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“The Art World is Going Digital Over NFT”

When graphic designer Mike Winkelmann started producing a drawing a day in 2007, he was simply looking for a way to improve his art skills. At best, the resulting “Everydays” project would help him promote his freelance work, which includes creating concert visuals for the likes of Justin Bieber and Katy Perry. But selling the digital images was not on his mind. In March, a compilation of over 13 years’ worth of the artworks, collectively titled “Everydays: The First 5000 days,” sold for $69.3 million via Christie’s, putting Winkelmann’s name among some of the art market’s most valuable living artists.
Elsewhere, a digital animation of the “Nyan Cat” meme — a flying cat with a Pop Tart for a body — earned its creator Christopher Torres almost $600,000 in a virtual auction. The musician Grimes meanwhile made $6.3 million in under 20 minutes selling a range of collectible digital artworks. And most recently, Sotheby’s held its first-ever NFT Auction of digital works from the anonymous artist Pak, reporting a total of $17 million across a three-day sale.
Virtual or digital art has been created, and talked about, for years. But now, thanks to endorsements from celebrities, the online buzz in art and cryptocurrency circles, the market engagement of top auction houses, and, perhaps most importantly, NFT (non-fungible’ tokens) blockchain technology, it has not only entered the mainstream — it is generating huge sums of money for digital artists and online collectors.
While an oil painting can only be displayed in one place and has a definitive owner, a digital image, video, or gif can be infinitely duplicated and enjoyed on screens around the world for free. This has often posed problems for prospective collectors, who don’t know how to price digital art and fear it will lose resale value. NFTs offer two things that the physical art market has always depended on – scarcity and authenticity.
NFTs are built on blockchain technology, which — just as it does with Bitcoin — offers a secure record of transactions for “tokens” that can be kept in a virtual wallet This digital ledger serves as incorruptible proof of ownership, meaning that “original” artworks and their owners can always be identified via the blockchain, even if an image or video is widely replicated. NFTs can then be sold or traded, often gaining value in the secondary market. It also allows artists to sell their work directly to buyers in a way that can marginalize the traditional middle market of dealers and auction houses but perhaps ‘democratize’ the art world.
But if what you are buying is so easily replicable, why is it worth millions to own the original? Unlike paintings or prints, you cannot touch a digital image or hang it on the wall. So what is it buyers are actually buying? And why?
A survey conducted in 2019 among buyers of digital art hoped to add insight to that question. Half of the respondents were over 40 years old, and a huge majority, 90%, owned more than 10 pieces of digital art (and 23% own more than 100), indicating a highly active community. Thirty-five percent of respondents volunteered that they themselves were artists. When asked, “What drew you to make [your digital art purchase(s)], respondents replied:
– “Being a crpto-artist by myself[sic], I mostly bought pieces of fellow artists that I liked.”
– “I feel it is a natural step into the future of art. The technology is here and it will not go away.”
– “I was drawn to it mainly by the desire to participate in some way. To be frank I think the experience of acquiring digital art has a long way to go.”
– “I own CryptoPunks and Rare Pepes because they were pioneering projects in the space and inspired a lot of innovation. My favorite project is, where I am an active collector.”
– “I have a growing collection of rare digital art from many artists. Some I bought by following a trend or influencer; others I purchased because I loved the work.”
– “The internet is the medium for today’s art. It lives everywhere all at once and can be appreciated by anyone without requiring access to museums or galleries.”
Once they take ownership of their pieces, what do people do with them? Some make physical prints of their digital images. Some use digital images as avatars on their various social media platforms. Others set them as backdrops on their smartphones and other gadgets. One respondent has created a digital display case mounted to their wall to exhibit their various works.
There is enormous variation in what can be called digital art — from a GIF file to a room-sized interactive installation. Of the more complex and multi-dimensional works, how a collector chooses to maintain and display the work after purchase remains a specialized undertaking. This is true when collecting any blue-chip, non-digital work of art, too: it is an elite activity for the few who can afford custom solutions.
This is still an emerging investment opportunity and like anything new that comes along, especially in the art world, time will give it traction, and unknowns will find their audience. This is a rapidly evolving marketplace and one not easily understood by traditional collectors who appreciate tangible objects. But as we look to the future of collecting art, or even memorabilia for that matter, we need to keep an open mind and rethink what we collect, and how.
For more information on this emerging topic, please read the following used to source this article: