Unpacking NFTs, the brightest new sparks in the art world
- The boom in sales for nonfungible tokens shows no sign of slowing down.
- NFTs are digital assets that enable collectors to purchase artworks without fear of fraud.
- A new platform wants to attract a digital-native audience to collecting art.
In March, the artist Mike Winkelmann — also known as Beeple — sold his work “Everydays: The First 5000 Days” at the auction house Christie’s for $69 million. The sale immediately positioned Beeple as one of the world’s most valuable living artists, but that was only part of the story. What was especially interesting about this particular auction was that the eventual buyer had not purchased a physical painting or a sculpture but a nonfungible token, more colloquially known as an NFT.
The high price tag for Beeple’s work sparked a global interest in NFTs and represented a watershed moment for the traditional commercial-art world. The corresponding impact of NFTs on art sales has been nothing short of spectacular. According to the insurance company Hiscox, by October this year NFT art sales had reached roughly $3.5 billion, with legacy auction houses such as Sotheby’s and Phillips joining Christie’s in hosting their own NFT auctions.
“More and more institutions and galleries are starting to showcase NFT artworks,” said Felicia Che, the founder of ArtGee, an online marketplace for NFTs. “They are starting to take digital art seriously, and that is a good thing.”
NFTs differ from regular artwork in many ways
Previously a designer with a keen interest in digital artists, Che founded ArtGee in 2020 with the objective of raising the profile of digital art in Asia. But not surprisingly for such a new format, there is still much confusion among the general public — as well as within the art world itself — as to how NFTs work.
“There are still a large number of people who think of NFT art as pixelated avatars, a series of slightly altered imageries, or 3D illustrations,” Che said. “And some people just don’t get NFTs at all.”
In simplest terms, an NFT is a digital asset (or token) that links ownership to digital items such as music, videos or, in the case of Beeple, a work of art. The tokens can be stored as digital files on the blockchain, which verifies ownership and prevents fraud. “Nonfungible” means that the file is unique and cannot be replaced by anything else.
But Che emphasised the importance of distinguishing between the NFT and the art itself. “An NFT is merely a driver for the different mediums of art,” she said. “NFTs provide digital art with scarcity, transparency, and collectability, but digital art has been established by many artists before the creation of cryptocurrency and has been a part of contemporary art history for decades.”
Building a new generation of art collectors
Based in Shanghai, ArtGee is focusing on the primary and secondary NFT markets, working with artists to create original content, and curating online exhibitions and auctions both on the company’s website and on virtual platforms, such as Decentraland. The idea is not only to help discover new Asian NFT artists, but also to work with collectors who are eager to break into the NFT market.
Key to this will be nurturing a new generation of buyers. NFTs are broadening the demographic of art collectors, attracting a younger, more digital-native audience, many of whom might previously have felt intimidated by the traditional art world. Christie’s said that of the 22 million people who viewed the Beeple sale online, nearly 60% were under the age of 40.
“A lot of NFT collectors are not the typical art collectors that are educated in art history or contemporary art and have knowledge in art institutions and galleries,” Che said. “Art used to feel a lot more exclusive, but with NFTs, everyone is welcomed. It is bringing in a lot of new faces into the traditional art world.”
While NFT art has without question affected contemporary art sales, Che doesn’t believe it will make traditional art collection obsolete. Instead, she argues that the integration of the NFT market will act as a complement to the physical art world.
“The NFT market and the traditional art market operate in two different ways, and neither one can ever replace the other one completely,” she said. “Just like the invention of photography did not eliminate conventional mediums like painting and sculpture, digital art will not eliminate physical art. This new technology will bring something new to the current art world and the two will coexist in the future.
The original article is on BUSINESS INSIDER, click here to see more: https://www.businessinsider.com/sc/what-is-an-nft-and-how-can-you-start-collecting-2021-12