NFTs Rock the Art World—What’s Next?
Mike Winkelmann, the artist known as Beeple, embraces the idea that Christie’s sale of his digital artwork Everydays: The First 5000 Days for $69.35 million this past March was a watershed moment in art history.
The extraordinary sum paid for a digital art collage assembled from 5,000 individual works created each day over 13 ½ years, and then minted as a unique token stored on blockchain, a digital ledger to record transactions, stunned the conventional art world, and sparked a scramble to find the next big Beeple.
The frenzy may have subsided, but Winkelmann believes “100%” that Everydays “will be viewed as a piece of art history” and “as the beginning of digital art being viewed as real art.” That shift can happen because Everydays was created as a nonfungible token. NFTs are unique digital works encrypted with an artist’s signature that prove authenticity and ownership. The act of proving ownership of art that previously seemed ephemeral could transform the landscape for artists who work in the realms of digital and media arts, film, and motion graphics.
“It’s groundbreaking for me as an artist,” says Ash Thorp, an influential artist who works in multiple mediums, including digital, motion graphics, and visual effects. “Rather than working for Apple, or Warner Brothers, or DreamWorks as a gun for hire, I can actually work for myself. Then I can do the art I want to do.”
Thorp sold Degradation, a moving image sneak peek into his next project, called Evident Mirror, as his first NFT in a curated sale this past spring at Christie’s, for $68,750 to Jehan Chu, founder of Kenetic Capital, a Hong Kong-based crypto investment firm. Evident Mirror is a “bit of a poem,” released in a series of 14 pieces, that is “my take on humanity reaching singularity and where we potentially are going,” Thorp says.
For Refik Anadol, a media artist and visiting researcher at the University of California at Los Angeles, who works with artificial intelligence and data to create what he calls data paintings—gorgeous, textured, swirls of color and moving images—NFTs are “naturally perfect.” Anadol’s works—displayed through stand-alone computer screens—have been purchased for collections and public art through studios and galleries since at least 2012, and have been exhibited around the world.
Yet NFTs offer “something so fresh,” Anadol says. For an artist who works with data and pixels, and artificial intelligence, the NFT technology was “conceptually connected in my mind—it was a perfect click.”
Anadol sold Machine Hallucinations: Renaissance/Sculpture, his first set of NFTs, for $30,000 last November. “It was sold in a second—it was amazing!” he says. This past May, Anadol fetched 1.5 million for his series Machine Hallucinations: Mars Landscapes, a set of 11 NFTs sold on the NFT platform Nifty Gateway, according to ArtTactic, London art analysis firm.
Winkelmann, Thorp, and Anadol, and other artists who have been largely unknown to the fine art world, but who have deep followings and are often integral to the corporate graphic-design universe, represent a new cadre of “outsider artists” who are disrupting business as usual, says Chu, also a longtime art advisor and collector. “Here you have people who have kicked down the door and said, ‘great, well, this is art too.’”
WILL TRADITIONAL FINE ART COLLECTORS COME ALONG?
NFTs arguably have existed since 2014, when Kevin McCoy and Anil Dash minted a pulsating, fluorescent-colored octagonal image called Quantum on blockchain with a timestamp of “05-03-2014 09:27:34,” according to Sotheby’s, which sold the work in June. The technology has loved beyond art to include unique games, music, iconic moments in sports, and tweets ( Jack Dorsey’s first tweet, “just setting up my twttr,” sold for $2.9 million as an NFT in March).
But in the art world, not everyone agrees the technology will elevate digital artists to fine art.
“Art gives you utility, and NFTs have been lacking in the utility delivered to the client—in the aesthetic value, the pleasure, the status,” says Evan Beard, national art services director at Bank of America Private Bank. “It’s very difficult when you own a piece of digital code to get that utility you are used to, that adrenaline rush.”
Another reason to value art is scarcity, Beard says. But “there are thousands of NFT artists creating all manner of things, and there’s almost no aesthetic standard.” In his view, auction houses are stepping in to play the role of curator and to send out value signals, but no one really knows what the value is. There will be some artists who influence the next generation—and those artists will be “canonized”—Beard says. But, he adds,“We believe 99.9% of NFTs being minted right now will go to zero. Few will have a lasting secondary market.”
