The buying and selling of art has gone digital and people are confused, excited, and angry. The value of individual pieces of art has always been an essentially artificial one, as there is no intrinsic and objective value in a work of art (like a twenty-dollar bill). Humans create the value and sustain it. It works the same way with art. Given the usually utilitarian perspective we live most of our lives in, it seems like a waste of money. You can’t use it and it doesn’t do anything so what value does it have?With that in mind,NFT art seems like a waste of money to an even greater degree, but is it?

i. ‘SATRN’ by artist Sutu and Deamau5 | Credit: playtoearn

If you had$600,000 andwere given two optionsto spend it on either buying property or buying a piece of art, majority would buy property. And for good reason too, you can live on property, take showers, park your car, cook your own food etc. A piece of art can do none of that. But you can display it. But with NFT art you can’t even do that and yet some pieces are going for millions of dollars. But what even is an NFT?

NFT stands for ‘non-fungible token’ which is as cryptographic token that represents something unique that cannot be mutually interchanged.This means thatit cannot be exchanged and only one or a limited few are produced. Essentially, NFTs are digital collectibles. Contrast this with a cryptocurrency, like Bitcoin, thatcan be traded for more of the same. You can’t do that with NFT’s as each are unique.It’s like an artist signing a painting but this time it’s digital.How does this work then? This is where people get confused.

NFTs are part of the Ethereum blockchain which is similar to a cryptocurrency.Blockchains were originally created to record financial transactions and are used in NFTs as a way to verify an artwork as the original. Hence why they are each unique. They are also impossible to change so you can buy and sell these artworks with the blockchain as proof that they are indeed authentic.This provides much of the value.

This isn’t all that different to how the art market operates traditionally. A piece of art might become iconic to a specific movement, it might have been produced by a famous artist, or it might be very popular. All these things and more contribute to the price of an artwork that is eventually agreed upon by a buyer and seller. It’s all a matter of negotiation. Okay, but why are NFTs taking off?

ii. ‘The Art Dealer’ by Max Gaisser, 1889

Digital artworks can be copied and shared with the click of a button. There are literally thousands, if not millions, of copies of some of these artworks. But when you do that, you don’town the original. Anyone can buy a print of the ‘Mona Lisa’ from a museum, but only one person can own the original. The NFT makes sure you own the original, not a print.

iii. SerwahAttafuah’s ‘Voidwalker’ | Credit: ABC News

Artists are very excited about this as it means that they have another source of revenue for art that they would otherwise not be paid for. Artists can retain 10% of each sale after the original transaction. Western Sydney artist, SerwahAttafuah, was the first Australian artist to sell an NFT, ‘Voidwalker,’ which went for $US2,000. That’s chump change compared to what others have gone for. ‘Nyan Cat’ was a meme back in 2011 and the original artist, Chris Torres, has sold the NFT at auction for over $US 500,000! This isn’t the limit either, Beeplecreated a ten second video whose NFT sold for $US 6 million.

v. Chris Torres’ ‘Nyan Cat’ | Credit: Artnet News
iv. Still of Beeple’s video | Credit: The Art Insider

People that are angry over this argue whether or not there is a point to owning the original artwork if a copy is literally just as good. Well, to put it simply, it’s a flex. Just like owning any piece of expensive, one-of-a-kind art, it’s a flex. It adds very literal practical value with its only value being what the buyer or seller gives it. If you’re willing to pay $100,000 for a particular piece of art, that’s the value it has. If someone is willing to pay $120,000, then that is its value. Essentially, the people angry about this are those who think that the buying and selling of art is superfluous in the first place, and those who don’t think digital art has the same value as traditional art.

Musicians, like Flume, are also taking notice of this. Flume has created NFTs with artist Jonathan Zawada, that are short 1–2-minute audio segments that go along with a visual. They are targeting fans willing to pay for ownership of these things without forcing everyone to pay for it. If 15 of these artworks are sold for $1,000 each, with each subsequent sale giving the artists 10% of the proceeds than artists can still get paid whilst not restricting content for most listeners. With digital ownership a complicated issue, NFTs simplify it. – Flume tweet about NFTs

Many are hoping that this new trend becomes another form of art collecting. Others are arguing that this is just another bubble that is about to burst. Only time will tell us for sure, but it stands to reason that it could take off in the same way cryptocurrency has. It works the same way as traditional art selling so as long as people see value in it there will be a market for it.