The record sale of an NFT by Beeple, Everydays: The First 5000 Days, that made $69 million exactly a year ago – was definitely something never seen before. And yet, it was not the only impressive sale that made a buzz all over the world. Today, NFTs are presented at many prestigious auction houses and galleries. Celebrities are fully involved. Moreover, there are museums and foundations being created for NFTs. Sounds exciting. But is it really Art?

Let's start with a brief overview. The NFT - a non-fungible token - is a unit of information, which is stored on a blockchain. Each token is unique and can't be split or substituted. It can be traded easily, and every transaction is traceable and available on a public ledger. NFTs can be used for purchasing digital goods such as an image, video or music; as well as a real item – a document, signature, or a ticket to an event. To gain a broader perspective, have a look here.

As one of its important features is the ability to assign or claim ownership of any unique piece of digital data - it has solved the issue for digital goods that previously could have been used or replicated without any control. In relation to art it definitely produced some advantages. Apart from its traceable "proof of authenticity" and ownership, it gives total transparency to the price, history of transactions and provenance, which are often opaque in the traditional art market. The purchase is instant and does not include any costs for shipping or storage. Anyone with a Metamask wallet and some cryptocoins can easily enter the market. There is no "middle man" such as a gallery or dealer, so everything can be purchased from the creator, be resold directly to someone else, and vice versa. Moreover, as liquidity is high, everyone can find something that suits them.

So does the NFT's combination of factors enable Digital Art to claim a new era?

Certainly! And yet, this lucrative state of affairs is not without its issues. Apart from the very limited ways in which to show and enjoy your NFT, there is the serious risk of being hacked. Losing your NFT by accident, or having it taken away due to some geo-political issues. On top of that, the NFT market is unregulated and has very little legal protection. Anyone having a problem with an account or experiencing a theft, barely gets any response or resolution to the problem. Plus, the issues of money laundering are ever present.

Nonetheless, in 2021 alone, the sales of NFTs made – $41 billion. Its popularity soared so high that Collins classified the NFT as the word of the year. Everyone has heard of Beeple, CryptoPunks, Crypto Kitties, and The Bored Ape Yacht Club, to name but a few of the best known... Beeple creates images using a studio; CryptoPunks were created by a predefined algorithm, whereas CryptoKitties were based on a game with a genetic algorithm involving an idea "to breed, collect and then hold digital kitties."

It would be misleading not to mention other creators, whose approach is rather based on an individual concept of each NFT and within the artistic domain, such as FEWOCiOUS or Hackatao. Or someone like Paris Hilton or Melania Trump creating their NFT too…

However, "Every image is not a work of art, and every work of art is not an image", as noted by the acknowledged sociologist and specialist in contemporary Art, Nathalie Heinich, during the conference about NFTs. Indeed, the process of artification is rather complex. Not every created image (nor object), by virtue of its rarity and creative concept, directly becomes a work of art. There are studies conducted by historians and sociologists and observations made involving the work by institutions, curators and critics, that aim to define it.

"Art emerges over time as the sum total of institutional activities, everyday interactions, technical implementations, and attributions of meaning. Artification is a dynamic process of social change through which new objects and practices emerge and relationships and institutions are transformed." It seeks to clarify and explain how a certain production is meaningful not only for specialized minority groups, "but to the point where the status of these productions as art becomes common knowledge and goes unquestioned" (Roberta Shapiro & Nathalie Heinich).

Despite numerous individual initiatives, the status quo of the NFT (as Art) belongs rather within a subjective opinion than an objective and common recognition.

There is a lot of discussion about The Community around the NFT; sharing ideas, talking on Twitter and at times being invited to certain events, or gaining access to something seen to be at the core of its essence. Obtaining a particular NFT is like an entry ticket to this community, which is very glam, especially with so many celebrities involved. Nonetheless, it remains rather a limited group, which acclaims the importance of itself as a community much more than what is actually created.

While the "traditional" actors try to catch the wave, the auction houses and dealers adapt to the potential demands and seek new fortunes. Artists hope to expand their public. And collectors search for good deals or a known traditional artist, in the hope that their legacy can also be legitimate in the metaverse.

That is not to say there is no genuine creation or collecting. But the astronomical prices and the exploding bubble of NFT Art seem like a tsunami of hype.

Earlier in February, Sotheby's organized a "historical" sale of CryptoPunk's collection, estimated at $30 million (for which price you could buy a decent Monet or Van Gogh). Lavish communication, conferences, fancy receptions – all gears to emphasize how important this sale is. And yet, it's been pulled within a few minutes before the opening. The seller, 0x650d, commented: "nvm, decided to hodl". It does happen that lots are pulled at the last minute, but wasn't it all a bit overrated?

Certainly, the NFT has its fabled facilities of being transparent and flexible. It is a tool and it opens a great field for experimentation. Apart from the capabilities for Digital Art discussed earlier, so much utility and facility come with it too. There are museums that put their collections in NFTs to raise funds, or in such unfortunate times as at present with the crisis in Ukraine, NFTs are used for humanitarian purposes.

For sure, there is a great future with a lot of possibilities presented by NFTs. But in terms of Art? It is too soon to relate all content created in NFTs to Fine Art.

The personality of the creator is also important. When you buy a Picasso (a fortunate few), you don't only get an oil on canvas. You also get the personality, and the whole story along with it, the context, the technique, the history. Whereas with NFTs, it seems anonymity is preferred, and the community remains its strongest audience. Undoubtedly, the blockchain does make this market or creative field available to anyone who would like to make NFTs and present them. But having white paper, canvas or any other material doesn't make an Artist of anyone who uses them. This is where the need for institutional and curatorial expertise comes in, to get to the artification. And this is not in place at the moment.

To wrap it up,

The NFT is a great tool. It is fashionable now, and is speculative. But only time will tell what will remain and prove itself, to become truly a part of Fine Art.

10 June 2022 | Art Market