This week will be a litmus test for digital art delivered via non-fungible tokens or NFTs, with two of the world’s leading auction houses set to launch their first sales of NFTs.
Interest and sales of digital art has soared in recent months, with surging demand for NFTs, which are unique, traceable digital tokens, that can be used to tag anything from images to art, video clips to audio.
Last month, NFTs captured headlines when U.S. digital artist Beeple sold a work for US$69 million via Christie’s, a traditional auction house.
That sale made Mike Wunkelmann only the third most valuable living artist at auction, after such artists as Jeff Koons and David Hockney.
But NFT volumes have slipped in recent weeks, and the total value of NFTs traded has started to flatten.
This week will see if the NFT craze is starting to taper, or is just taking a breather before rallying again.
NFT marketplace Nifty Gateway and Sotheby’s will offer works by Pak, one of the best known and highest selling digital artists, who real identity remains a mystery, while Phillips will sell an “NFT experience” by Michah Dowbak, better known by her nom-de-guerre, Mad Dog Jones.
Held on the blockchain, the digital ledger that underpins cryptocurrencies and builds a permanent record of ownership, NFTs have also become the preferred mode of ownership for digital art, as they can also be encoded to allow a percentage fee for an artist, each time a work is resold.
While interest in NFTs was, until fairly recently, confined to a niche community of digital artists, illustrators, technologists and cryptocurrency enthusiasts, interest has soared alongside the rise in cryptocurrency prices.
And it’s not just the established auction houses which are getting in on NFT action, prominent artists, including Turner Prize winners Damien Hirst and Jeremy Deller, have also announced or already launched, NFT art projects.
Although some may disparage the move, one innovation that’s hard to ignore is that cryptocurrencies have enabled artists to make money from their work.
It’s been said that when bankers gather, they talk about art and when artists gather, they talk about money.
Perhaps the true value in NFTs is not so much the absolute prices that collectors are willing to pay for them, but that the artists who are selling the art finally have a way of getting paid.