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NFT: Hopes and unknowns

Angel

Jun 11, 2021

For the digital art world, 2021 is the year of Non-fungible token (NFT). In March 2021, Beeple sold his NFT Everydays: The First 5000 Days (2021) for $69.3 million. It was the moment where a “New World” revealed itself to the digital art scene - a world full of hopes and unknowns.


What is an NFT? It is a Blockchain technology that allows people to upload a file (gif, jpg, mp4, mp3, etc.) to a blockchain, such as Ethereum, and make it a non-fungible token - an idea similar to cryptocurrency but each of the tokens is unique, i.e. non-fungible. In a very simplified explanation, an NFT is a digital file that certifies its authorship, ownership, and other metadata in a traceable and decentralised transaction record on a blockchain. Therefore, NFT is neither a genre nor a medium of art, but a digitally stamped copy of an artwork that can be sold or transferred as an asset on NFT marketplaces.

 

 

Banksy, Morons (White), 2007. Minted by Pest Supply in 2021. 
Courtesy of the artist, source: Rarible 

 


From art bloggers to mass media, people are figuring out what NFT can mean to us. In the same month, Beeple made his significant sales, Banky’s screenprint Morons (White) (2007) was brought, burnt, tokenized, and re-sold by a crypto artist group at $16.8 million. At the same time, UCCA Centre for Contemporary Art held the world’s first major NFT exhibition in Beijing, China. Major auction houses like Christie’s and Sotheby’s embraced the new trend with million-dollar sales, while some traditional gallerists remain sceptical. But what will blockchain technology change for people working in art? 


Apart from the skyrocketing prices, NFT is exciting because of its low entry threshold. As long as you have access to the internet, anyone can mint and sell their artworks on NFT marketplaces, such as OpenSea, SupeRares, Rarible, or hundreds of other options, with different rules and fees of each platform. In the ideal scenario, artists can sell their digital artworks in the form of NFT directly to crypto-collectors. However, the actual situation is more complicated than that.

 

One critical issue is the lack of reference for pricing. A tokenised artwork can be sold from one to ten million dollars as long as it finds a happy buyer. In Art Basel Hong Kong this year, South Korean artist Cody Choi made a satirical remark on NFT by pricing his NFT work Animal Totem–Stolen Data–Tiger #00 (1999, tokenised: 2021) for 70,000 ETH, approximately $190 million. He did this to comment on the “absurd price tag” attached to NFTs. Yet, the extreme price range also happens outside of the crypto world. The real question might be: shall we treat NFTs differently from artworks in real life?

 

 

Cody Choi, DATABASE PAINTING SERIES 1 - STOLEN DATA, TIGER #00, 1999. Minted by the artist in 2021. 
Courtesy of the artist, source: Opensea

 

 

Also in this year Art Basel Hong Kong, a local media art organisation Videotage has organised a screening and a panel discussion “Digital Birth: Zooming in on NFT” to further discuss NFT and its meaning to the digital art scene. In the discussion, art journalist and critic Reena Devi identified NFT as a “financial infrastructure” for digital art. It is a tool to help sell a valuable, but not the valuable itself. In other words, a tokenized artwork’s value does not lie in the crypto trend but the quality of being “non-fungible” - a unique certification that proves and records a digital artwork’s authorship and ownership.


Here raises another issue: when there are hundreds of NFT marketplaces flooded with hundred-thousands of NFTs, even though they are excellent, would soon disappear among sports cards, game characters, memes, or simply things that try their luck in the gold rush. In the traditional art market, galleries and curators tell us whom to look at, but how does it work in a decentralised world? 


It is where other art practitioners get involved. NFT enables digital artists to take more initiative in finding buyers, but it does not mean sweeping everyone in between away. Some NFT platforms such as SuperRare and Nifty Gateway are curated or by invitation only. While artists are more proactive, art organisers and galleries still play a crucial role to promote artists and artworks through events. Curators and critics can provide more layers of meanings to an artwork, which is essential for a piece to stand out in the sea of collectables. 


It is still too obscure to say whether NFT is a bubble waiting to burst. While there is a lot of uncertainty about NFT, the technology will stay. Perhaps, it is a good time to figure out how we want to deal with it.