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Part Three: Will NFTs Really Take Off?

Words:

Edd Norval
March 12, 2021

Abuzz with the speculation of its possibilities after a jpeg recently sold for over $60 million, NFTs are on the tip of everybody’s tongue. Spoken of in the same breath as cryptocurrencies like Bitcoin, we look at the limits and pitfalls that could impact the growth of this disruptive new trend.

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As we discussed in part one, NFTs are a way for artists to authenticate original digital productions, whilst retaining more autonomy from dealers and middlemen. In part two, we delved deeper into what the tokens represent as both certificates of authenticity and what this could mean for artists and the art market in the future. In this final part, we will assess their possible limitations.


Value in art is largely derived from authenticity. It is crucial that, for a work of art to be valued, it must be the original. Scarcity and exclusivity is where the big bucks are. NFTs have made this possible in the digital domain, previously the Wild West of art, a barren cyber-desert with roaming outlaws who have no regard for sheriffs and copyright. 


This concept of authenticity is easily translatable to the real-world. Jackson Pollock’s iconic abstract expressionist works of splatters are kinetic minefields, buzzing with psychoanalytical depth and created with the autobiographical ballet of his movements around the canvas. Good luck trying to replicate that. Sure, you can flick your brush, but you’re no Pollock.

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So, if you want to own one, you’re going to want to own the original. That’ll set you back upwards of $200 million as per the 2015 sale of Number 17A. This is obviously not so in the digital world, where owning an original had hitherto been an unknown concept. If you wanted the image, you could just right-click and save it - legally or illegally, depending on copyright and creditation. 


Digital art is created on a computer, so therefore doesn’t have the same physicality as a painting or sculpture. Herein lies the immediate problem - will a market emerge and sustain beyond this original bubble of hype for something relatively intangible?


As documented by Bloomberg, the case of Ben Mauro has become an early illustration of where NFTs may see their growth become limited. Mauro is a concept artist, having worked on big-budget projects like Halo and The Hobbit, but has been limited in ways to really capitalise on his own hard work. This is an issue all too well-known for those working in this space.

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Despite his reputation and name within the industry he was, admittedly, broke. Then, almost overnight, Mauro had become a millionaire. He wasn’t doing anything differently, other than authenticating his work through NFTs, but the way we viewed his work had changed. This question almost borders on the realms of philosophy and is extensively debated throughout art history - whether a creation becomes more real because it has been authenticated?


The obvious answer, when you can’t reproduce that object exactly would be yes. However, digital art can be reproduced exceptionally easily. On the one hand, artists are now able to make money where they wouldn’t have previously been able to, but that also opens up a whole new frenzied marketplace, where dollar-signs are appearing in eyes and opportunities are being ruthlessly capitalised upon - not just by artists, but scam-artists.


In Mauro’s case - he is unquestionably the artist and is making money from the back of his art. However, due to the intense interest, there have already been major scandals involving copyright as, essentially, you don’t actually have to prove you’re the original creator or copyright holder to have an NFT linked to an artwork. They’re not produced by some centralised sanctioning body. They’re not a Twitter blue tick.

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If, for example, a particularly attractive piece that demanded a high market value was online, there’s nothing currently stopping me from slightly editing it and calling it my own. Because there’s no ‘artist’s hand’ in the digital realm per se - what deems mines any less valuable or authentic than the one viewed as ‘original’? What the NFT craze may be doing is not taming the Wild West of digital art, but just throwing money at it.


Already the NFT phenomenon has been satirised by a Banksy, not by Banksy. An anonymous group of artists called @burntbanksy burned an original Banksy screenprint worth $70,000, turned it into a NFT and sold it for $400,000. It was the first original Banksy turned into an NFT and the concept largely drove the price, “By removing the physical piece from existence and only having the NFT, it makes sure the NFT due to the smart contract on the blockchain will ensure that no one can alter the piece, and it is the true piece that exists in the world.” Incidentally, for a new system that can be viewed as empowering artists - Banksy didn’t see a penny. 


As if to compound the sense of madness, when the creator of Twitter, Jack Dorsey, recently put his first tweet up for sale as an NFT at the value of $2.5 million, people began scratching their chin. What’s more, many have complained about tweets being deleted after they’ve been sold as it is the data to the tweet, not an image of it that is protected by the NFT. Perhaps, even worse, artist’s have been changing the jpeg they’re selling on online auctionhouses after the fact they’ve been ‘minted’. Is this conceptual art at its best - a disruptive movement that will redefine art? Or, is this a temporary moment of coronavirus-tinted ‘tulip mania’ induced by long days spent locked inside away from galleries and museums?

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Another main concern, as with any crypto, is the excessive energy consumption required to sustain the system they are built upon. Most NFTs belong on the Ethereum blockchain, which anually utilises the same amount of energy as the country of Iceland. There’s even been a website created to highlight the troubling ecological footprint left by the tokens.


This boils down to the power required to sustain the blockchain upon which all of the information of an NFT is stored. Creator of the site, digital artist Memo Atkin, calculated that the standard power usage in the minting and transaction of a piece of art through NFTs amounts to roughly that of the average American in a month.


Energy consumption of Ethereum’s blockchain can be, and is being, mitigated more and more through sustainable power sources. It is, however, a significant factor at the moment, particularly when considering the claims made by a great many artists of caring for the environment.


What can’t be mitigated, at least for the time being, is the chance that anybody can just save your art from online, attach it to an NFT and authenticate it as their own. I’m sure that, in time, this will become remedied - but for now, keep an open-mind, sharp-eyes and research and consider what these purchases hold in terms of value to you.


At staggering pace, the art-world seems to be running head-on into this storm. If it makes it out of the other side, it’s bound to be changed - one way or another. 

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