Crypto and NFTs: The New Age of Art
Fiat currencies and art have both been around for a long time. We are equally used to centralised finance, as we are to seeing works of art in all shapes and forms, including, as of lately, digital art. NFTs, or non-fungible tokens, and cryptocurrencies, whose market is the most volatile of all, have already made their name as the next generation of platform-providers in the art and (de)finance industries. But when put together, we see how crypto and NFT art can be an even more promising pair for the future of art as a whole.
NFT art – the evolution of digital art
The first personal computer was introduced to the general public in 1958, although at the hardly negotiable “bargain” price of almost 50,000 USD. Two years later, John Whitney became the first to create computer-generated art – a feat which later earned him the title of one of the “fathers of computer graphics”. Another two decades later, the AARON paint program was launched, where its creators had coined the term “digital art” and put it into mass use for the first time. Not long after, just 5 years later, Andy Warhol published a series of digital art to promote the Commodore computer.
Fast forward a couple decades into the future, and today digital art is everywhere – from blogs and digiart-centric websites, through digital art galleries and museums available both online and offline, to billboards that use it for marketing, and even to virtual-reality exhibitions. Non-fungible tokens, or NFTs for short, are unique digital assets that permeate through many industries. The charm that entices people to pay for what is essentially binary code, is the right they receive as sole owner of this piece of information, procured by crypto developers and artists.
The first commercial break of NTFs came during 2012-2013 with what is called Colored Coins, a system using bitcoins to represent various assets for a number of use cases. Its limit was that it worked best in a permissioned environment where all participants had to agree on its value and even a single outlier could cause the entirety of the system to crumble. However, it set the ground for the next iterations of NFTs.
A new wave of digital art in the form of NFTs became available to the crypto masses through the peer-to-peer financial platform Counterparty. Built on top of the Bitcoin blockchain, with an open-source Internet protocol, this was the only place online at the time, where participants could create asset in a decentralized exchange and earn the token with a ticker XCP. Among the many projects Counterparty had available were meme trading and a trading card game, both of which later got expanded. By 2017, projects like Monegraph, Rare Pepe, and CryptoKitties had turned out to be the most profitable businesses, and ever since, numerous projects have been popping up every year.
Cryptoart’s present and future
Amongst the many different terms for kinds of digital art, the one on blockchains is called cryptoart and it is most commonly referred to as NFT art, crypto-collectibles, and nifties. Due to the decentralized and transparent nature of blockchains, it does not pose a challenge for anyone to find proof of the rarity of these tokens. Christie’s New York became the first auction house to register a sale of an NFT. Curiously, it closed at the price of $318 million USD and the piece sold was the Barney A. Ebsworth collection. Artworks from this collection were actually created using traditional tools such as paint on a canvas, but all transactions were made through the blockchain – a much needed acknowledgement of the potential that art and blockchains have.
The year 2021 was monumental for blockchain art, as it marked a new step in this sector with the sale of digital artist Beeple’s “Ëverydays — The First 5000 Days”. Sold for $69 million USD at Christie’s New York, the entirely digital art piece’s selling was an event that signalled the coming of a new age in art. Very shortly after this auction, multiple NFT art marketplaces started popping up, such as OpenSea, Nifty Gateway, KnownOrigin, Rarible, and fine-art marketplaces, such as Artchain.world, Aditus, Maecenas, Masterworks, and Portion – each offering unique value propositions.
In terms of accessibility and potential for profit, NFT marketplaces are much easier to garner the attention of a large audiences than classic galleries. Such an opportunity to make a name, alongside a small fortune, for oneself is hardly something any digiartist would wish to miss, and understandably, the numbers of artworks that are produced is almost exorbitant. However, the effort and time put into making all of those unique assets for as many people as possible are also rewarded accordingly. Usually, an artist would keep 50% of the sale price, with the rest going into the gallery’s wallet. Any reselling of the artwork results in no tangible profit for the artist when done traditionally. Compare that to how things are in the cryptoart world, where more than 80% of the initial price can go to the artist and 10% or more can be earned through any subsequent sales.
Another feature of NFT art that stands out is traceability, as assets can simply be transferred using a secure and guaranteed-to-succeed smart contracts system, and their provenance and value are tracked at all times. Verification is easier than ever, with no room for human error and processing speeds that regular methods are unable to match. Due to the liquid value of NFT art, it has also become a value for investment, and one where collectors can enjoy the rarity as much as they want.
The value of art can be different, but in the most common sense where scarcity is provable and security and transparency are present, a decentralized format can be the wisest choice. Cryptoart has an undefined amount of room for growth, and the last few years have been just the beginning.