17 Mar Which came first, the fungibility or the art. Can NFT’s revolutionize the playing field for Artists?
I must admit that my art knowledge is limited and yet at the same time, Art has permeated my life since childhood. Being the son of a Professor of Fine Art, the quasi stepson of a man that the Tate honoured with his own exhibition and the husband to a wife that ran the largest Contemporary Art gallery in the whole of the Middle East, well I have been learning about art through the process of osmosis for some time. Added to my passion for all things blockchain, the last year has been somewhat interesting to say the least.
So, when in March of 2021, when Christie’s made history auctioning off the world’s most expensive NFT by a digital artist known as Beeple for $69.4m, my ears picked up. Shortly after, not allowing the hogging of limelight, their arch-rival, Sotheby’s subsequently announced a collaboration with digital artist Pak. None-fungible tokens have literally exploded onto the scene in the last few months with fanfare and hype which creates excitement and scepticism in equal measures. But what is an NFT and can it really revolutionize and democratize the world of art.
Non-Fungible tokens are built of the back of the technology brought to the forefront with Bitcoin. The non-fungible element refers to the fact that they cannot easily be replicated like traditional fiat money for example. The token part refers to the technology they are built upon. Blockchain or Digital Ledger Technology uses cryptography to create an asset in that it cannot ever be replicated or copied. It would be a digital one of a kind. The files that are created are stored and recorded on an immutable ledger that can be traced, and its provenience verified for all of time.
Now we have established the technology and that there is also a market for these NFT’s, why is this technology useful for artists and how can it be implemented in a way to help drive impacting investing and how does this innovative technology help society. In simple terms, it has the potential to put the artist back in the driving seat and removes some of the hurdles to discovery and success.
Disruptive technology has always been at the forefront of everything we do since the invention of the wheel. Its permeation into the recording of asset transactions and sales feels somewhat natural. Whilst Covid has, as with many industries, seen a rapid increase in the use of digital mediums and platforms like Instagram, NFT’s are set to revolutionise the way pieces are bought, stored and transferred.
Becoming an artist and making it as a living, well is incredibly hard. Partly this is due to several factors. Firstly, the logistics and the fact that much artwork, is hard to carry, store and even show. Then you have the marketing of art. Often it requires a contract with a sole gallery in a sole geography with just a few marketing and PR touchpoints. It is thus incredibly difficult for new artists to establish themselves at a rapid pace. The music world has managed to move into a more fluid period, so it seems has the movie world. Now traditional ‘artists’ as we know them, the one with a canvas and a brush, have a way to connect with global buyers directly and in a new medium.
The somewhat expensive step of the formal requirement for a physical space to show art can now be replaced with a more efficient way of getting to market and a more efficient way of registering intellectual property and ownership.
Even though there is often not an accompanying piece of artwork to go alongside an NFT, people are able to print off the works, or indeed hang them on digital media. And there is no reason why the art cannot be constructed in the same way, posthumously that the owner wishes. The artwork is now his to size and structure as he sees accordingly.
The value lies not just in the physical asset but also in the legalised ownership. If we look at a house for example. The land could be deemed as the NFT and the house as the physical painting. If the house burns down, we still have the land to rebuild upon. If the artwork were to be lost, stolen or destroyed, we still have the digital form of ownership that holds value.
Digital art offers a new and exciting paradigm for the art world. Used independently or as an accompaniment to the physical art piece, NFT’s have a number of core benefits.
- The works cannot be replicated, provenance protected.
- There is an immutable ledger for all to see.
- There is less chance of physical damage.
- New markets can be entered rapidly.
There is less chance for artworks to be forged, replicated, copied and artists have a digital record, stored on an immutable ledger top verify that works belong to them. Not only does this reduce the presence of crime within the upper end of the market, but also cements authenticity at the opposite end.
NFT’s can also be used in other areas of the market. Smaller league sportsman can, for example, package and market some of their own goods to fans. It really does allow for the democratization of many sectors and fields. Additionally, it allows for a smaller player to build a market and provide proof of concept before going all out.
Whilst the global art market is said to be close to $65bn and encompasses over 40m transactions, this is relatively small when we compare it to even newer markets like the crypto market. If the sector can take advantage and harness new forms of technology, this can surely be a driving force to increases these numbers.
And markets are still very much focused around the core of North American and Europe. Digitalization will allow for this to be possibly extended into other Geographies such as the Far East, South America, Asia and Africa.
Now returning to my own dilemma. I found myself with a unique all be it positive situation to deal with and plan for my future. I will inherit literally hundred of works of art. Now if I had been my Grand great father, the Nawab of Sachin, well this will be no problem at all, because of I would have simply lined the walls of my palace with artworks. The more the merrier. However, I live a more nomadic lifestyle and have far more meagre accommodations. So, I find myself with the issue that at some point in time, I will need to manage, store and appreciate these art works. Not only will I be inheriting, but I will be responsible for continuing the legacy of my mother’s work.
How can NFT’s help me with this dilemma. Well firstly, I can digitalise the works, create a lasting intangible value for each piece and ensure their infinity. Secondly, I would be able to ensure their provenance. Lastly, whilst the physical art is a large part of the legacy, the enduring nature is the story these pieces tell. This, the beaty and the uniqueness of what has been recorded are what of real value for most collectors. For me, it is the memory of each piece being painted and seeing my mother, hair tied up, brush in hand excited and pensive to receive evaluation. Can NFT’s help me with my situation. Well, I believe they can and I believe they have a mainstream place in the immediate future.
Ultimately, whatever your view is on NFT’s and the recent hype around them, whilst this hype will likely die down, what will remain is a new and exciting route to market for many smaller and less established artists and they will provide huge benefits across the sector at every level as Art enters the digital era.
Feature image editorial credit: mundissima / Shutterstock.com