NFTs will remake the digital art world

“In four weeks I’ve gone from not knowing what this is to seeing people minting garbage images. And who is paying who with what?”
(Dawson, as quoted by Kois, 2021)

This essay will evaluate the impact of emerging NFT technology on artists, the art market and the art being produced in relation to NFTs.
In March, Spike magazine editor and art critic Dean Kissick compared the booming NFT market to “Etsy for guys” (2021). Kissick extends the metaphor to describe the creation of a “unique little thing” which is then “assigned an arbitrary value”. It’s an astute observation to make. An NFT, or non-fungible token, is a unique and non interchangeable piece of data stored on the blockchain- a digital, publicly visible ledger used to record ownership and transaction of cryptocurrency. (Dean, 2021). An NFT acts like a certificate of ownership,rather than any physical, tangible item. NFTs can be associated with unique digital items- video or music files, jpegs or other assets.
NFTs originated in 2015 on the Ethereum blockchain (the primary cryptocurrency used to trade NFTs) however they exploded in value and popularity in 2021. Andrei Pesic, an art history professor at Stanford, attributed this increased popularity to the transformative effects of the coronavirus lockdown:

“In the years of 2020 and 2021, as we have so weirdly and radically had to move much of our lives online, it has opened up or accelerated the process of valuing digital goods in a similar way that we value physical goods”
(As quoted by Paul, 2021)

It’s easy to imagine that in an era of online school, shopping, work and dating, borders between the virtual and real, are being eroded and reformed. We live in the age of the digital rental economy- renting music through Spotify and TV and movies through Netflix (Atkins, 2021). In a Guardian piece, Irish artist Kevin Abosch called the desire to “hold something in your hand” a very “old-world idea” that younger generations don’t have as much difficulty sacrificing. Perhaps a generation who came of age in the subscription economy understand that the “intangible and immaterial” have value (Absoch, as quoted by Paul, 2021). It has been suggested that NFTs could provide a future alternative to current ownership transactions- NFTs utilise “Smart Contracts” in place of lawyers and escrow accounts securely guarantee that money and assets change hands, and that both parties honour their agreements (Bowden, Thomas Jones, 2021). With the rise of an increasingly virtual life marked by the encroachment of digital spaces and technologies like VR Chat, it seems likely that the goods and services we might purchase in that realm could take the form of NFTs, cutting out the traditional middleman. (Bowden, Thomas Jones, 2021)

In this sense, NFTs provide a logical continuation to the question of ownership in a digital age, and in particular the transfer of art as an asset. The line between art and capital has always been blurry- the money lending Medici family fuelled the Renaissance, after all (Cohen, 2013). The entanglement between art, prestige and wealth runs deep. James Rushing Daniel Art asserts that art has “historically functioned as a site of patronage, an asset class and a marker of social stratification”, noting exceptions such as folk and outsider art. The contemporary art market is deeply enmeshed with the financial world- Rushing-Daniel makes the point that the majority of recent art world news has been surrounding the climbing prices at which artworks are sold- Damien Hirst’s For the Love of God, for example, which was bought in 2007 by a private group (Including Hirst) for $100 million (Rushing-Daniel, 2021). Art has come to be considered a valuable and sensible asset class. A 2011 report by investment firm, Deloitte, argues that art investments fulfil a number of valuable roles for the trader including hedging against inflation and currency devaluation, favourable tax treatment, and geographical flexibility (Torcello, 2011). In the period of financial liquidity since the 2008 crisis art has remained a relatively stable asset (Charlesworth, 2021). The UBS Global Art Market Report documents the rise in art sales from $57 billion in 2010 to $64.1billion in 2019. Charlesworth further notes widespread speculation on the role of ‘quantitative easing’ in sustaining the stock market and wealthy investors, as banks printed money to tide over the economy during the recession, inflating wealth into asset bubbles and leaving tangible economies to stagnate (2021).
Analogously, billions have been minted to support economies suffering in the wake of the coronavirus crisis, leaving interest for fiat currencies at extremely low rates. Cryptocurrency and other unconventional investment forms are rising in popularity, perhaps in tandem with this downward trend in traditional investment value (Charlesworth, 2021)

