It is hard to believe, but it’s true: a NFT (non-fungible token) digital artwork by Beeple entitled, Everydays – The First 5000 Days sold at Christie’s yesterday for $69.3 million. It is a collage of all of the artwork Beeple created for the past 13 years when he challenged himself to make a digital work of art every day. Judging from his Tweet, it’s fair to say that the artist was just as stunned as everyone else.
In many ways, this event is very much of the moment; it was instigated by a group of outsiders disrupting the establishment and its control of the market in a way that is comparable to the GameStop stock surge. But of course, it is exceptional because the art market is unique in important ways.
A NFT is digital art that is sold in a limited edition with cryptocurrency using blockchain technology. In many ways a NFT is similar to a fine art print like a silkscreen by Andy Warhol, being an original work of art that is a multiple, but one of a fixed number that is available. Like an original print, the artist retains the copyright so the image cannot be reproduced and sold. Unlike original prints, NFTs are traded using blockchain technology, which is a digital ledger that stores transaction data permanently and so the buyer has a lasting record of both ownership and authenticity.
This is a big deal for collectors.
The vast majority of art can’t be authenticated with absolute certainty because the provenance, or the history of the ownership of the artwork, cannot firmly be established. Often experts like museum curators are relied upon to authenticate art, but their opinions are subjective and can be compromised. With blockchain technology, the authenticity and provenance are locked in permanently.
Another advantage of blockchain technology benefits the artists, who can attach a contract to their work of art that guarantees them a percentage of a secondary market sale or prohibits the resale of the art altogether. Many people don’t realize that artists get nothing when their art is resold and so naturally, they get frustrated when people make huge profits from flipping their art.
This art sale also is representative of a fad. NFTs are traded by the Super Cool and Uber Wealthy, for example Elon Musk’s girlfriend Grimes made $5.8 million in 20 minutes trading NFTs a week ago.
For a terrific podcast on NFTs, listen to this episode by The Art Newspaper.