All of a sudden, a new technology seems to be turning the art and culture market inside out. So-called non-fungible tokens – or: NFTs – are intended to make digital works of art unique. And achieve prices in the millions. Apparently, they are also an opportunity for small artists to be able to make a living from their art. But where do these NFTs come from, where can you buy them and why are they criticized?
It is a moment that the art trade has never seen before. On March 11, 2021, Everydays: The First 5000 Days by Mike Winkelmann alias Beeple was auctioned at Christie’s auction house. The auction lasted two weeks, but in the first few hours the bids climbed to hundreds of thousands and then several million euros. Shortly before the auction closed, they shot up again – before the knockdown fell at 58.86 million euros. Mike Winkelmann immediately stormed into the top 3 of the most expensive artists still alive, as Christie’s writes. The American therefore ranks in the same sphere as Jeff Koons, David Hockney and Gerhard Richter. Only: Everydays: The First 5000 Days is not an abstract sculpture, portrait or landscape painting that you can simply hang on the wall. It is a completely digital work, the first ever to be auctioned at Christie’s and paid for with the cryptocurrency Ether.
Everydays: The First 5000 Days consists of numerous individual pictures – of Joe Biden as a spider monster, a soldier in futuristic combat suit or Tom Hanks who defeated the corona virus with a punch. The graphic designer from Charleston, USA didn’t just create these so-called Everydays, but has published them freely on Twitter, Tumblr and Instagram since 2007. From there they found their way to several other platforms, where they were further shared. What the buyer bought was therefore not actually a collection of digital works of art, not even the copyright and trademark rights to the work. It is true that he received a high-resolution collage of all the images. But primarily the bidder bought a so-called non-fungible token – or NFT for short – on the blockchain.
The token from Everydays: The First 5000 Days represents the collection of digital works of art on the blockchain of the cryptocurrency Ether. And even if the digital works of art can be copied and shared without problems, the NFTs are completely unique and verifiable and always linked to only one wallet address on the blockchain. Much like banknotes or coins, which can only ever be in one wallet. As a result, they are not only a metadata representation of the works of art, but also a kind of “You are the one who can say that this work of art is yours” agreement between the artist, the person who buys it and everyone who does the NFT then acquires. This is more of a handshake agreement that has little or nothing to do with ownership or ownership of national legislation.
An NFT is the cryptographically documented and signed right to be able to indicate that you are the owner of an animation, text or photo that millions of people may have on their computers or smartphones. This is an extremely esoteric concept that makes sense in a digital world in which everything can and must be copied and replicated due to technical conditions, to enable a shortage of goods, which in turn enables added value. In the spirit of art historian and philosopher Walter Benjamin, who complained that technical reproducibility means that the special, the “aura” and the uniqueness of art are lost.
Where do NFTs come from?
NFTs have their origins in a project called Etheria, which was presented at the DEVCON1 crypto conference in 2015, even if the concept can be traced back to the 1970s. The developer Cyrus Adkisson had created a virtual landscape whose parcels are not exchangeable, but can be transferred once and only from the owner to a new owner. This was implemented with a smart contract. This idea was later taken up by a project called CryptoPunks. The start-up Larva Labs, founded by two artists, offered 10,000 unique pixel faces modeled on old-school adventures such as Maniac Mansion, which had been created by an algorithm. Every single one of them was stored in the form of a hash value on the Ethereum blockchain and issued by Larva Labs – some of them free of charge. Their virtual uniqueness made the pixel faces collector’s items. As a result, they were soon trading for tens of thousands of euros.
We were as surprised as everyone else.
A little later, the collecting game CryptoKitties, developed by the Canadian company Axiom Zen, followed. Virtual cats are collected and paired with each other in order to have kittens. Like the CryptoPunks, each of the cats is very unique. They were quickly traded for downright absurd sums of money. At times, CryptoKitties was the most active application on the Ethereum blockchain. “We were as surprised as everyone else,” said CryptoKitties developer Mack Flavelle in a Forbes article. The mechanics inspired the architects of the blockchain to develop a standard, the ERC-721 protocol, which implemented the same mechanics into the basic structure of Ethereum at the end of January 2018 – in the form of non-fungible tokens. Therefore, NFTs are currently primarily tradable with the Ethereum blockchain. But the developers of other blockchains such as NEO, TRON, Phantasma, WAX and Microsoft are working on or are already using their own non-fungible token mechanisms.
HOW THE ART SHOW?
Many NFTs are animations or JPG images that only exist digitally. However, they can also be exhibited and presented in your own four walls. That works with digital picture frames. The Meural range from Netgear is recommended among NFT collectors. Some hobbyists and NFT stores are already working on their own solutions such as TokenCast and the Nifty Gateway Display in order to be able to stage not only the works of art, but also the digital deed of ownership.
