I have had a number of enquiries about NFTs over the last few weeks given the stratospheric prices that digital works of art are fetching. Non-Fungible Tokens are digital tokens that accompany the work of art, mainly digital, to ensure that the ownership is secure and linked to a blockchain. In common parlance this means that the ownership of the token (and thus the artwork) is impossible to change without approval from the owner. Blockchain is basically a common ledger that stores ownership details of a given digital item – be it Digital Art, Bitcoin, Ethereum or any other digital currency.
It is important to note that NFTs are not in themselves a medium for works of art – what they do is allow art created digitally to have property rights. This very fact has caused an entire medium, digital art, to be available for acquisition. And, as such, the whole of the art world has been shaken by the immediate overload of digital art to come to market in the last few months. The apotheosis of this event was the sale of a digital work of art entitled ‘Everydays – The First 5000 Days’ (the NFT bit is merely the authenticator) by the digital artist Mike Winkelmann (aka Beeple) for nearly 70m USD including premium at Christie’s yesterday. Christie’s posted that the buyer was Metakovan, real identity Vignesh Sundaresan, who is the founder of Metapurse, the largest NFT fund in the world.
My take on this whole episode is that there is far too much money chasing new, but derivative, works of digital art and the whole bubble will burst in the coming months. However, in the long term it is a big deal for establishing authenticity of editioned lots in particular. As physical items start to be sold with an NFT they will work as certificates of authenticity and ownership, held on a common ledger that cannot be changed or hacked. I see this becoming the new normal in the contemporary art market.
Personally, I would not advise that anyone get caught up in these early wild west days of NFT hunting. The values will calm and at some point we shall see some truly fantastic digital art on the market but, in my view, not yet.