Every day since the 1st of May 2007, the digital artist Mike Winkelmann (also known as Beeple) has made one example of his work, which he has then posted on his website. As of today, he’s done this 5,420 times. One of these, grouped together under the name of Everydays – The First 5,000 Days, was auctioned off for $69.3 million at Christie’s, which marked one of the record prices for any piece of online art ever sold. Is the world of NFTs taking over the Art universe?

In the world of contemporary and conceptual art, the end of 2021 and the beginning of 2022 has been characterized by the rise of the NFT market. Online artworks have sold for groundbreaking prices, but the concept of private property on the web is still puzzling to some. The mainstream art world has been shaken by what are called NFTs, or Non-Fungible Tokens, as they can completely change the way art is sold.

NFTs are used for non-artistic purposes too. They can be helpful tools for fundraising. For instance, the NGO UkraineDAO, backed by the activist Russian group Pussy Riot, has sold a Ukrainian flag as a digital asset to raise funds to assist the ongoing humanitarian crisis in the country. The Ukraine flag-NFT sold for 6.5 million dollars. However, as the art market becomes increasingly interested in blockchain technology, whether this could be the future of some aspects of artistic output remains in question. 

What is an NFT

NFT stands for ‘Non-Fungible Token‘ that is, a digital asset that can be exchanged using smart NFT stands for ‘Non-Fungible Token.‘ In economics, something that is fungible is a commodity whose essential component parts are interchangeable – gold, for instance, in the form of coins or ingots is something fungible. The tokens in the art world can be exchanged using smart contracts on a blockchain. Smart contracts are agreements written directly into lines of code that need no intermediary. They basically function as a simpler and automated version of a contract. The tokens can vary in their form: they can be images or in-game items such as Cryptokitties – a game where one can breed one’s own cat purchased as a digital asset.

Even songs or tweets can be used as tokens – it says much of their online operating environment that Twitter’s founder Jack Dorsey‘s first tweet sold for $2,915,835.47. In theory, everything which is on the internet can become an NFT if someone decides to mint it. Minting means creating a part of the blockchain that would correspond to the chosen digital object. This process is how any digital object can become fungibly tokenized.

NFTs retain what ultimately is their strongest quality: authenticity– they are simply a way of ensuring private property on the web through a decentralized system. Offline, private property has to be recognized through an external central entity that guarantees the possessor’s legitimacy, such as a lawyer, while with blockchain a decentralized chain of computers continuously verifies the authenticity of NFTs and their legitimate possessors.

The copyright issue

Non-Fungible Tokens have sold for very high prices. In December 2021, the auction house Christie’s, in collaboration with OpenSea, conducted the first online NFT auction by a big auction house featuring Beeple’s work. But this is just the surface of a market that, in fact, takes place mostly online through millions of bids on OpenSea, an online marketplace. These digital assets’ value has been questioned by some who argue that they can be duplicated as one can download any image from Google on their computer. Therefore, some say the tokens are worthless since they can be right-click saved (giving birth to the right-click meme).

The Ethereum team cleared any doubt by reiterating the concept of non-fungibility: anyone can in theory download an image from the web, but that does not make them the owner of that image. Owning an image through a process of certification – they argue – makes you, and nobody else, the certified owner of the digital asset. But the blockchain system does not rely on any centralized body – as the copyright relies on the State. Therefore, legally NFTs ownership is still in a grey area. However, this type of ownership has value as long as owners, buyers, and producers regard it as valuable.

What NFT art looks like

Despite the speculative aspect of the tokens, many artists have found the blockchain system to be an excellent way to sell their work. Especially people working in digital art who, before Non-Fungible Tokens, had to invent ways to physicalize their artworks in order to make a living out of them. This was Beeple‘s case, who used to project his material on-screen as HUMAN ONE, which was subsequently sold through Christie’s in the same auction.

