It’s a fad! It’s the future of media! It’s your ticket to easy street! It’s a scam! The art world thinks non-fungible tokens are a thing, but are they a thing for you? Your deputy president, David Blumenstein, took a look into them.
An NFT is a token (bit of code) on a blockchain (an online ledger) that provides theoretically unbreakable proof of ownership.
If you’ve heard of NFTs, it’s probably through a breathless news story about venerable auction house Christie’s selling a piece of digital art by a guy called Beeple for $69 million.
Or you heard that the CEO of Twitter turned the first ever tweet into an NFT, and sold it at auction for about $3m.
The idea is that by “minting” an NFT and attaching it to a piece of digital content, you create artificial scarcity for that digital object, meaning it’s somehow more than just a JPEG or other bit of code (which is infinitely copyable).
If you do a painting of a duck, is it worth anything? Sure, if a client has commissioned you to draw it for them. But that’s the end of the transaction.
What if you’re Andy Warhol? Now lots of people will pay for your duck painting. But there’s only one. So you print up one thousand “limited-edition” prints.
They’re only “limited” because you said they are – but you’re a hot commodity, so they are too. Now a thousand people can buy your duck, and you made some good money. Later, they resell their ducks for a huge profit. But you don’t get a piece of that.
Because legal “smart contracts” can be embedded in NFTs, any piece of digital media (say, your duck painting) can now theoretically be considered “unique”, be monetised and be trackable – and, when resold, automatically pay resale royalties back to the creator (in cryptocurrency, of course – we’ll get to that shortly).
The main way NFTs are being used right now is to “mint” digital collectibles. Want to buy a token that says you “own” a “limited edition” digital version of Hokusai’s “The Great Wave Off Kanagawa” (1831)? The British Museum will sell that to you.
Do you like watching “classic catches” on Sunday cricket broadcasts? Expect to see Cricket Australia and Channel Seven auctioning off videos of those catches as NFTs to wealthy collectors pretty soon.
Because NFTs are relatively new, there’s a casino full of techno-utopians, opportunists and out-and-out scammers trying to cash in, quickly, before the hype dies down.
You barely need to peel up the surface to see they’re powered by “boiler rooms” of enthusiasts “pumping” NFT projects – pulling in as many prospective buyers as possible, slavering after the interest of influencers and celebrities, and hoping that once the project launches, the price shoots up and early NFT-holders become wealthy.
If you’ve been around since the early internet, you’ve seen tech bubbles like this before, and if you’re an ACA member, you’ll probably remember the Dutch tulip bulb mania. This is a similar situation.
What’s interesting about NFTs from our perspective is that illustrators are at ground zero of this mania.
Some hope that the technology will “legitimise” digital art, and make it culturally possible to ask serious money for digital artworks. Some are already doing it. One artist I spoke to told me he will “never have to think about doing client work again” thanks to the money he has made from this stuff in the last two years.
The same may happen for my colleague Tim Molloy, a New Zealand comics and gallery artist who, as I write, is about to launch his NFT project, Toddlerpillars, with his friend and collaborator Jon Beinart.
“Art’s been my side hustle, but it became my main job because of the pandemic,” Tim told me. Having lost his day job, Tim started started selling his (actual, physical) paintings on Instagram.