-founder Joe Lubin, have announced the launch of Palm, an alternative network for NFTs that is 99% more energy efficient than the current Ethereum blockchain’ (Anny Shaw, The Art Newspaper, 30th March 2021). Hirst tweeted that he was engaging in a new project called ‘The Currency Project’ which utilises NFTs and cryptocurrency in a, supposedly, sustainable way. This project was orchestrated alongside the HENI group, an international art service. The co-founder, Joe Hage, stated that,’ digital art is an increasingly important medium for many artists and combining it with the blockchain, through NFTs, is an obvious development; allowing transparency and clear proof of ownership. HENI is planning some exciting NFT projects to be announced very soon.’ (Hage, fadmagazine.com)
My thoughts about NFTs and digital art is that they are an innovation. The fact that the leading artists of today are getting involved with a digital phenomenon, that some people have referred to as a fad, is a testament to where this can go. Sotheby’s have now caught on board and announced the future auctioning of a work made by NFT artist Pak. This ‘trend’ is spreading like wildfire. It is all I have read about and I think that rather than seeing it as a by-product to cryptocurrency, which for some makes it confusing, view it as a new genre of art. Digital art has been around since the 60s but its only recently that artists are using the blockchain technology to create artworks which collectors and investors can get on board with. The inclusivity of crypto art, which is due to the fundaments of blockchain technology, have opened up a new market of buyers to a new style of art which is celebrating the digital age.
Now I am new to this, but I find it fascinating, so I will be trying to keep you all updated with the new movements of crypto art and NFTs.