Other players in the traditional art world believe NFTs have a future, and they are following the market acceptance closely.
Joe Charalambous, president of TPC Art Finance, a specialty art lender to middle-market collectors, has received several queries from clients who are trying to understand this new sector.
Charalambous expects those who buy works by contemporary artists such as KAWS or Banksy will buy NFTs. But, he notes, “we’re still seeing hesitancy from the current collector base.”
LiveArt, a peer-to-peer online marketplace for art launched earlier this year, is also offering primary-market NFTs, but with a focus on traditional artists and collectors.
“Simply, we go where the talent is and the majority of the talent is in the traditional space,” says Boris Pevzner, LiveArt’s CEO.
Sotheby’s “Natively Digital” online auction in June, which included McCoy’s Quantumand 27 other NFTs, was curated to represent a wide range of art-based NFTs—and to frame the market for best artists in the sector for the auction house’s collectors. The sale mostly drew new bidders and buyers to Sotheby’s by tapping into a community rich on cryptocurrency and comfortable with owning tokenized digital art.
Yet, 30% of buyers of the 100%-sold $17.1 million sale were known clients, says Michael Bouhanna, the Sotheby’s specialist who curated the sale. “They are very intrigued by this new technology and really want to start collecting.”
‘A MARKER IN THE SAND’
The headline from the June Sotheby’s auction was the $11.8 million sale of CryptoPunk #7523 to Israeli billionaire Shalom Meckenzie, the largest shareholder of the fantasy sports betting company DraftKings.
Nicknamed “Covid Alien” for its blue skin and medical mask, and sold by a game developer and NFT-advocate called Sillytuna, the punk is one of 10,000 pixelated characters randomly generated by an algorithm created by software developers John Watkinson and Matt Hall, founders of Larva Labs.
Originally distributed for free (minus a small transaction fee), the punks are legendary among NFTs and among their owners—members of a tight community who use the pixelated images as avatars. The punks trade on NFT platforms for thousands, or sometimes millions of dollars. Nine punks owned by Watkinson and Hall collectively sold for nearly $17 million at Christie’s in May.
Sillytuna sold the alien—and then turned around and bought Quantum for $1.5 million—to “lay a marker in the sand for NFTs,” he says.
“We need the likes of Sotheby’s and Christie’s, and myself, to educate another audience on what on earth these things are,” Sillytuna says. Sure, there’s an “element of faddishness,” but “there’s also a sustainable market here.”
BUT IS IT ART?
The question of whether any number of emerging art forms are “art” has been asked throughout art history. Think video art, graffiti, photography.
“I tend to say [NFTs are] the urinal of our time,” says Georg Bak, a curator and collector based in Zurich, referring to Marcel Duchamp’s Fountain, 1917, a porcelain urinal that the French artist declared as art, which among other works of his ushered in conceptual art.
Hans Ulrich Obrist, artistic director at the nonprofit Serpentine Galleries in London, references the work of Nam June Paik, the late Korean-American artist who is considered a founder of video art and is known for saying, “Technology has become the body’s new membrane of existence.”
Obrist views NFTs as more of a hybrid between the physical and the digital, pointing out that Anadol’s art often is displayed through computer hardware. “The screen or the computer is part of the work,” he says.
HAVING IT BOTH WAYS
The melding of physical and digital is already prominent in the NFT world. RTFKT is a company that was “born on the metaverse” in January 2020 that makes sneakers out of CryptoPunk art and other digital games and artifacts. Even punks’ creator Larva Labs made physical prints of 24 CryptoPunks, signed by Watkinson, in 2018 to accompany an NFT exhibition curated by Bak in Zurich that year. Sotheby’s sold five of these prints, along with the digital tokens, this past July.
Winkelmann has been selling physical screens that display his digital work alongside the NFTs since his second sale in December 2020. In July, he was working in a corner of a warehouse stacked with hundreds of boxes filled with physical LED screens of his “spring/summer 2021” collection, launched in May.
The collection achieved $14 million over a weekend, with 350 pieces sold for a single dollar through raffles and other games as part of an effort—similar to Sillytuna’s—to spread the word about NFTs. On the website pages for his collections, Winkelmann has a tagline that reads, “not stoping until i’m in the MOMA.... then not stopping until i’m kicked out of the MOMA, lol.”