Art, it has been suggested, has been reduced to “a financial instrument with a pretty face.” (Herbert, as quoted by Rushing-Daniel, 2021). Many artworks bought at auction are relegated to freeports, or other extra-legal or favourable tax zones, doomed to sit in storage and transfer ownership from one investor to another without ever moving- essentially becoming a kind of bank for artwork (O’Dwyer, 2018). In this manner, the physical and economic form of the artwork are divided- “art is abstracted from any intrinsic connection to artistry, commentary, or labour” (Rushing-Daniel, 2021).
NFTs have been criticised by some as accelerating this process. The sale of NFTs is quick, frictionless and self actualizing, allowing individual works to be rapidly flipped.Rushing Daniel characterises this culture as
“art[..] reduced to mere value. Nfts, while retaining the positive associations of class and style associated with art, are really nothing more than assets with an associated JPEG, transforming art into the frictionless commodity that capitalists always wanted” (2021)
Commentating on the sale of Celestial Cyber Dimension (Guile Twardowski), an early NFT which sold for $140k in 2018, Rachel O’Dwyer notes that the formalised distance between art as money and art as an asset is narrowing rapidly:
“...there isn’t any valuable ‘thing’ that’s getting in our way[...]The ERC token slips back and forth between art and money and manages to be both at the same time” (2018)
Many critics of the growing NFT market see the explosive popularity as a bubble, fuelled by the desire of nouveau riche cryptocurrency day traders seeking to rapidly buy and flip artworks, with little regard for the work itself. Alex Ramírez-Mallis, a 36 year old Brooklyn man who sold a recordings of his farts as NFTs says that:
“In many ways, this is a bubble, but it’s also been around forever[...] Buying and selling art purely as a commodity to store value in has been around for centurie, and NFTs are just a digital way of representing that transactional nature of art” (As quoted by Frishberg, 2021)