A real market has developed for NFTs in the past two years. According to Nonfungible.com, NFTs are said to have generated more than 250 million US dollars in 2020 – four times as much as in the previous year. 2021 will easily top this value: In February alone, 86 million US dollars were sold. The corona crisis could also be partly responsible for this. Countless people are stuck at home. And among them are also many creative people who are looking for opportunities to earn money with their works now apart from exhibitions, concerts and auctions – or, like some, to be able to offer their work across cultural or national borders for the first time. Still others looked for investment opportunities. Or just after a distraction.
Gifs and video animations, photos, graphics, texts as well as virtual stretches of land in digital worlds such as Decentraland are offered for sale on a wide variety of platforms. Partly at fixed prices, partly for bids, partly also in exchange. Some of the platforms like Foundation and SuperRare see themselves as digital counterparts to traditional galleries and auction houses. They curate and only allow artists to exhibit their works upon invitation. On other platforms such as OpenSea, Rarible or TreasureLand, everyone (or almost everyone) is allowed to offer NFTs in a mostly uncontrolled manner. As a result, they are more like junk and street markets. Accordingly, the NFTs can be wild and curious: Individual pixels are sold, private photos and works of art by long-dead artists such as Da Vinci.
NFTs as an opportunity for small artists
In fact, some independent and previously unknown artists suddenly experience unimagined attention through auctioning and selling NFTs – and the feeling of being able to live with and from their art. Among them is the Belgian 3D artist Stijn Orlans, who auctioned the render image of a 3D landscape called Solitude for 2,854 euros on Foundation and other works for similarly high and higher amounts on SuperRare. “That totally blew me away because I’ve never earned anything like this with normal work for customers,” he says. As he points out to 1E9, he was initially very skeptical about NFTs. He heard about it for the first time in October 2020 and asked friends “whether this is really a trustworthy thing”.
I’ve seen some people sell so much that they probably never have to work even one day in their life.
Since he had accumulated “a whole pile of works” over the years that “only collected dust on my hard drive”, he gave the NFTs a chance. “It couldn’t hurt to try it out,” he says. Since he was able to sell his first picture, he has definitely had a small fan base that actively bids on his pictures, makes explicit offers, and shares and advertises his pictures. Therefore, in the future, he also wants to put other works for sale as NFTs.
Stijn Orlans is uncertain whether he can live from it in the long term. “But for some people it is definitely possible,” he says. “I’ve seen some people who have sold so much that they probably never have to work even one day in their life.” In addition, royalties can be written into NFTs. That means: For every resale, the artist – or whoever controls his digital wallet – receives between 2.5 and 10 percent of the resale price. For him as a simple graphic artist, says Orlans, the NFT market definitely makes life easier. For now, at least.
In the months before the hype, Orlans considered giving up his art to work as an engineer. “Now this new NFT trend could give me the opportunity to work full-time as a freelance artist without having to do a regular job on the side,” says the Belgian. He enjoys the creative freedom that this digital art trade gives him and works on works that really mean something to him instead of chasing after agency contracts. Among other things, he is currently working on a five-part series of small animations that he is creating especially for the NFT market.
Steve Ibson, who works as a painter and graphic designer – and is actually famous, had a slightly different intention. Almost 17 years ago he put a video on the Internet that is now an integral part of Internet culture: The Kitty Cat Dance. The dancing cat, which he originally uploaded to his own website, can be found on t-shirts, in videos and even in advertisements. But without Steve Ibson ever getting paid for it. “My impulse was to do [The Kitty Cat Dance] before any other bastard does,” he tells 1E9. It is a way to write on the blockchain that he is the creator of the meme and to get at least a small share of the financial success of his work after years. Much like Christopher Torres did with the gif animation Nyan Cat, which sold for almost 500,000 euros in February.
“In addition, I figured that if I made even a thousand I could buy a new camera,” Ibson says. Ultimately, the dancing cat went to an anonymous buyer for 2 ETH – i.e. for 2,925 euros. “According to my calculations, that’s about two and a half cameras, so that’s okay with me,” continues Ibson, who is already planning to sell more works of art as NFTs. Because he also sees it as a new opportunity for artists to address an audience directly.
But it’s not just photographers, 3D and animation artists or painters from large industrialized countries who suddenly have an unexpected source of income with NFTs. But also artists from African, South American and Eastern European countries, who can now reach buyers and art lovers from all over the world without galleries and exhibitions. Among them is Itzel Yard from Panama, for example, who sold their graphic animation Sewing and Alterations for around 970 euros. Overall, however, all of these artists are more of an exception.