On March 11th, the sale of Mike Winkelmann’s (also known as Beeple) “The First 500 Days'' for $69 million dollars marked a historic turning point in the art world. The piece was sold by Christie’s, a reputable and well-known auction house, as the first sale of an electronic graphic artwork the house had ever made - in this case, as a jpeg file. However, this jpeg file isn't an image that a user could simply take a screenshot of and own a copy of: it has a non-fungible token (NFT) attached to it to verify its authenticity.
What Are NFTs?
Non-fungible tokens can provide authenticity to original digital artwork. Since most digital media (images, audio, videos, etc. ) is easily replicated, it is difficult to assign originality and ownership—and therefore value—to ordinary digital work. However, if an NFT is attached to a digital work , the authenticity of the file will be guaranteed, since no other file can have that particular NFT attached to it - even replicas made by copying the original file. Thus, by securing the uniqueness of digital files, NFTs allow the artist to establish ownership over an original digital work, just like one would physically own an authentic painting.
Unlike most physical artwork, which is generally bought and sold using cash or other traditional payment methods, NFTs have to be bought and sold using cryptocurrency. NFTs are minted and transferred through the blockchain which is an encrypted and decentralized way to store transactions and information. Simply put, information is time stamped, split up, and stored between everyone using the blockchain, making this system virtually unhackable. Whenever a transaction is made (cryptocurrency transfer), a unique code is created which stores the transaction and allows it to be verified. NFTs going through the blockchain system provide proof of ownership, the same way cryptocurrency transactions are recorded and conducted. This ensures that all transactions are secured and recorded, allowing anyone to trace their steps to the original owner using the blockchain (just like in physical artwork handoff records).
As cryptocurrency gains increasing importance in the digital world, people are becoming more familiar with blockchains and the process of purchasing digital currency. Since NFTs work on the same level as crypto, users may be more inclined to work with NFTs since they are already familiar with the concept. Also, since NFTs are often auctioned through public websites (some famous places being OpenSea, Decentraland, and Nifty Gateway), anyone who has access to cryptocurrency can also purchase artwork.
Some notable NFT artwork that has been sold so far include hary by Steve Aoki and Antoni Tudisco for $888,888.88, Crossroads and The Complete MF Collection by Beeple for $6.6 million and $777,777.77, respectively, and Forever Rose by Kevin Abosch for $1 million.
The Shady Side of Selling Artwork
Collecting reputable artwork is not very straightforward in the art community. Art dealers such as Christie’s and Gigosan are not obligated to sell any of the artwork on their walls, even if there is a price tag attached to them. The business of galleries revolves around connections and established relationships with collectors, meaning that selling artwork to any person with the cash available is very uncommon - if not downright impossible. These obstacles make collecting art a very difficult industry to enter. In the end, there only remains a pool of about four dozen collectors who control most of the market.
Along with the monopoly of the high art market, the commercial art world also has its fair share of defects. In the past, digital artwork primarily used aids such as watermarks to “regulate” authenticity, but these anti-plagiarism measures often did not provide sufficient protection against e-theft. Once an artist lifts their watermark and sells their artwork, the buyer has complete control over the artwork since they own a copy. These files can easily be copy-pasted, which can result in the illegal distribution of paid artwork, often hurting the artist in the process.
Implications of NFTs
Before NFTs, electronic artwork was generally bound to graphic design for commercial and commission artwork. However, the authenticity and ownership that NFTs provide to digital files now allow artists to create and sell digital artwork in a much more secure manner. With the increasing accessibility of computers and the internet, anyone can create digital artwork with almost no restrictions (excluding software prices). With the unlimited number of NFTs that can be minted, anyone can attach one of these tokens to their artwork and sell it in a legitimate way. Thus, even creators who may be on a tight budget can create unique electronic artwork and sell it, allowing the art community to further expand its reach. In addition, anyone with money to pay for certain artwork is eligible to purchase them, no longer being bound by the skewed rules set by the high art community.
Since digital artwork is easily accessible due to minimal material prices, digital artwork can provide art accessibility to low-income communities or schools which may be on a tight budget. With the rise of NFTs and increasing support for the idea of digital art being “original” and “real” artwork, schools should integrate digital art into their curriculum. Integrating digital art into school curriculum would not only increase accessibility to art but also help reinforce the idea that digital art is “original art.” With NFTs, the world of digital art has money to back “original” pieces, and introducing students to this field can be seen as a possible career opportunity.
Finally, NFTs allow companies to copy sensitive documents, such as blueprints, without fear of theft. If NFTs were minted for the protection of electronic documents, including paperwork, virtual models, and company sensitive documents, businesses could make copies without fear of competitors stealing their ideas and information. If a rival company were to steal a document, NFTs would allow businesses to defend themselves for exclusive ownership over their ideas and documents in court. This protection can increase productivity of employees as well as protect company ideas.
With the introduction of NFTs, the world of electronic art has suddenly transformed into one where both authenticity and accessibility are available to everyone.
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