Many perceive the art world as falsely disavowing its own complicity in financial machinations- In a 2018 piece Art Won’t Save Us, And Khachiyan describes artists as characterising themselves as rebels and outsiders while art itself remains “a prestige economy of the free market- a glitzy barnacle on the side of global finance”. Many observers have pointed out that in the traditional art world, auctioneers, traders and other players are free to reap the benefits of art’s sale, while artists must maintain the pretence of immunity from capitalism- to not be seen to “shill themselves” (Kissick, 2021).
If NFTs represent a world where art is a bare commodity, an “avatar for value” (Ramírez-Mallis, as quoted by Fishberg, 2021), perhaps this is of benefit to artists and creators. Kevin Abosch, an early adopter of blockchain technology, advocates for NFTs on this basis of their democratizing nature- the fact that anyone can purchase an NFT, and that its entire financial history is in the public domain distinguishes the NFT market from the brick-and-mortar art world, where Abosch bemoans investors privately stockpiling art until it’s more valuable to sell (As quoted by Paul, 2021). NFT smart contracts also allow the creator to add stipulations such as royalties with each sale, meaning that unlike traditional art sales where the initial purchase represents all of the profit the artist will make, the rapid flipping of NFTs can be of financial benefit to the creator as they continue to reap rewards throughout the work’s financial life.
How do you claim ownership of something like a digital asset, which can be easily and infinitely duplicated? In the early days of the web, this democracy of peer to peer sharing was embraced, with sites like Napster for mp3 sharing, and The Pirate Bay for torrenting seeing widespread popularity and use (Harris, 2019). The tide seems to have turned however, with a crackdown on digital rights management across the web. The early utopian dream of a post-scarcity space seems to have been cast aside. Minting an NFT provides scarcity, and therefore economic value, to something that is theoretically endlessly replicable, concreting the concept of ownership of art as a currency. The signing of H.R.3684 into U.S law means NFTs are now regarded as cash and are taxed accordingly. (Rushing-Daniel, 2021). Cybersecurity expert Edward Snowden has been vocally critical of the artificial scarcity NFTs enforce in virtual gaming spaces:
“We have people that are trying to [inject] an artificial sense of scarcity into a post-scarcity domain,[...] I think the community should very much be trying to bend the arc of development away from injecting artificial, unnecessary scarcity entirely for the benefit of some investor class”
(As quoted by Ravi, 2021)
Mike Winklemann, or Beeple, has been a huge force in the legitimisation of NFTs as a viable enterprise. His digital collage of 5,000 images, EVERYDAYS: THE FIRST 5000 DAYS, fetched $69,346,250 at auction in March 2021. While Beeple has spoken of the NFT rise as “the next chapter of art history”, and a way to “collect digital art” (Paul, 2021), he’s also reluctant to brand himself as a ‘crypto purist’. Winklemann, upon receiving $53 million worth of Ethereum, the cryptocurrency in which EVERYDAYS[...] was purchased, immediately converted his earnings into fiat currency (Chayka, 2021). In conversation with Fox News Sunday, he had no reluctance in admitting that the astronomical NFT prices of the period were “absolutely [...] a bubble, to be quite honest”, but that “the technology itself is strong enough” to outlive any temporary crash.
Despite his hesitancy to entirely embrace the world of blockchain, the success of artists like Beeple and Abosch (who appears more wholehearted in his advocacy of blockchain technology for art), is an exception rather than the rule. Kimberly Parker, writing for Medium, collected data on OpenSea, one of the biggest NFT platforms. Her data showed that 33.6% of NFT ‘Primary Sales’ were $100 or less, and that 67.6% of NFTs have not had a Secondary sale; meaning that the smart contract royalty system which NFTs have been praised for has by-in-large not been enacted (2021). Parker concludes that an “acutely miniscule number of artists” are making “a vast amount of wealth off a small number of sales”, leaving the bulk artists with nothing but a “dream of immense profit that is vastly exaggerated”. A similar study by Sparrow Read and Massimo Franceschet on the platform SuperRare found that as of June 15th, 2021, 80% of the platform’s sale volume was dominated by 15% of the richest sellers. (As quoted by Chow, 2021). It has been suggested that the NFT market, and cryptocurrency in general, is failing to live up to the egalitarian economic promises built into its decentralized structure, and is instead emulating the structures of the traditional market to an accelerated degree. Many see the blockchain as dominated by “Tech bros”- “White, heteronormative men with an evangelic, libertarian spirit [...] the generation that an unregulated silicon valley has created” (Broomberg, as quoted by Shaw, 2021), who seek to invest in artists who create works that mirror their own interests- “shrines to cryptocurrency champion Elon Musk, 3-D emojis, mimicry of brand signifiers like Gucci or Marvel” and “concptual gimmicks like a $1.3 million single pixel” (Chow, 2021).
As Parker pessimistically concludes at the end of her Medium article, the trends that are emerging in cryptocurrency market trends are nothing new:
“Despite the promises of revolution, equality, and ‘lifting artists up’ this technology has changed nothing: the few people at the top continue to have the greatest amount of wealth. This is true of all technology, blockchain or otherwise. Decentralization does not mean equality of opportunity” (2021)
This sentiment is echoed in the words of Sparrow Read, the co-creator of the SuperRare data study:
“Everyone believes that everyone’s intentions were to create more equality, more opportunity for artists, [...] It feels like nobody wants to say that we are not achieving that” (As quoted by Chow, 2021)

