TAITMAIL A non-fungible silver lining

The search for a silver lining in this coronavirus shitstorm has been depressingly disappointing, but there has been one gleam for our sector, particularly for the visual arts: digital technology.

Personally, it’s kept us in touch, maintained friendships, introduced us to new entertainment. Wider, museums and galleries have been able to transform their proposed exhibitions into online shows and kept contact with their audiences, while commercial galleries have ramped up the quality of their digital sales programmes and artists have been able to reach a clientele they didn’t know they could.

In fact, the ways in which we get our art will never be the same again with even traditional physical presentations changing in the light of brand new technology and the ways in which we have been able to embrace it in the last year. This week Artfinder, the online art marketplace, announced a 145% increase in trading for this year's first quarter with the average order up 19%.

But the traditional gatekeepers of art globally - the major museums, big gallerists, rich collectors - have retained their hegemony over the art market because they control the money, so that reaching a wider public is still in their gift. Or was, because as much as in high street shops, money may be a thing of the past in trading online art.

The thrilling new development is called the non-fungible token, or NFT.

NFTs, as the Stellar International Art Foundation’s Anya Zakharova explained in AI this week, are a digital asset, a bit like cryptocurrencies such as bitcoin, which (and this is getting dangerously technical for me) exist on a blockchain which is a kind of certifying incorruptibly secure public account book, providing proof of ownership (there are several o these ledgers with such names as Etherium, Flow and Tezos). You can exchange bitcoins like virtual money, so they a fungible. NFTs are unique, you can’t interchange them, so that they are non-fungible. NFTs can represent online works of art such as photographs, videos and audio files which can retain their intrinsic value. Still with me? Hang on in there, this is where it starts to get interesting.

NFTs, which began in around 2012 as a bitcoin development called Colored Coins, have had a sudden surge in popularity so that in 2020 the NFT market value tripled to more than $250m. It was announced this week that a company called NFT Investments, “the world’s first pure-play investment company specialising in NFTs”, is launching on the stock market with a capitalisation of £50m.

Digital art is nothing new, been around since the 60s, but because whatever appeared was immediately copyable it was always regarded as one step up from screen doodling, something to keep the kiddies occupied while the grown-ups get on with making money trading tangible art works.

Blockchain technology can now give digital art a unique signature, which makes it easy to deal in outside the traditional parameters. And so suddenly, with NFTs ensuring this art could not be duplicated, the grown-ups have smelled the coffee. Last month an American digital artist called Mike Winkelmann, who specialises in creating comical phantasmagoria online and rejoices in the digital tag of Beeple, sold a piece called Everydays: the First 5000 Days for $69,346,250, the third most valuable work of art by a living artist.

It was the first NFT to be sold by Christie’s, so there’s a market now which even has a whole new digital art movement, CryptoArt, and next month Christie’s is going for it again with the sale of nine CryptoPunks (see my picture). You can argue about the quality of this stuff and whether it’s art or not, but Christie’s are putting it up alongside works by Warhol and Basquiat. CryptoPunks are 10,000 digitally generated characters produced by a collective called Larva Labs, and just nine of them are going under the hammer this time with an estimate of $7m to $9m (for the nine). Christie’s postwar and contemporary art specialist says they are “the alpha and omega of the CryptoArt movement”.

Proponents of NFTs says they are the democratising of the art market, ushering in a new age of inclusivity made possible by the digital media, and they may be right. The enormous costs of shipping, customs clearance, storage and courier fees disappear instantly, not to mention the carbon footprint of the air and road travel involved. Sections that feel barred from the conventional market system, like black people, the LGBTQ+ community, women, and almost any artist that hasn’t yet developed a recognisable reputation, may think that they are getting a look in at last. 

But there are dangers. In one respect, NFTs are no different to bitcoins in that nobody knows for sure what it is that they’re buying because neither NFTs nor blockchains have been tested at law. Not yet, and that may be why some auction houses are resisting these digital newbies. 

And while another discernible plus of the last year or so is the awareness of carbon footprints thanks to the halting of airline travel and President Biden putting the carbon challenge at the front of his agenda, there’s an environmental cost here. Blockchains are essential to making NFTs work, and they require computation-heavy processes with the kind of high energy inputs that are contributing to global warming. The NFT market could add to the carbon footprint, not subtract from it.

That’s not all. As we all know to our cost, systems fail constantly and the digital details of where the NFT-protected art is stored could disappear irretrievably, and they are susceptible to hacking. And while you can buy an NFT representing a work of art, you might not be buying copyright privileges with it, so that the vendor would be entitled to make as many more NFTs of the work as they like. An NFT is only proof of ownership.

Younger artists might find the NFT world easy to negotiate, but in the spirit of diversity and openness there needs to be training. Who will do that? And there will have to be digital platforms where artists can strut their digital stuff, who will set that up?

And who will ensure that the old market system clouds will not close up and spoil the blue skies NFTs appear to represent?

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