Is it art? NFTs and the surge of digital ownership.
In March, Kenny Schachter proclaimed that he鈥檇 auctioned off his grandmother on the internet. The digital artist had uploaded an image of his long-deceased matriarch to the web and sold the rights to it as a nonfungible token (NFT). It was a prankish test of the boundaries of a technology that has the art world abuzz.
NFTs are certificates of ownership of a unique digital item such as a video, recording, or cyber artwork. These digital receipts reside on the blockchain (a digital ledger). Once an NFT has been 鈥渕inted鈥� 鈥� its code permanently woven into the blockchain鈥檚 DNA-like digital strands 鈥� it can be bought or sold with a cybercurrency, currently Ethereum. In March, an artist who calls himself Beeple auctioned a mosaic of digital images as an NFT that fetched the equivalent of more than $69 million.聽
In the case of Mr. Schachter, 鈥淚 found myself repeating again and again that everyone and their grandmother were minting NFTs. So it occurred to me, I might as well mint mine,鈥� he says via email. 鈥淚 immortalized her in the ether, literally.鈥澛犅�
Why We Wrote This
In the art world, value has traditionally been based upon scarcity. But nonfungible tokens, or NFTs, are monetizing freely available digital items by placing valuation on the idea rather than the possession of a physical object.
The New York City-based artist was making a point about how NFTs have upended traditional appraisals of art. Now, he muses that the several thousand dollar sale may have been too cheap.
The monetary value of expensive fine art is often driven by scarcity and uniqueness. That鈥檚 why Parisian galleries started to limit and individually number the prints they sold in the late 19th century. But rarity isn鈥檛 an inherent quality in digital art. Cyber artworks are freely accessible online (Beeple鈥檚 pricey artwork is on his Instagram account) and infinitely replicable. Yet NFTs allow their owners to claim ownership of an intangible digital asset, which, at its core, consists of computer coding. It doesn鈥檛 mean they truly possess that combination of ones and zeros any more than someone could have dibs on 2+2=4.
So what, exactly, are NFT collectors valuing? Observers say that the purchase of these digital receipts is best understood as a form of patronage 鈥� a monetary appreciation for the idea and the creator behind a piece of cyber art. The value of the NFT itself comes in the form of bragging rights for having one鈥檚 name associated with that cyber artwork. That makes it a collectable asset. The technological innovation has inverted the traditional model of the art market by attaching value to artworks that are ubiquitous rather than scarce. Consequently, NFTs have rapidly expanded the demand for digital art forms that haven鈥檛 always been valued as much as physical paintings, sculptures, and installations.聽
鈥淰alue isn鈥檛 based on scarcity anymore 鈥� it鈥檚 based on virality,鈥� says Wade Wallerstein, co-director of TRANSFER, a gallery whose new digital exhibition, 鈥淧ieces of Me,鈥� winkingly bills itself as partaking in 鈥渢he aggregate hype鈥� of NFTs. 鈥淭he more places that thing exists, the more valuable it is in our current economy.鈥�
As an example, Mr. Wallerstein points to the $590,000 NFT for . The meme of the flying feline 鈥� rendered in basic, Lego-like block form 鈥� is fairly well known. That increases its value as an NFT. The owners of such works can boast that the NFT is in their digital wallet on the blockchain. Think of it as the equivalent of the description plate next to a painting in an art museum with the name of the owner who鈥檚 loaned it to the gallery.聽
鈥淎 lot of art collectors, as we traditionally think of them, are not really collecting NFTs,鈥� says Brian Droitcour, an associate editor at Art in America. 鈥淭he people who are collecting NFTs are the people who own a lot of cryptocurrency. And so for them, it鈥檚 probably starting an art collection, but it鈥檚 also about building a portfolio of assets on the blockchain. We saw with the Beeple sale that that work was bought by MetaKovan聽[Vignesh Sundaresan], who is a Bitcoin billionaire,鈥澛燼nd also holds a large sum of Ethereum.
Traditional, older art collectors may value things that can be displayed in a gallery. But for millennials and Generation Z who have grown up in an increasingly digitized world, ownership of physical objects isn鈥檛 necessarily a high priority. Music, movies, books, and photos live in the cloud. So they鈥檙e happy to buy NFTs of cybercreations that they carry around on their phones and view on cryptoart platforms such as Foundation.app.