While the criticism of NFTs as nothing more than a cash grab is widespread, there has been a great deal of discourse over the quality of art sold as NFTs. In a scathing review of NFT artwork for Spike Magazine, Dean Kissick says that “Lately artworks have begun to look like memes, while memes have begun to look more like artworks”, proposing that the majority of popular culture has been reduced to “poor-quality remakes of something better and more compelling”. Of Beeple’s EVERYDAYS, Kissick describes “images of images”:
“mediaevalesque scenes of pop culture gargoyles and demonic politicians with mutating cyborg bodies[...]the collective hallucinatory firmament in which tired art, recycled pop, bad taste, political spectacle, and hyper-speculation swirl and coalesce into modern life” (2021)
Shanti Elcalante-De Mattei writes of the spillage of “the algorithm” into real life and culture, the pertinent accellerationism that seems to characterise modern life, and especially life under the coronavirus pandemic. De Mettei quotes Kissick:
“we want too much content, too fast, and it just leads to this endless algorithmic churning, this paint-by-numbers effect. You see it in art. In Netflix documentaries. Spotify playlists. Op-ed pages. The news. The latest manufactured outrage. Well-reviewed first-person novels about nothing. All so dreadfully banal and repetitive.” (2021)
The most popular NFTs are made by algorithm- Beeple works in a studio with both CNN and Fox news playing simultaneously on two sixty-five inch televisions (Chayka, 2021) producing a digital painting every single day, often depicting contemporary memes, events and politics. In his work, it can be suggested that he distills the output of news and social media algorithms into a digital painting, produced at a breakneck rate. NFT profile picture projects automate this process of algorithmic determination. Works such as CryptoPunks and Bored Ape Yacht Club (Fig.1) utilise a set of predetermined character assets which are assorted randomly together, creating a unique character which can be purchased and displayed as the buyer’s profile picture. (Escalante-De Mattei, 2021).
If an algorithmically-generated NFT project is successful, it obviously represents huge income for the creator, with very little effort past its initial creation. “The line between manufactured collectibles and unique art works has almost completely collapsed” (Escalante-De Mattei, 2021). James Rushing-Daniel, writing about the commercialization of the art world says that the role of the creator of these projects is less like that of an artist, and “something more like an asset manager”(2021).

Fig.1- An example of a Bored Ape Club NFT (2021)
While many critics deem NFT artwork to be mass produced “poor images” (Kissick, 2021) which serve as a cash grab for those who can afford it, it is clear that the democratization of art as a tool for “capitalist appropriation”(Rushing-Daniel, 2021) is here to stay. Tyler Hobbs, a creator who has produced algorithmically generated NFT work defends these mass produced works, saying:
“The bulk of our lives [is] moving into digital environments, which are of course constructed with algorithms. Should artists strain to avoid these algorithms? No, we’re better off claiming them for ourselves.” (As quoted by Escalante-De Mattei, 2021)
It seems as though in this frenzied cultural moment of digitization, financial liquidity and precarity, everything is accelerating. Wealth is flowing upwards at unprecedented rates (Zhang, 2021), and there is a widespread scramble for everyone to “claim[...] for themselves”- For artists to get their cut, for buyers to reap rewards from flipping work, for auction houses to cash in on an economic bubble. The old world bourgeoise are becoming wealthier, along with a new class of nouveau riche cryptocurrency millionaires who appear to mirror the same demographics as their predecessors. NFTs may remake the digital art world, but as Parker says; in their current incarnation they appear to be “victim factories” (2021). She raises the “inescapable cashflow question” proposed by Stephen Diel:
“Where will all the money come from to pay out all these new paper bitcoin millionaires? The answer is simple: they need it to come from you”
(As quoted by Parker, 2021)
While many hold out hope for a bright, democratic future of wealth redistribution, the current prognosis appears bleak. NFTs represent a leaching and encroachment of traditional detrimental capitalistic structures into a new digital space- “NFTs are not art’s future, but its past” (Phipps, 2021).



BIBLIOGRAPHY
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Image bibliography
Example of a Bored Ape NFT, from the BAYC website (https://boredapeyachtclub.com/#/home)