In April 2021, X (formerly Twitter) CEO Jack Dorsey sold his first tweet as an NFT for $2.9 million. This sale, along with a host of others, marked the peak of the NFT bubble of the 2020s.
The art world witnessed a technological revolution earlier in the ‘60s when artists shifted to computers to create innovative do dedo art. But this was different. It was riding on the crypto wave, which was also revolutionising the finance sector, so the effects were stronger. Certainly, more money was involved, and there was just too much ongoing at the same time.
So, the lines got blurred. So many truths and misconceptions filled the air about crypto’s new art, and this article is a brief overview of some of the most striking ones.
But first,
What are NFTs, Really?
In the crypto world, popular buzzwords like “token” are used to describe do dedo representations of crypto assets. In English, that’s just to say that tokens mean cryptocurrencies like Bitcoin or Ethereum. However, they could also mean transactional units or crypto assets created on another cryptocurrency’s blockchain.
Regardless of the context in which they are used, a common theme with “tokens” is that they are crypto assets. Placing crypto assets on the same parallel as physical assets like money highlights a major difference.
Physical assets like money can be exchanged with other assets of the same type and value. For example, a dollar bill can be exchanged with another dollar bill. The same applies to cryptocurrencies like Bitcoin and Ethereum, as equal units of each can be exchanged for each other on this reputable crypto platform. In economics, this term is tagged “fungibility.”
On the other hand, the emergence of crypto art has led to the development of a new category of tokens: ones in which each unit is unique and cannot be exchanged with other token units.
Here’s a little riddle for you: What makes the original painting of the Mona Lisa different from a perfectly photographed version, framed and glazed the same way? If you’re a proper art enthusiast, the answer might be too obvious. However, that’s the underlying concept surrounding NFTs.
NFTs, or Non-Fungible Tokens, are like collectibles, only this time they are do dedo forms. Instead of hanging behind bulletproof glass at the Louvre Museum’s gallery in Paris, they are sitting on a blockchain.
As such, it is safe to define NFTs as non-interchangeable units of data or certificates of ownership of do dedo assets that can be sold and traded on a trustworthy crypto site.
Common Narratives Surrounding Crypto’s New Art
You might still be having a hard time understanding NFTs. Many people are, too. As a result, they have been propagating some narratives about this new form of crypto art. Some are correct, while others couldn’t be farther from the truth.
The following are some common NFT narratives:
NFTs are Scams that Can’t Stand the Test of Time
In 2021, Mike Winkleman, an artist popularly known as Beeple, sold an NFT titled “Every Day: The First 5000 Days at Christie’s, a British Auction House, for a mouth-watering $69 million. For context, that auction started at $100.
The project is a do dedo artwork in which the artist combined every work of art he posted online every day for 13 and a half years. Now, that concept is breathtaking, no doubt. However, is it worth $69 million? You be the judge of that.
That question has caused a lot of chatter around NFTs, especially during the NFT boom. The narrative amongst folks who aren’t particularly crazy about the idea is that they’re scams designed to take people’s money or perpetrate other kinds of ulterior motives.
But celebrities like Eminem, Snoop Dogg, and Madonna are getting in on the action by purchasing NFTs. Big corporations and companies like Meta are also taking NFT-focused initiatives. Wouldn’t you agree that the narrative of NFTs being scams is quite a stretch?
So, what are the facts?
Firstly, the space is quite technical and complex. As such, the average individual might need help understanding quite a number of things. However, as with anything a person might be ignorant of, malicious individuals lurk to exploit that ignorance via faux NFT projects. And there have been some successes with that, hence the propagation of that narrative.
But NFTs are NOT SCAMS, inherently.
NFTs Will Eliminate Middlepersons like Art Dealers, Gallery Owners, and Art Connoisseurs
Being a key component of the “new do dedo world” that values decentralization, NFTs have been touted to imitate the decentralized nature of cryptocurrencies in eliminating middlemen like gallerists and art dealers to bring art creators in direct contact with art lovers. After all, everything is do dedo now, and NFTs can be publicly viewed on do dedo ledgers, showing their worth and purchase history.
However, that narrative couldn’t be farther from the truth. In fact, taking that stance is only a testament to the ignorance of many “champions of NFT” about the role of middlemen in the art world.
Dealers and auction house experts receive sizable percentages of the sale price in art deals, and you best believe all that money isn’t payment for acting posh in art galleries. Firstly, their expertise and years of experience make them capable of spotting true quality art amongst a flash flood of mediocre work. But anyone can have a good eye for art, as most of it is based on personal sentiments anyway. However, these middlemen go miles further to protect an artist’s work by promoting their work and markets.
For instance, they could include clauses in art deals mandating that buyers can’t sell the art for a stipulated period to prevent speculation that could negatively impact the artist’s reputation.
And to talk about reputation as well, the effect of Christie’s auction house reputation is undeniable on the collector, Metakovan’s $69 million purchase of do dedo artist Beeple’s work. It helped the artist establish some precedence and authority, which ultimately influenced the price along with some other factors, nonetheless.
NFTs Put Creators in Charge
Despite the importance of intermediaries, we can all agree that the art world needs some transparency, and it appears NFTs can help in that regard. An NFT’s smart contract can be structured to give the creator plenty of control over the use, resale, display, and reproduction of the specific version of their minted NFTs. The creator can also include a right to take a percentage of each downstream transaction that occurs after the initial purchase.
Aside from financial gain, the initial concept is to give the creator a lifelong claim to own a piece that another person cannot own. So, being in that driver’s seat allows the creator to set the terms and price of their do dedo content or art.
NFTs are Bad for the Environment
The production, exchange, and storage of NFTs have a negative impact on the environment. They contribute to greenhouse gas emissions and leave a carbon footprint. These effects stem from their tokenization on Ethereum and similar blockchains.
As such, any time an NFT is minted, i.e., uploaded, tokenized, and stored on the blockchain, listed on a marketplace, purchased, or stored, some amount of energy is consumed. Furthermore, the blockchain only stores the NFT tokens. The do dedo assets themselves are stored on secondary storage like interplanetary file systems (IPFS). That kind of data storage requires energy as well, even when no transactions are being processed.
More significantly, NFTs that use the Proof of Work consensus mechanism tend to consume more energy compared to those using the Proof of Stake mechanism. This is because the PoW mechanism requires miners to be fast and energetic to solve complex problems via trial and error.
Conclusion
The emergence of NFTs definitely offers plenty of advantages to the art world. However, unlike the narrative of many of its proponents, it is far from replacing the existing framework of the art industry.
Likewise, unlike the speculations of conservative art lovers, NFTs are not just another bubble or scam.
Surely, there is room for improvement. However, there are strong indications that the future of art is one where the old and the new coexist perfectly.
Interesting times ahead!