What are NFTs – and why is the whole art world talking about them?

NFTs, blockchain, ethers. C’est quoi? The future of the art market, if the visionaries have their way. The next hype that produces far too high prices for far too bad art, if the skeptics have their way

The topic has been going through the roofs in the art world for a few days because Christie’s for the first time auctioning a digital work of art that can also be paid for in ether, a crypto currency. And: The name of the artist, whose work “Everydays: The First 5,000 Days” will be auctioned from February 25th, has certainly not been heard by anyone in the art world.

The American Mike Winkelmann, alias Beeple, has been publishing a work every day for 13 years and has not missed a single day. He has 1.8 million followers on Instagram, he doesn’t have a gallery. Louis Vuitton printed his art on clothes and Justin Bieber showed it at concerts. He’s a graphic designer and dad. And somehow art was obviously something for him until now that he made because he decided to do it. On his website it says, “He’s doing a lot of artistic shit in a variety of media. Some of it is ok, but a lot of it kind of sucks. He’s working to make it less shit every day, so be patient with him .. . 🙂 “

Then, in December last year, he set an auction record on Nifty Gateway, a digital art marketplace, when 20 of his works sold for $ 3.5 million. Yes, and now you suddenly hear from experts that his collage consisting of his 5,000 Everydays at Christie’s will go away for at least 50 million dollars, and that is still underestimated.

Why the hype?

“‘Beeple Mania’: How Mike Winkelmann Makes Millions Selling Pixels” was the headline of “Esquire” a few days ago. In addition to Beeple Mania, there is now the cat madness. “Why an Animated Flying Cat With a Pop-Tart Body Sold for Almost $ 600,000 “, headlined the” New York Times “on Monday. Actually, everything is as usual on the art market. Art is sold at an insane price and the media are rolling. Only this time everything is not the same, because suddenly digital art for which there really wasn’t a market up to now. And it’s going away like hot cakes on the marketplaces that hardly anyone in the art world has ever noticed. The names are Nifty Gateway, SuperRare, Foundation, MakersPlace, Rarible, Zora, KnownOrigin, to name a few.

All of this creates an incredible need for discussion. Why the hype? Why does anyone even buy digital art? What do you do with it? What do NFTs have to do with all of this? And what are NFTs actually? The need for information and exchange is currently being lived out on Clubhouse, the audio-based social network. As I write this text, the app is discussing and explaining why NFTs are the future, as it has been for weeks 24/7. I sit in the room with the title “NFTs and the Future of the Art” and listen to it every now and then. There is constant talk of disruption and democratization, of open collections and crypto wallets, of ETH and Bitcoin, of Nifty and SuperRare, of drops and tokens.

Anyone who knows their way around will occasionally pick up a new thought or new information. If you don’t know what NFTs are, you quickly leave the room frustrated and irritated. Artists tell us that in five minutes they sold digital art for $ 1.4 million. Or for any other sum that cannot be explained if you are not familiar with the drop culture of the marketplaces.

What are NFTs?

NFTs are digital stuff that actually belongs to you. I actually picked up this simple explanation from WhaleShark on Clubhouse. WhaleShark, his real name only few people know, he always says, bought Bitcoin back in 2012, at some point he switched to Ether overnight and today has one of the largest collections with 220,000 NFTs. Now it’s getting complicated for a moment. NFT is the abbreviation for Non-Fungible Tokens, in German: non-exchangeable tokens. When you buy an NFT, you buy a token and an object that is linked to it. Digital art, trading cards, music and virtual land, for example. The NFT is stored on the blockchain, it is unique, authenticated and forgery-proof. In short: an NFT serves as proof of authenticity for every digital file.

Until now, digital art has not had the same value as painting or sculpture because it could be easily shared and copied. And as you can see from the example of Beeple, who publishes a work on Instagram every day, you can view the art anytime online and save it on your own computer. So finally artists can sell their memes and gifs, animations and renderings.

Ten years ago, Chris Torres put the Nyan Cat online and the video has 1.8 million views on YouTube. A few days ago he sold the running cat with the pastry as a body for almost $ 600,000 on Foundation.

The New York Times commentary on this and the NFT run: “Buyers generally do not acquire the copyrights, trademarks, or even sole ownership of what they buy. They buy the selling rights and the knowledge that theirs Copy that is ‘authentic’. ” So when someone buys a painting and then says, “Hello, this is mine, this is an original and not a copy!” – is it okay? But if someone does that with a meme that is an icon in the history of net art or internet culture, is that not possible and is simply showing off? Why this lack of understanding when it comes to digital art?

Meanwhile, a good and legitimate question is: What do you do with digital art? How do you show your collection? How could the buyer install the Beeple collage, a work consisting of 5,000 individual images, in their home? Beeple is open to discussions with the future owner, he said in the talk on Clubhouse that I co-hosted with journalist and curator Jesse Damian. He could imagine a print, an installation on the facade of a museum, a presentation on a screen and and and. This is also the most common solution. Collectors of digital art show the work on a screen.

Where to Buy Digital Art

The lack of understanding and irritation, the precise questions and the open answers are probably the best proof that something is in motion. Up until now, particularly high-priced art has been bought in a gallery, at a trade fair or in an auction house, ideally after seeing the work in its original form.

Just think of how eloquently online viewing rooms are being dismantled by galleries and trade fairs, as half-baked, as a step in the wrong direction, as an inferior replacement for trade fairs that cannot take place during the pandemic. And suddenly people buy art anonymously on marketplaces that have no relation to the art business, yes, which in most cases do not even have the right to serve the classic art audience.

On the contrary, even the largest and most popular marketplaces, those with the auction records that are now being read more and more, rely on the followers of digital artists and new media artists. For example, if you click through the drops on Nifty Gateway, it quickly becomes clear that the artists here are obviously selected based on the number of followers. You can also just look at the postings on Instagram from Nifty Gateway about the drops: @baeige 59k, @reisingerandres 98.7k, @justinmaller 137k, @blakekathyrin 79.9k, @ mad.dog.jones 254k, @superplatstic 1.2M , @chadknight 217k, @fvckrender 332k …