鈥淭hey are invested in stuff. It鈥檚 just not the physical stuff. It鈥檚 stuff that they鈥檝e been used to working with their entire life 鈥� words and pictures and ones and zeros,鈥� says George Fifield, director of the Boston Cyberarts Gallery and founder of the nonprofit Boston Cyberarts Inc. It goes back to the theories of French American sculptor Marcel Duchamp, says Mr. Fifield, that 鈥渁rt is the idea, not the thing.鈥�
The gap between the traditional art collector and the NFT collector is slightly narrower than before. The world鈥檚 two most famous auction houses, Sotheby鈥檚 and Christie鈥檚, are now accepting bids for NFTs. And though some famous artists such as David Hockney (who creates art on his iPad) have publicly expressed distaste for the tokens, others such as Damien Hirst have just begun selling NFTs of digital artwork.
Basketball and tweets, too
It鈥檚 not just fine artists who are minting NFTs, which are now topical enough that 鈥淪aturday Night Live鈥� recently created a sketch them. You can buy NFTs for short videos of NBA stars. (A slam dunk by LeBron James can net $200,000.)聽They鈥檙e the new digital version of baseball trading cards. The rock band Kings of Leon sold tokens for its latest album. Twitter CEO Jack Dorsey sold his very first tweet as an NFT for more than $2.9 million 鈥� perhaps the 21st-century equivalent of a Picasso doodle on a napkin that subsequently fetches a fortune. Consequently, some observers claim that NFTs are a speculative bubble. David Gerard, author of 鈥淎ttack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts,鈥� went even further by calling NFTs 鈥渇raudulent magic beans鈥� in a blog post. That might explain how someone was able to sell a recording of his flatulence as an NFT for $85.聽
Part of the culture of the cryptoenthusiasts who mint NFTs has been bypassing the gatekeepers of the art world, says Mr. Schachter, the veteran digital artist and columnist for ArtNet. But now NFT brokerage houses are having to act as gatekeepers themselves. They have suddenly been deluged with requests from late-adopter artists.聽
鈥淚t鈥檚 so important to me democratically, nonhierarchically speaking, that my work is disseminated to all and anyone who wants to see it,鈥� says Mr. Schachter, who is curating an NFT exhibition called 鈥淏readcrumbs,鈥� opening April 23 at the Nagel Draxler gallery in Cologne, Germany. 鈥淏readcrumbs鈥� resembles a traditional art exhibition with physical representations in the form of computer monitors on walls, installations of text, and 3D prints made from digital files. 鈥淭here鈥檚 no metaphysical difference from my art that鈥檚 on Vimeo or you buying my NFT. It鈥檚 just that you鈥檙e buying this certificate of authenticity from the blockchain, or from Nifty Gateway, or SuperRare, and that鈥檚 something that can be bought and sold and traded.鈥澛犅�
Mr. Schachter says a lot of digital art on the NFT market looks like a screensaver, video game stills, or something painted on the back of a van. But he says that the quality of digital art is only getting better.聽The vast majority of NFT art is trading for between $100 to $2,000, says the artist. Importantly, the NFTs offer an opportunity for digital artists to make money.
鈥淥ur work is real鈥�
Case in point: Longtime digital artist Auriea Harvey only started selling digital tokens for her work fairly recently. She first learned computer coding while studying traditional sculpture at the Parsons School of Design in New York City in the early 1990s. Nowadays, she creates sculptural forms on a computer, brings them into material existence with a 3D printer, and then overlays them with additional organic materials. She sells the original digital sculptures as NFTs. They鈥檙e a welcome innovation for digital artists who have often been expected to work for free, says Ms. Harvey. The tokens are a way for lovers of digital art to forge a connection with a wider community as well as the artist.
鈥淧eople who are going to be the collectors 鈥� the true collectors 鈥� of digital work are the ones who are really supporting the artists, their concepts, their ideas, and not really thinking about the art objects, but thinking about 鈥榳hat is this creator doing?鈥欌�� says Ms. Harvey, whose current solo show, 鈥淵ear Zero,鈥� at Bitforms gallery in New York, displays both her physical and digital work.
Like Mr. Wallerstein at the TRANSFER gallery, Ms. Harvey believes that NFTs have great potential for establishing custodial care of digital work. As part of the contract of ownership, digital creators can stipulate that owners are responsible for renewing the websites that the work resides on and that the work will be available online for perpetuity. Even so, Ms. Harvey describes ownership of art via NFTs as a mysterious belief system given that it鈥檚 impossible to truly own the original code for the work. Every time you load a browser page with a digital image on it, it鈥檚 making a copy of the JPEG, she observes.聽
鈥淚鈥檓 willing to suspend my disbelief enough to like to do that if it furthers the goal, or my goal, of seeing digital art as being seen seriously as a legitimate cultural form,鈥� says Ms. Harvey. 鈥淚n some ways, it took the money for the art world to listen to what digital artists were trying to say all along, which is that our work is real.鈥澛�
