What are NFTs and how are they changing the art world?
One of the biggest buzzwords in the art world, NFTs have been touted as a new dimension for creative expression and digital ownership, allowing artists and brands to share their work like never before. With Christie's and Sotheby's embracing the crypto art phenomenon, and record-breaking sales of up to $91.8 million, we explore the latest movement to spearhead the future of contemporary art.
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'Everydays: The First 5000 Days' by American NFT artist Beeple (Mike Winkelmann), which sold at Christie's for $69.3 million in 2021. Image credit: Ascannio.
What is an NFT?
An NFT (non-fungible token) is a unique digital asset – like a JPEG image file, MP3 audio file or MP4 video file – that is stored on a digital ledger called a blockchain. These files are tokenised, whereby data is transformed into a random string of code. The records (blocks) contain a timestamp and details of the previous block, forming a chain of data that cannot be modified without altering all subsequent blocks. This means they are not interchangeable (fungible), and the token therefore represents ownership of the asset.
Pretty much anything digital can be an NFT. In February 2021, the American comic illustrator and pixel artist Chris Torres sold 'Nyan Cat', a viral meme of a Pop Tart-bodied cat zooming through space, for around $580,000. The next month, Twitter CEO and co-founder Jack Dorsey sold his first tweet – ‘just setting up my twttr’ – for over $2.9 million. Other NFTs have included the original lines of source code for the World Wide Web, a burnt Banksy print, and the globally-shared 'Charlie Bit My Finger' YouTube video.
NFTs are bought and sold on NFT marketplaces like Open Sea, Rarible and Nifty Gateway, which function as digital auction houses where buyers can bid or select a 'buy now' option, and pay via cryptocurrency (a secure virtual currency). Most NFTs are part of the Ethereum blockchain, which uses the Ether (ETH) cryptocurrency, similar to Bitcoin and Dogecoin. Turning a digital file into a crypto-collectible by adding it to a blockchain is a process known as minting.
Bored Ape Yacht Club, the world's biggest NFT project, is a collection of 10,000 unique Bored Ape NFTs. Image credit: Ascannio.
Impact on the art market
The origins of the crypto art market date back to 2014, when the New York-based digital artist Kevin McCoy minted his 'Quantum' artwork – a pulsating fluorescent octagon – to create the first-ever NFT alongside tech entrepreneur Anil Dash. The art world took notice, and since then, digital artists including Beeple, Pak, Hackatao and Fewocious have made their name in this fast-moving sector. During the first six months of 2021, sales of NFTs rose by more than $2.5 billion, while Pak's NFT artwork, 'Merge' sold for a record-breaking $91.8 million in December that year.
The COVID-19 pandemic has been a catalyst for NFTs, with art galleries and museums turning to augmented and virtual reality to adapt to a new, digital-first climate. In June 2021, Sotheby’s, one of the world’s most prestigious fine art auction houses, opened its flagship metaverse gallery – a digital replica of its headquarters on London’s New Bond Street – in the Voltaire Art District in Decentraland, a virtual reality platform that is powered by the Ethereum blockchain. Its co-head of digital art sales, Michael Bouhanna, described the platform as ‘the next frontier of digital art’.
Accessible to anyone with an internet connection, NFTs are breaking down artistic barriers. Teenagers are becoming blue-chip artists (those whose art's worth is expected to increase regardless of the economy), while the BrasilNFT Artes Originárias gallery was launched as the first NFT platform aimed at indigenous artists, drawing much-needed attention to marginalised communities. Lively debate on social media platforms such as Twitter through hashtags like #NFTart and #Cryptoart is sparking further innovation.
Decentraland is a 3D virtual reality platform where investors can build virtual structures including art galleries and charge other players to visit them. Image credit: Velirina.
NFTs versus 'real art'
While the complexity and kitsch style of NFTs is part of their appeal, it can make them more open to judgement, with one critic describing the phenomenon as 'digital garbage' and 'the Emperor's virtual clothes'. The perceived dumbing down of art may be touted by traditionalists, but as The Art Newspaper stated in July 2021: ‘NFTs do not spell the end of IRL [in real life] art, they are simply a new chapter.'
Many NFTs incorporate elements from classical art movements, including the focus on technology seen in 20th-century Futurism in Italy, and the repeated imagery of Pop Art in New York in the1960s. Artists have created NFTs inspired by Banksy, Leonardo da Vinci and Picasso, while Will Gompertz, director of Tate Gallery, likens Beeple's work to the fantastical paintings of Hieronymus Bosch in the 15th century. Noted works are also being transformed into NFTs; in May 2021, Christie's launched Andy Warhol: Machine Made, a collection of five NFTs of digital works created in the 1980s.
NFTs are central to the crypto art movement, which is being propelled by projects such as Larva Labs and the Bored Ape Yacht Club. Artists are discovering new forms of art, including digital sculptures, animations, optical illusions, visual translations of data structures and autoglyphs. The latter, which refers to imagery on the Ethereum blockchain that is generated by an algorithm, have been described as 'tantalisingly beautiful' by Sotheby's, who praised the 'blockchain-based artistic purity' that is 'generative minimalism for the NFT age.'
Art industry leaders have embraced the 'crypto craze', with Sotheby's and Christie's auctioning NFTs and accepting cryptocurrencies as payment. Image credit: AnnaStills.
Investing in NFTs
Google searches for NFTs hit a new record in 2021, with art collectors excited by the potential return on investment. Celebrities jumping on the crypto craze include the musicians Jay-Z, Elton John, Eminem and Snoop Dogg; fashion designer Paul Smith; Hollywood actor William Shatner; Tesla Motors CEO Elon Musk; and the British artist Damien Hirst.
Major brands such as Gucci, Visa, Nike and Coca-Cola are also investing in NFTs. The luxury fashion house Louis Vuitton has created an entire video game, Louis: The Game, in which players complete challenges to find NFTs, while Adidas has partnered with the NFT project Bored Ape Yacht Club. In a December 2021 tweet that has now been liked more than 18K times, Adidas stated: ‘It’s time to enter a world of limitless possibilities.’
Cryptocurrencies such as Bitcoin and Ether are believed by some investors to be the 'currency of the future' as digital payments become the norm. Image credit: Sodel Vladyslav.
NFTs and the environment
Digital artists are thinking up new ways to offset the increased greenhouse gases generated by the computing power needed to create NFTs and fuel blockchain technology. Beeple envisions a sustainable future for NFTs, and is investing in renewable energy and conservation projects to make his artworks carbon neutral, or even negative. The Italian crypto art duo Hackatao use their work to express concerns about the environment, including their highest-selling artwork, 'Flood', which features a female figure submerged in water as a call to action to combat climate change.
Innovative solutions include the HOFA Gallery in London setting up its own NFT platform, HOFA.io, which is built on the Ethereum network and ‘founded with sustainable ethics’. This hybrid version accepts payments from a crypto wallet or card, reducing its carbon footprint. A provocative statement on climate change, Two Degrees – a scan of a forest in southern Germany – is an NFT designed to burn itself if global warming reaches 2ºC above average. Treedefi, an 'NFTree' marketplace, will plant a real-life tree for each digital tree bought to increase carbon dioxide absorption.
What's next for the metaverse?
NFTs are just one part of the rapidly expanding metaverse, a hyper-real alternative world that combines virtual and physical reality. Tech giants like Microsoft and Facebook are already on board, with the social platform rebranding itself as Meta in October 2021. Art will be at the forefront of this seismic change, as indicated by Meta's first promotional video, which reimagines the French painter Henri Rosseau's 1908 artwork, 'Fight Between a Tiger and a Buffalo'.
New technology will transform the way we enjoy culture and experience everyday services. Alice, an intelligent NFT (iNFT), exists on the Ethereum blockchain and has the ability to self-learn and converse with her collectors. The Austrian postal service, Österreichische Post AG, has already adopted blockchain postal stamps, and the Berlin-based Look Labs has created a digital fragrance using the molecular wavelengths of a real perfume. Even food recipes, stand-up comedy sets and television streaming will be influenced by NFTs in the months to come. We can't wait to see what's next!
This article is for informational purposes only. Castle Fine Art is not promoting or endorsing NFTs through its publication. Let us know your thoughts on social media at @castlegalleries.
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