Have you ever bought “NFTs”? They can be digital images, animated videos or an admission ticket. NFTs are “non-fungible tokens.” Each token is unique and associated with a work or thing. It confirms that you have made the purchase and own the property rights to, for example, an image – secured by the blockchain.
Owning a JPG image file – crypto art!
As a buyer in America, England or worldwide, you can be proud to own the original version of a JPG file. This is crypto art! Anyone can still view the purchased image on the Internet for free, download it and reproduce it. As the buyer of the NFT, you will still always remain the owner. Granted: This is a difficult subject to understand for the uninitiated and older generations.
Can tweets be tokenized as NFTs?
Almost any object in the world can be turned into an NFT. Just a few months ago, however, this was not entirely clear even among crypto art enthusiasts. This is illustrated by the following amusing incident: the authors of the NFT portal theverge.com were looking for a “silly and not real” object in March 2021. “Something that would never be tokenized as NFT,” they write on their portal. “A tweet is it!” they thought. It was unlikely that a tweet – that is, a message on Twitter – would ever be tokenized as an NFT.
No sooner had they published the post on their portal than Twitter founder Jack Dorsey sold the first tweet he ever sent at the time he founded his company. Namely, to Sina Estavi, the CEO of blockchain company Bridge Oracle. The tweet cost Estavi $2.9 million.
However, I believe that galleries continue to play an important role in discovering and giving visibility to young artists.Conceptual artist, photographer, filmmaker and blockchain maven Kevin Abosch
Reselling digital art for a profit
The exciting thing for dealers like Estavi is this: they usually want to resell a newly acquired piece of art for more money. That’s because NFT certification turns a file that can be reproduced at will into an original that can be traded. In other words, a potentially valuable collector’s item.
Speculators are spending a fortune on crypto art. They see it as a promising investment. But genuine art enthusiasts tend to be the exception, even in America or England. For many, buying a token is about money. Most NFT collectors are deeply invested in cryptocurrencies. They are often Millennials who are familiar with blockchain technologies. Digital artists, in turn, hope to find new ways to sell.
Tokenize physical artworks, tooThere are not only NFTs, or digital art. Real, tangible art is also being tokenized via the blockchain. Juan Dominguez, CEO of art platform Maecenas says, "We are trying to enable investments for physical artworks as well. For example, we turn a single painting into many investment tokens using blockchain technology. These represent a percentage of the physical artwork and can also be traded." The first painting tokenized via Maecenas was an artwork by Andy Warhol. Those who bought a Warhol token or parts of it at auction found the symbol WRHL1 in their wallet - that's the digital wallet for tokens. WRHL1 represents the share of the physical artwork one owns. According to Dominguez, people spend a lot of time verifying the authenticity of an artwork. Likewise, they take care to set a realistic price for the crypto art. For the Warhol, he said, they assumed $5.6 million: That's one million tokens worth USD 5.60 each
Crypto art: young investors love digital collectibles
Not only in America or England, crypto art is also available in Switzerland. For example, on the portal Elementum.art, a marketplace of “dloop”. Like other blockchain companies, the start-up “dloop” is based in the crypto-valley in the canton of Zug. Elementum.art currently features and sells over 6000 pieces from 49 digital artists from 19 countries.
Art collectors who get an NFT in their portfolio are often using pseudonyms. They want to protect their privacy and buy tokenized art without being spied on. Crypto art has suddenly attracted a new generation of digital artists in recent months. Grimes is one of the latest artists to jump on the NFT bandwagon. She put her digital artwork up for sale in an auction. The proceeds: about $6 million. The best-selling piece was a unique video titled “Death of the Old.” It features flying cherubs, a cross, a sword and glowing lights set to an original song by Grimes. The winning bidder took it into his collection for nearly $389,000.
Digital artists: ‘Galleries shouldn’t be afraid’
The blockchain technology used to generate crypto art has been around since 2017, when the total NFT market reached a value of no more than $42 million. By the spring of 2021, market research website NonFungible.com already estimated the value at more than $400 million. “NFTs have changed my life,” says New York digital artist Kenny Schachter. “Everything I’ve ever done as an artist has been created as a digital file,” he says in an interview. “That includes sculptures. Later, I released them as NFTs.” The art world, he says, is simply annoyed that something so new is coming with digital art and NFTs. “Galleries shouldn’t be afraid of it either. You have to grab this opportunity and be excited about it. There’s a new, young buyer base emerging here right now thanks to crypto art,” Schachter says. Other artists are newly entering the digital marketplace and sharing their experiences with NFT art.
NFTs don’t make galleries obsolete
Unfortunately, there are also examples of crypto art that ends up in a vault somewhere. And gains or loses value there unseen by the public. As conceptual artist Kevin Abosch puts it, “I think it’s a shame when artworks disappear from the scene.” Abosch is known for his work in photography, sculpture, installation, blockchain and film. Could blockchain make the many galleries obsolete? The new technology has the potential to shift power from governments and institutions to the people, Abosch says. “But I think galleries will continue to play an important role in discovering and giving visibility to young artists.”
Crypto keys – digital art at its best
Blockchain could improve trust in the art market. Says Abosch, “But I doubt it will catch on in the art market. The art trade is not necessarily known for promoting transparency. And many participants are quite comfortable with that.” The digital artist has posted a new project on Opensea, the world’s largest NFT marketplace. The artwork is related to “Hexadecimal Testimony.” Abosch describes the work on his official website as follows: “Cryptographic keys, some of them cut, sublimate into a linguistic arcana and a repository of sacred knowledge.” Well, if that’s not a cryptic announcement.
FAQ – Frequently Asked Questions
Digital art is computer art that is created digitally with a computer. For example, images created with the help of graphics software. Digital art has been around since the 1990s. Movies, JPGs or PNG image files are recent examples. Such NFTs (non-exchangeable tokens) are tokenized via the blockchain and traded by art collectors.
A crypto-artwork is a digital file, for example a picture, music or a film. Anyone can reproduce the file at will and distribute it on the Internet. But by turning it into an NFT via the blockchain, it is an original. The NFT token is proof of authenticity and guarantees the buyer sole ownership.
Digital art can be purchased on so-called marketplaces on the Internet. Large art platforms include Maecenas, Opensea and Nifty Gateway. Artists exhibit their works there and offer them for sale. This includes digital art as well as real, tangible art. All artworks are tokenized via the blockchain and available as NFTs or investment tokens.
How is the art market changing?
Film by Frankfurt School Blockchain Center. Art 2.0: How tokenization will change the art industry and the creative market. In the film, experts discuss the following questions:
- What impact will tokenization of art have on the traditional art market?
- What benefits will tokenization of art bring compared to the current ecosystem?
- What role will intermediaries play in this evolving ecosystem?
- What opportunities does tokenization of art present for artists, investors, etc.?
- Do blockchain technology and tokenization eliminate and/or alleviate current challenges in the ecosystem, and if so, how and why?