A digital artist known as Beeple sold a piece of artwork for $69 million on March 11 at Christies, a high-end art auction website. For comparison, famous Dutch painter Vincent van Gogh’s “Starry Night” is worth $100 million.
Instead of a tangible painting, however, Beeple sold a digital collage. How can one piece of digital art be worth almost as much as a classic piece by one of the most revered painters in history?
Well, let me introduce you to the world of Non-Fungible Tokens or NFTs. These little digital tokens have changed the way art is viewed and sold.
Rhonda Holberton, San Jose State digital media arts assistant professor said that Non-Fungibles Tokens are digital certificates that get sold with a digitally native artwork.
“Right now, the way that it works is that an artist makes a JPEG or a GIF or a movie file, and then uploads their artwork to a minting application and then they make a certificate, and the certificates are then encoded or encrypted on the blockchain,” Holberton said.
The process of minting an NFT can cost anywhere from $1 to more than $1000, according to a March 23 Slate article. Slate is an online magazine that covers U.S. current affairs, politics and culture, according to its website.
NFTs can be sold on blockchains, which are public servers that document cryptocurrency exchanges, according to a May 31 article by Investopedia, a financial website based in New York City.
Cryptocurrency is a form of digital currency that is distributed by various computers, decentralizing it and making it immune to government control, according to an Aug. 9 Investopedia article.
People can buy and sell NFTs anonymously, although it can be easy to track who owns the NFTs by seeing how many hands the artwork has gone through. Once an artwork has been sold, it can be resold by the buyer but the art can still be tracked back to the original owner.
Once you have your digital artwork ready to go, you get it minted by applying for the unique digital certificate, similar to a patent that verifies its authenticity. Then, it can go up on auction websites including Foundation or OpenSea, where people can directly purchase it.
NFTs range from GIFS such as the “Nyan Cat,” an animated GIF of a flying cat with a rainbow trail that sold for $590,000 dollars in February to memes such as the “Disaster Girl,” which was made by a North Carolina College senior that sold for $500,000 dollars in April.
The only differences between NFTs and physical artwork is that NFTs are digital.
Luis Hernandez is a Bay Area-based photographer who took a financial leap and entered the NFT space in March, following the lead of many other local artists.
“[NFTs are] just a symbol of status for a lot of people, but it’s also a bit cheaper and more accessible to people and if you like the artists and the team behind it and you want to support it, then you would invest in one of those pieces,” Hernandez said.
NFTs can also be digital artwork including illustrations, graphics and photographs.
Hernandez, who works in Silicon Valley, said he views his photography as a hobby but that might change. On Aug. 3, he sold one of his photos of a Bay Area beach for about $1600 on Foundation.
“We haven’t really discovered NFT as a medium for photographers to make a living or to make income. I think it just makes it easier for people that have never thought about selling a print,” Hernandez said regarding his decision to join the digital auction space. “The NFT space provides a relatively easy way for you to showcase your art and actually have people [buy] those pieces.”
NFT consumers range from other artists to the general public who are interested in owning an original piece of digital art. Many want NFTs because they see the value others place on them.
Stephen Curry, Golden State Warriors basketball player, has a NFT illustration as his Twitter profile photo, which was created as part of the “Bored Ape Yacht Club” collection of cartoon ape illustrations.
With people like Stephen Curry buying NFTs, his fans and others might be more inclined to buy one too, according to an Aug. 30 Business Insider article.
Since 2020, there has been a large increase in sales of NFTs with 2.5 billion sales since July of this year, according to a July Reuters article.
Bay Area photographer Dakota Bryan said it can be difficult for smaller artists who may not have the money to necessarily showcase their work in a gallery.
Rhonda Holberton said the physical art world relies on a whole circuit of artists trying to get their names out through galleries.
“Huge photographers [are] making money with physical prints, like they have a gallery where they’re selling physical prints and smaller artists aren’t going to have means to be able to print out that much work, much less pay for a space to show it,” Bryan said. “So I think the NFT community is a little bit more accessible even for smaller artists.”
In addition to accessibility, artists are also inclined toward joining the NFT world because of the well-knit community aspect.
“It’s amazing being able to hop into a community where you have your tight niche group of people,” Bryan said.
Although it’s nice for digital artists to be able to connect with other photographers and creatives around the world, some remnants of elitism in the NFT space remain prevalent.
For example, Holberton said elitism remains in the NFT space as some photographers just make more money off their pieces than others.
Bryan said some of his friends who also sell their artworks digitally are struggling with sales.
“A bigger [photographer sold out in 15 seconds] and then I have really good buddies that have amazing collections and they’ve sold five or six pieces out of their 50 piece collection,” Bryan said. “They’re still going to get their sales but it’s going to be at a much lower rate.”
Hernandez said despite some sense of competition, there’s actually a lot of support in the NFT community.
There is mutual respect between the photographers and many will spend more time promoting the work of others than their own, he said.
Hernandez said he loves supporting other artists and feels as though the community is one of the best communities on social media platforms, including Twitter.
Bryan shared this sentiment.
“We’re basically hippies [that] want to create art. We’re not trying to fight anyone [or] trying to steal anyone’s clout or fame. We know that every one of us can succeed,” Bryan said.
Both Hernandez and Bryan said they’re aware the NFT community moves at a fast pace and it can be overwhelming.
However, they agree: missing one day on the NFT Twitter space is like missing months.
Hernandez said there’s always a new collection being dropped, more photographers entering the space and more artworks being sold for exorbitant amounts.
Because of this fast-paced environment, there’s a wide circulation of cryptocurrency occurring online.
Holberton said NFTs are currently attached to cryptocurrency including Bitcoin or Ethereum.
But she said it doesn’t necessarily have to be that way.
“Putting currency on the blockchain is computationally expensive,” Holberton said.
She said there’s a large environmental impact with circulating that much cryptocurrency in the marketplace because it requires lots of electrical energy.
The use of cryptocurrency platform Ethereum has a carbon footprint that can be equated to the same amount of carbon produced by the entire country of Denmark, according to Digiconomist, a project dedicated to exposing the unintended consequences of the digital world.
So while NFTs may be the future for digital creators, can there be a more stable, sustainable way?
Holberton argues it’s simply a matter of detaching cryptocurrency from NFTs and rewriting the rules.
“We need to write better rules that work for more people,” Holberton said. “Otherwise, we’re going to create a super unstable situation . . . I just think we have to get on renewables before that could ever be true.”
