At the start of this year a piece of art sold for €69 million at Christie’s
That may be a lot of money but can be par for the course when it comes to the art world sometimes. What made this piece unique was not that it took 5,000 days to create or even the price. The piece, entitled EVERYDAYS: THE FIRST 5000 DAYS, was actually the first purely digital artwork ever offered at Christie’s.
This sale is part of a growing emergence of a new market in the art world in the form of the digital collectible, also known as a non-fungible token (NFT). But why would people spend hundreds, thousands or even millions on a collectible they can’t physically touch and could easily be copied and pasted? The reality is that digital collectibles are not any different from their physical counterparts and it’s time to demystify what NFTs are and their value.
Defining the value
Firstly, to set the record straight, an NFT is a unique token. It sits on the blockchain which holds all the data about something someone has purchased and provides proof of ownership. It’s like a digital receipt that can’t be tampered with. Digital art doesn’t just sit on a file either, it can be easily displayed and interacted with through digital platforms like Terra Virtua’s. In the art world, whether physical or virtual, it is vital to prove ownership and authenticity. In the physical side of the art industry, forgeries are a huge problem and, despite the checks in place and the experts on hand, there still isn’t a fool proof system in place.
Proving the authenticity of something, particularly in the collectibles world, plays a big part in giving the piece its ultimate value. On top of that is the rarity of something. Much like the way the rest of the world works, the less of something there is, the more valuable it is. This brings us back to the question of why have something that can be copied?
With NFTs, buyers get proof of ownership of the original piece upon the transaction taking place, and while there might be other digital versions, or copy and paste knock offs, this doesn’t alter the fact that the buyer has the original. Furthermore, an NFT is permanent. Unlike digital assets in games like Fortnite, which would disappear if the game went offline, an NFT will always exist. It will outlast both seller and buyer. It means the buyer can keep it as long as they want, cementing their ownership of it and sell it or pass it on to future generations.
NFTs don’t have to be expensive either. While the sale at Christie’s was expensive, this is a rarity and buyers can purchase something from as little as €12 and still be certain it’s a licensed and genuine product.
Enabling a global stage
NFTs aren’t just a buyers’ game though, far from it. The creation of digital artwork and the sale of it using blockchain technology has opened up a whole new marketplace for budding artists and is blurring geographical boundaries. While artists creating physical work can often be tied to their local markets or one specific place displaying pieces in galleries, NFTs and the internet enables those producing digital pieces to have a global audience at their fingertips.
The role blockchain plays in providing ownership and authenticity is vital for these artists too. Without a large following already, many artists including those from remote parts of the world, may struggle to prove their credibility. Whether or not the art itself is appealing, art lovers are unlikely to purchase an item if they don’t have concrete proof of the authenticity of the piece.
NFTs essentially level the playing field and create opportunities for millions of artists to get their pieces recognised worldwide. While reputation will still ultimately be a contributing factor, as one would expect, it enables artists to let the artwork speak for itself.
A world of endless possibilities
In the art world, the beauty is very much in the eye of the beholder. The rise of digital artwork is not creating opportunities just for independent artists, but for brands too. With digital collectibles, the opportunities and the chance for businesses to reach a whole new audience through digital platforms are endless. They can create digital art from multiple sectors, from movies to comic books and beyond. Brands like Legendary Entertainment and Paramount Pictures are already on board, with influencers like Big Narstie creating content too, showing the potential of the industry to attract the biggest names. Anything that brands can imagine can be built with this new technology, creating truly unique and exciting fan experiences. What’s more, in an era where consumers have never been more aware of their impact on the environment, businesses are under pressure to show they’re doing everything they can to minimise their effect. Fortunately, when using blockchain platforms like polygon, providers can reduce their energy usage by 99%, ensuring neither buyers or sellers are contributing to global climate crisis.
The pandemic drove everyone online, from consumers to businesses and individual artists. The art world has been disrupted as any, but out of this digital-first transformation a new disruptive market is emerging. With blockchain underpinning it and providing the security of authenticity and ownership, NFTs are set to take the art world by storm both for buyers and sellers.
About the Author
Gary Bracey, CEO and Co-Founder of Terra Virtua. Gary is a BAFTA-nominated games industry veteran of 35+ years, having been active in all aspects of the business from Head of Development at Ocean Software in the 80’s/90’s to founding the tech company Digimask from 2000. He’s been involved in every transition of the videogames cycle, from home computer to console to mobile to VR. Gary now is leveraging his extensive business network and experiences to bring NFTs to the mainstream with Terra Virtua.
