ORLANDO, Fla. — For centuries, collectible art has come in the form of canvases and prints that can range from hundreds of dollars to hundreds of millions of dollars, pieces that might live in a museum or on the walls of someone’s home.
The most valuable of these — pieces by the likes of da Vinci, Paul Gauguin, Jackson Pollock, Rembrandt, Picasso and van Gogh — have fetched prices as high as $450 million.
But now the world of art collecting has a new disrupter that’s making waves in the digital world — NFTs. These “non-fungible tokens” exist on the blockchain alongside the cryptocurrency needed to purchase them (such as Ethereum), and provide a way to prove ownership of a digital asset such as an image or video.
“With original artwork, you have to have a physical document that says this is authentic. But it can be hard to verify it’s the right document for that specific artwork,” said Rey Ortega, founder and CEO of Grata Software. “With an NFT, you’re basically creating a certificate of authenticity that cannot be copied or distributed.”
Though NFTs have existed since 2014, they first began making headlines when Twitter CEO Jack Dorsey sold the first tweet he ever posted for $2.9 million in March of last year. Around the same time, digital artist Beeple sold an NFT of his work for $69 million.
Since then, the value and prevalence of NFTs has soared, with some of these digital assets selling for millions. Once a little-known commodity with a passionate following, NFTs have now emerged into the mainstream, cementing their place in the world of art as the next big thing.
A brief history
The first NFT was “minted” in 2014 by artist Kevin McCoy, representing the quiet dawn of a new digital era. The piece, titled “Quantum,” presents as an octagon-shaped animation that pulses and flashes in vibrant colors.
Skip ahead several years to 2017 when the project CryptoPunks launched with 10,000 unique, algorithmically generated 24x24 pixel avatars. Some don hats or smoke pipes, while others have glasses, earrings and mohawks. These were quickly claimed for free when first released, and now the most expensive punk sold for $23.7 million.
Mike Winklemann, better known as Beeple, has found his place in digital art history as he’s been selling NFTs for multiple millions of dollars each in the last year. At the same time, Bored Ape Yacht Club has emerged with its own collection of 10,000 unique ape characters, which now sell for hundreds of thousands of dollars each.
Meanwhile, mainstream auction houses such as Christie’s and Sotheby’s have taken to the trend, both offering multiple auctions of NFTs in the past year.
Breaking into the mainstream
The slow swell of NFTs suddenly erupted in 2021 as aspiring collectors rushed to buy with the hopes of cashing in on the latest digital craze.
By the end of last year, the marketplace for NFTs reached a $41 billion value, according to Business Insider, nearly catching up to sales in the conventional art market. In addition, the number of unique wallets that bought or sold an NFT asset surged more than tenfold by the end of 2021 compared with a year prior, according to Statista.
“2021 was the year where everything just kind of exploded. To be within that explosion — I’ve never felt anything like the space, the community and the people involved,” said Rebecca Rose, a Central Florida artist who creates “sculpturings” and NFT holograms. “Artists will mint their own work, collect each other’s work and collaborate together.”
Rose recently helped curate an NFT-based exhibition at CityArts Orlando titled “Paint to Pixels,” which featured the work of 14 artists shown on TV screens. But Rose points out that there are other ways to display and view NFTs, especially within the expanding online “metaverse.”
“The opportunities are limitless here. It’s not just talking about the NFT, like the image itself. It’s talking about compatibility in the metaverse, like going into Decentraland and viewing NFT’s with your Oculus,” Rose said, referring to a 3D virtual world viewed in a virtual reality headset. “There are projections and NFT holograms; there are giant stereoscopic, 17-foot-by-60-foot curved LED screens where you put on 3D glasses and view an NFT.”
Snap! Orlando’s founder and director, Patrick Kahn, said he’s considering an NFT exhibition but wants to learn more before jumping in feet first. However, he’s taking note as larger companies make their way into the NFT space.
“The fact that the bigger players are invested in it, Facebook and Google … they are visionaries. They understand the workings of things spreading into mass consumption,” Kahn said.
Last fall, Disney teamed up with digital marketplace VeVe to offer a series of “Golden Moments” NFTs for $60 each. The entertainment giant continues to release more digital collectibles in limited-edition series and recently posted a job listing in search of an NFT expert.
Pros and cons
In a world that’s becoming increasingly digitized with an ever-expanding virtual landscape, it only makes sense that art is a part of that growth.
Professional artists are increasingly finding their way into the digital space, supplementing their traditional work with NFTs. Orlando photographer David Lawrence created a series, inspired by CryptoPunks, with 1,000 punk portraits.
“I made more income from [selling NFTs] than any one project, I think, in the last 10 years of doing photography,” he said. “There’s no way, that I’m aware of, that I could have done that on my own from just selling artwork.”
One of the biggest benefits of NFTs is the instant proof of ownership these tokens carry. Lawrence learned, in a roundabout way, how valuable this can be.
“I had some pieces from a pretty high-end collection, and I didn’t realize that I had been hacked,” he said. “A bunch of people started calling me out on Twitter saying I didn’t actually own them. … They checked my wallet before I did and saw that I no longer had them. People can see if you’re bluffing on something.”
As someone who craves face-to-face interaction, Lawrence worries about the implications our digital future may have when humans spend their hours in virtual worlds.
“I think the drawback is that more people will potentially spend more time on their phone and in the metaverse as opposed to creating out in the real world, and actually having real physical connections with people,” he said.
In addition, some share a concern about the energy usage of servers that support Ethereum and other blockchain technologies. One Ethereum transaction uses more energy than several thousand Visa card purchases, according to Statista.
“I got a good lesson from my daughter regarding NFTs and she’s totally against it for environmental reasons … she thinks that this is a waste and very bad for the environment,” Kahn said. “But you cannot be left behind, you need to be part of the trip and understand what’s going on with it.”
Here to stay?
At the end of the day, it’s worth asking: Why do NFTs have value? It’s perhaps the same logic behind why any art has worth — because we agree, collectively, on some level, that it is valuable.
If enough people believe in the power and worth of NFT assets, and the trend lasts, there could be a viable market for trading digital art for years to come.
“I do believe it’s here to stay. The reason why I believe it’s going to stay is a lot of our younger generations are already buying digital assets and they’re digital natives,” Rose said, referring to the generation brought up in a digital world. “There are young artists that are creating NFT collections and making millions off them.”
Even for relative newcomers in the NFT space, such as Lawrence, there seems to be a staying power and a benefit to selling unique art online.
“I think, in the long run, a lot of people’s careers as artists are going to be made by existing in the digital realm,” he said. “There’s a much greater reach than you can do in a single art show.”
Kahn, who is approaching NFTs with caution, still believes they could have wide-ranging implications for the future of art.
“There are big collectors and investors who buy the NFTs for astronomical amounts of money,” he said. “The fact that they do this, and they are savvy collectors, is an indication that this is something to be considered.”
Perhaps what motivates part of the NFT trend is the fear of being left behind when the next big movement is upon us.
“My thing is I don’t want to be left behind in the dust. … I went through this back in 2000, the birth of the internet. There were a lot of skeptical people and they did not see the application of it,” Kahn said. “It might still seem like kind of a gimmick, until all of the sudden, it becomes a real viable tool. I think that our brain needs to unlock some understanding of that next iteration.”
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