Collectors, auction houses, and artists like Damien Hirst, Tom Sachs, and even Rembrandt are going digital as NFTs revolutionise the art scene
Missed the art fair? Fret not, you can now own your next art piece in just a few clicks and bids. Aside from blue-chip NFT PFPs (non-fungible token profile pictures), other forms of NFT digital art have also become a hot investment for auction houses, celebrities, collectors, and investors. It’s no surprise given Asia alone contributed to a third of the $22 billion trade in NFTs last year. Investing in art traditionally comes with a high price tag, but now with NFTs, art has become more accessible and affordable in its digital form.
Empowered by blockchain technology, NFTs have disrupted the traditional art market and revolutionised the art world. Arguably, anything can be art—and with NFTs, this can be an illustration, a photograph, a song, a video clip, a game, or even just text. These tokens are essentially blocks of digital data that exist on the blockchain, a distributed and decentralised network holding records of digital ledgers across its database shared amongst its network participants.
Typically stored on the Ethereum blockchain and (now more commonly) on Solana, the beauty of NFTs lies in its irreplicable nature and proof of ownership. Traditionally, art may come with physical certificates often signed by artists themselves as verification, but these can also be forged. Unfortunately, the art world is riddled with millions worth of fake art circulating in the network and even hanging in museums. Similar to the process of an expert authenticating and appraising the art, the network verifies the metadata of the transfer when an NFT is sold. These blocks of data come with a unique digital signature that is registered and traceable on the blockchain—all trade data and past transaction history are publicly viewable.
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The Rise of the Creator Economy
Web 3.0 has been regarded as the new creator economy as artists benefit from the decentralised market, where creators are connected directly to the buyer without a middleman. Typically, galleries earn a hefty commission for each sale and when resold on the secondary market, proceeds only go to the current owner but the original artist does not benefit from subsequent sales. Now, the democratisation of the art marketplace means buyers and sellers can trade directly with each other without multiple layers between them and are able to profit directly from its royalties, even when sold on the secondary market.
The NFT hype has also generated more interest and appreciation for the arts. Young tech-savvy clients with a new abundance of crypto wealth now step foot into virtual galleries and browse on marketplaces looking to invest in digital art. Artists are now not only able to monetise their digital creations, but they are also able to gain greater exposure with ensured copyright protection. Mike Winklemann—as one extraordinary example—was once a corporate graphic designer but is now known as Beeple, the digital artist behind “Everydays: The First 5000 days”, the most expensive NFT art sold for US$69.3 million at a Christie's auction.
It may take a stroke of luck to be an overnight selling sensation, but the valuation of an NFT is dependent on many factors such as the reputation of an artist, scarcity, quality, and market demand. While art is certainly subjective, the power of NFTs cannot be ignored as even museums are tokenising traditional paintings into digital artwork. Instead of just pixelated cartoons, digital art pieces are now regarded as an investable asset and traditional media artists have also turned to technology to paint their fortune.
