NFTs (Non-Fungible Tokens) have taken the art world by storm in the past year. However, for anyone who thought that they were simply a one-off response to the pandemic it’s time to think again. NFTs are already getting widespread usage throughout the art world and even making an impact in some of the most traditional parts of it. The reality is that anyone who hasn’t got to grips with them yet needs to catch up because NFTs are here to stay.
The basics of NFTs
The most basic description of an NFT is a digital certificate of ownership. The use of the word ‘fungible’ is important as non-fungible means that it is not identical. NFTs provide proof of authorship of a specific work by an artist. Within the NFT is an encryption of the artist’s signature and a smart contract that will include a 10% royalty payment to the original artist every time the piece is sold on. There is the potential to develop this so that percentages can also be given to charity etc as the tech evolves. The artwork and the NFT remain separate entities. When the artworks are traded, the NFTs are registered on a secure public ledger known as blockchain. The difference between being an owner and a viewer of digital artwork is that the owner has the NFT, which means the artwork can be sold, and the viewer isn’t able to do this.
Where have NFTs made an impact?
In March of this year, an unknown American graphic designer (Beeple) sold a digital artwork for just over $69 million and became the third most expensive living artist at auction. The work was sold via Christie’s one of the most traditional auction houses in the business and paid for by cryptocurrency. The artwork was sold with an NFT attached, which was thought to be an industry first. However, it wasn’t an industry last, as Damian Hirst dropped his Cherry Blossom prints on the same day that the first bid was made on the Beeple piece.
What are the benefits of NFTs?
They considerably expand the reach of the artworld and allow digital art to really start to take up space. As a result, NFTs make it possible to reach a whole new audience, something that Christie’s discovered during the Beeple auction when it attracted 22 million visitors during the final hours of the sale, 91% of whom were new to the auction house. Artists, too, have the potential to now reach many more people and to create new channels of income that are much faster and easier than traditional sales. There’s a big element of the democratisation of the art world thanks to NFTs and opening up what’s available to those who may not have invested in an area like this before - barriers are potentially removed and art made much more widely accessible.
NFTs have a lot to offer the art world and, given their increasing popularity, look like they are here to stay.