Non-Fungible Tokens: The Next Frontier

By Samantha Bader

The newest form of art is here – and it’s one that Pablo Picasso could’ve never imagined. The emergence of nonfungible tokens (NFTs) has been skyrocketing in the past year, and 2021 is starting to look as though it will be the biggest year for NFTs yet. Now, instead of the ultra-wealthy fighting to get their hands on a rare work by DaVinci or Jackson Pollock, they’re fighting over the right to buy someone’s tweet. 

NFTs are essentially digital works of art. The artist’s signature is encrypted on the piece through blockchain, which is the same leger used to ensure the authenticity of digital currencies such as Bitcoin. The unique signature is what enables buyers and sellers to guarantee that the work is authentic, and it also means that for the first time ever, one individual can completely own the rights to a work of virtual art. One of the biggest issues artists faced in the past when attempting to sell their virtual art is that it can be copied and spread online easily, but NFTs have now solved this problem by encrypting the original to be sold. 

This all sounds a bit insane, but there is a huge and rapidly growing market for these pieces of digital art. The famed auction house Christie’s sold a piece entitled “Everydays: The First 5000 Days” for $69 million USD in March, proving once and for all that people are willing to pay big bucks for these NFTs. This piece was a digital collage done by Mike Winkelmann, better known online as ‘Beeple’. The buyer, a cryptocurrency investor who operates under the identity “Metakovan” does not receive a physical copy of anything for their purchase. Rather, Beeple will deliver the encrypted NFT directly to them. 

Noah Davis, who is a specialist in post-war and contemporary art for Christie’s said, “The first 10 minutes of this sale we had more than 100 bids placed. We went from an opening bid of $100 to more than $1 million. We had bidders from seven different countries.” 

Before the auction took place, Beeple said, “It’s a bit surreal, because [digital imagery] wasn’t really something that I pictured, in my lifetime, being able to sell, so it [has] come out of nowhere. But at the same time, I also really feel like this is going to be the next chapter of art history.”

Beeple is certainly already reaping the rewards of this massive sale, as he is now the third most expensive living artist in the world. NFTs also guarantee artists future streams of revenue, as the artist receives a cut of the profit each time the NFT is resold, normally capped at 10%.

Digital collages aren’t the only NFTs that are being sold. CEO of Twitter, Jack Dorsey, is selling the rights to his first-ever tweet. The bidding for that is at $2.5 million and rising, whereas musician and artist Grimes has already made $6 million from selling their digital art. In theory, anything with a digital signature, from GIFs to tweets can be encrypted on blockchain and sold as an NFT. 

It appears that art is the latest thing to go online. As the pandemic has exacerbated, auction houses all around the world have been more heavily investing in online options, and the market has surged to meet them. Now, it is doubtful that when DaVinci painted the Mona Lisa, he could have ever thought that one day, encrypted tweets and pictures would be in as demand as fine art. However, this is just another example of how art develops and changes over time, and it will be fascinating to watch how this market grows. 

Photo by Kadir Celep on Unsplash

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