Apart from Beeple, others have turned their physical work into NFTs. These range from well-known names such as Damien Hirst‘s Great Expectations, which was featured as the cover of Drake’s Certified Lover Boy August 2021 album.

Some of the widespread interest in Non-Fungible Tokens came from the Bored Ape collection. This is a set of stylized monkeys with different features.

Each Bored Ape is unique and programmatically generated from over 170 possible traits, including expression, headwear, clothing, and more. All apes are dope, but some are rarer than others.

source : Bored Ape Yacht Club website, https://boredapeyachtclub.com/#/.

Each ape gives the buyer access to the Bored Ape Yacht Club: a member’s club with benefits. One of which consists in having access to THE BATHROOM, a collaborative graffiti board. Basically, Bored Ape Yacht Club is a member’s club but on the Metaverse. The Metaverse is still a broad definition used to describe a future state of the internet where social media and real life will be united through VR (Virtual Reality). Buyers, rather than in the club membership, seem to be more interested in the speculative value of Bored Apes, or in the hype they create.

A never-ending old debate

So, is blockchain the way to make the selling of art more democratic, or is it just the next stage of art’s commodification? This goes back to Marcel Duchamp‘s Fountain (1917). The debate over authorship and authenticity was renewed by the French artist at the beginning of the 1900s, and gave birth to what became known by some as ‘Conceptual Art.’ Duchamp signed a men’s urinal with ‘R. Mutt’ and presented it in an exhibition in 1917, in the process inventing the concept of what would become known as a Readymade:

Everyday objects raised to the dignity of a work of art by the artist’s act of choice.

Marcel Duchamp

Duchamp sold readymade objects which gained value just through the artist’s signature. By doing so, he broke the illusion of the artistic object as something inherently valuable and showed that anything, if signed, could automatically be worth millions. Readymades were conceptually groundbreaking in the way they revealed the fictional and powerful nature of art. Another instance of the readymade is Duchamp’s 1951 Bicycle wheel.

What makes NFTs original is allegedly their unique source code which, in this analogy, plays the role of the artist’s signature. Thus, their value is wholly tied to their originality. However, the concept of scarcity plays a vital role in their economics. Indeed, like a signed artist’s print, they are often sold in collections comprised of a limited number of items.

The big short or the greatest bet?

One could argue that the value of the original continues to be unaltered. NFTs promoters use the example of a Picasso painting. Owning a certified Picasso painting may not differ from having its exact copy on the surface level. Qualitatively, hanging a Picasso copy on one’s wall gives the same result as having the original. A certified Picasso represents an asset whereas the exact copy does not.

Despite this analogy, still, the trickiness lies at the heart of Non-Fungible Tokens. Unlike a Picasso or a house, a Bored Ape (one of the currently most expensive super-rare NFTs) or an ETH has no fixed value. That is, there is a degree of certainty when buying a house that allows its owner a certain degree of financial stability over time. However, since there is no certainty as to whether a Bored Ape or a Cryptokittie will maintain its value, investing in this type of online art is adventurous for those who in the future might sell it again. Nonetheless, NFTs now have the shiny appeal of novelty – and everyone talks about them.

And in the future

There is still much more beyond the speculation, which makes the topic current. In fact, artists whose work requires more than a quick glance to be understood – figuratively less immediate – are now disadvantaged. That is, most buyers are interested in Non-Fungible Tokens for pure speculation given their trendy appeal. In this ocean of new artists, it is still early to discern those who are doing severe intellectual work from those who just hope that their NFT will magically sell for thousands of dollars. However, if the speculation bubble burst, perhaps NFTs can become the tool for online artists to grow.

In conclusion, the tokens are nothing new, and their existence raises the same issues that Duchamp brought to light when he invented readymade objects. The methods of reproduction are quite different from the ones that Duchamp and all his followers had. NFTs encourage the development of online art, but it is still too early to give a clear-cut assessment of what they will signify for its future.