Every NFT (non-fungible token) that sells for an exorbitant price makes headlines on every corner of the finance world. The “who-buys-what-for-how-much” craze is certainly a thing, and investors, in particular, are looking at this new, cash-hogging manifestation of art with a blend of fascination and skepticism.
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But from an art business perspective, what’s in NFTs for digital artists to make the switch, and how does it compare with the realm of traditional art?
The Authenticity Mark
Digital art has been around since the second half of the XX century when the first computer-generated works were made by both artists and researchers in the science field –those by American professor Charles “Chuck” Csuri and artist John Lansdown.
For designer and cartoonist Javier Arrés, the emergence of NFTs has had an enormous impact on how authentic a work of digital art is.
“The work of those artists who were born in the digital world has been largely discredited … it has no value in the art market,” he says. “So, this type of technology just serves to value what we do.”
Arrés creates illustrations or animated 'gifs' that focus on details of crowded cities, sometimes illustrating urban stories in The New York Times. His pieces have been showcased in some of the world’s most scintillating venues, including the 2019 London Art Biennale where he won an award.
Still –like those of many other digital artists– even though he used to sell his items on orders, there was always the problem of authenticity and uniqueness to the acquired version.
NFTs, he says, have arrived to solve the issue and offer him a very interesting way to make a living from the art business.
Code is Value
The growing NFT market offers digital artists the chance to prove the authenticity of their works and their uniqueness, hence making the market grow. When artists upload, or rather, “coin” a piece of work, they create the NFT –to coin the new work is to create the blockchain code with which they can prove its authenticity.
“Once created, your work is an NFT with one or more copies,” Arrés says. “Each one of those copies is a token in itself, with its own value. Value is created by the market, whatever people freely want to pay for that NFT.”
In this sense, NFTs are no different from the traditional art market, except that artists need to create that code that makes their work unique and to have value.
Further, the blockchain allows artists to have total traceability of their work –as all sales are reflected and registered– giving them absolute control over their royalties.
“This is absolutely revolutionary for me, as I charge 10% on every sale on MakersPlace; this is an incredible advantage.”
With the blockchain model also comes fewer intermediaries and nearly almost absolute independence. One possible disadvantage –perhaps– could be a higher price for minting an NFT to the blockchain, which currently costs between $60 to $250 depending on the day.
“If this increases too much, it would make it very difficult for young or new artists to coin their work. I trust that 'Ethereum 2.0' would fix this problem,” Arrés says.
The Buyer’s Perspective
In the digital art business, NFTs also prove the authenticity of the work buyers are getting. Although they do not need to know all the technical ins and outs –coding, blockchain, minting, etc.– they are most interested in how authentic their new piece of work is.
“Normally, people wonder, why would you want to buy a piece of digital art if you can take it from the internet, download it, save it, and copy it? With the NFT code, you can show that what you have is a unique piece that nobody else has, with a certificate and traceability that are registered in the blockchain,” digital artist Andrés Reisinger explains.
For this, he gives an example. “I always say: ‘you go to the Louvre and take a photo of the Mona Lisa; in theory, you already have the painting, but no one would think that what you have is the painting, not even if you buy a poster or take its image from the internet.’”
In this case, the very authenticity issue of traditional art helps understand what NFTs are. A real piece of work can be copied and reproduced in the shape of e.g. posters, stamps, and other formats which are not the original.
A New Market
“This is the same reasoning taken to the digital world, and that is something that digital creators were sorely lacking,” Reisinger says.
So, NFTs have opened up a new market for every digital or traditional artist who digitizes their work, giving them the possibility of tracing the sales and living off it independently.
On the art collector’s side, both Arrés and Reisinger agree that NFTs have democratized art collections. With the arrival of NFTs, “We can all be collectors and get a work of an artist in his early days and make a great investment –something that used to be for just a privileged few. Now you do it with your mobile if you want.”
“And the third point that has generated interest is money, the amounts that NFTs move. This is actually how the traditional art market works too: people splashing big amounts of money always make headlines. This is nothing new, but with NFTs, it somehow is.”