You walk into a gallery and you see people sticking pins into an artist and cutting off her clothes. That is the shocking piece by Marina Abramovic in 1974, who is known as the “godmother of performance art”.
You may find it hard to understand, but after all, art is subjective. Now, be prepared for a new type of creative commodity. The idea of which, can probably cause some confusion – or even disbelief.
NFTs are currently taking the art world by storm.
The Nyan Cat meme sold for almost US$600,000 in February this year through a NFT transaction. Twitter’s founder Jack Dorsey auctioned off his first Tweet as a NFT for US$2.5mil, a month later.
The two cases above are part of a rising new trend. They are known as NFT art sales. The general public, especially those who are not familiar with digital assets, may find the idea rather incredulous.
Why pay such huge sums of money for something you cannot touch or hold?
Remember, performance art is also largely intangible. It is the experience that matters, and the conversations sparked.
A large part of any artistic endeavour is about allowing self-expression. NFTs, short for non-fungible tokens, allow just this. They can be used to represent value in items such as photos, videos, audio and other types of digital files.
NFT art is bought and sold online, frequently with cryptocurrency, and generally encoded with blockchain. This makes each piece unique. The digital signature offers value and authenticity.
“Essentially, NFTs create digital scarcity,” explains Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures, in an interview with Forbes.
Tangible value of the intangible
The most expensive NFT art in history is one that sold for US$69.3mil. It was created by digital artist Mike Winklemann (better known as Beeple). He crafted a composite of 5,000 daily drawings, which he titled Everydays: The First 5000 Days.
Again, why pay for art that you can easily download or screenshot?
The answer lies in the built-in tamper-proof blockchain authentication, which serves as proof of ownership. NFT art collectors put value in such digital bragging rights.
To understand even better, you need to know the concept of NFTs. Physical money we use for example, is “fungible” – meaning that it can be traded or exchanged between types of currency.
NFTs are the opposite. Each has a digital signature that makes it impossible for them to be exchanged for or equal to one another. Simply because they are – in concept – never the same.
In February, a NFT of an NBA Top Shot video clip showing a dunk by basketball superstar LeBron James sold for more than US$200,000. In essence, that video clip is unique and its value (while can be quantified in currency) is not comparable to any other NFT art.
The exclusive ownership rights is digitally locked to one owner. Thus, a NFT art is seen as collector’s item.
Credit: Compare Fibre | Unsplash
Additionally, artists can programme in royalties using blockchain – so they receive a percentage of sales whenever their art is sold to a new owner.
This shift in power can also be seen in how NFTs are infiltrating music. Kings Of Leon released its album as NFT copies in March this year, considered to be the first time such a thing has happened in the industry.
Proponents are saying that this will help out artistes, as NFT sales can cut out the middlemen – music producers, labels and streaming platforms. It gives the musicians the power to sell their works straight to fans.
Linkin Park co-founder Mike Shinoda explained this in a series of tweets after receiving a huge bid for one of his NFTs.
“Even if I upload the full version of the contained song to DSPs [digital service providers] worldwide,” he boldly pointed out on Twitter, “I would never get even close to $10,000, after fees by DSPs, label, marketing.”
As for the Kings Of Leon album – the sales generated close to US$2mil. Unsold editions were “burned” at the end of the auction, which only increased the scarcity of what fans bought.
Buying into a digital craze
NFT in the art world is not exactly new thought – only the trend is.
The first of such an item was created in 2014 by artist Kevin McCoy. It took the form of an octagon-shaped animation tied to a digital certificate of ownership. The term NFT only came about three years after that.
This year, the industry saw a boom in NFT art. Insiders attribute the growth in popularity to Covid-19, where physical shows and events are banned.
“A bunch of people like me have seen their work go completely”, Beeple told The Art Newspaper in March. In the past, he has worked on concert visuals for some of the world’s most famous musicians.
“I’ve gone from doing big shows, with Justin Bieber filling 70,000 people in a stadium, to nothing for the second year running. So NFTs have been a godsend for us in terms of being able to make money again.”
And this money train is not stopping for the art industry.
Sales soared to more than US$2bil in the first quarter – more than 20 times the volume of the previous quarter, according to a report from nonfungible.com.
Physical NFT art galleries – oxymoronic as it seems – are also becoming a thing.
A fully carbon negative space opened in New York City about three months ago, showcasing digital artworks in real life by using high-resolution screens. The Superchief Gallery exhibition drew curious crowds.
And do pay attention to the label of it being “carbon negative”, as NFT art is getting called out for harming the environment. Cryptocurrencies used to buy and sell them have been linked to tons of planet-heating carbon dioxide emissions generated.
Say, if someone buys a NFT art using Ethereum, they are held responsible for some of the emissions generated by the activity of mining such a cryptocurrency.
It can be debatable, but the negative association of NFT art with pollution is taking hold.
“Many NFT transactions send a stronger economic signal to the miners which may lead to increased emissions,” Susanne Kohler, a PhD fellow who researches sustainable blockchain technologies at Denmark’s Aalborg University, told The Verge.
Whether NFT art will survive the strong lobbying for sustainability remains to be seen. What is for sure, the rising trend of these digital assets is something the industry cannot ignore – booming as it is right now.
Cover Credit: Yuyeung Lau | Unsplash
Writer | Jake Thanh
Jake Thanh does not see himself as cultured – because he is not a yogurt. He instead prefers being viewed as a person in touch with the world, and all the wonderful experiences that come with living life to the fullest.