The NFT Standard will be the become the primary protocol for transacting Digital Art: Predictions for an industry-wide adoption
360 VR video and site-specific installation
2min22sec duration, looped
Ever since the Christie’s sale of Beeple’s The First 500 Days — for an astonishing $69 million — the NFT phenomenon has become a hot-bed of debate, too often in negative terms.
This veritable feeding frenzy overlooks the main point of the NFT revolution — for the first time, digital artists and artists working in time-based mediums can sell their artwork using a standard protocol.
Forget the hype — the art and creative industries should understand NFT technology purely as a means to sell digital assets.
These assets can be sold as unique pieces, or as editions. For the first time, we can put an edition number on a digital work, through the NFT, and track these editions (or unique pieces) as they are acquired and resold across the marketplace.
NFTs do not need to be sold through auction, which is how current NFT marketplaces attempt to create a sense of urgency amongst buyers and drive up prices. This all contributes to the hype surrounding NFTs, which is neither helpful for the industry nor for the artists and buyers. Not everyone is ready to enter a price driven competition — a purely speculative market.
The technological advantage of current NFT marketplaces is only temporary.
The current NFT marketplaces dealing in digital art simply “entered the game” with a technological advantage and placed their ultimate bet on digital content.
For these reasons, buyers and collectors will not show loyalty to the current NFT marketplaces, at least not in the same way they are loyal to certain gallerists and to the artists they collect.
Galleries are now entering the NFT market, bringing decades of experience and knowledge about how best to represent artists and ensure the longevity of their careers. Gallery participation will bring price stability and authenticity verification.
Power redistribution and technological adoption across the art industry is on the way.
We all understand the benefits of NFT technology — but it still has room to grow and will.
Now that blockchain and NFT technology have created a foundation through which to market, sell, and collect digital work — the established art industry needs to embrace this technology and get up to speed with educating collectors (and artists) about its potential.
The current file size restrictions on IPFS (InterPlanetary File System) are only temporary — there will soon be other decentralized (and centralised) solutions for storing files connected to the blockchain.
Technology providers are now building solutions to address and resolve storage capacity limitations for NFTs. Eventually, all will be able to choose how an asset should be stored.
And, now that the need for ecological sustainability in the NFT trade has been acknowledged and embraced, more are turning to chains that have a low carbon footprint — such as Polkadot and Flow.
All intermediaries will have the option to participate in the NFT renaissance.
Through NFTs and the burgeoning blockchain-backed digital art market, galleries and agents who represent artists will be able to contextualize and service both the artist and the client, thereby growing the business for everyone involved.
Everyone will have the opportunity to open an online store using the NFT standard.
As with webshops and e-commerce solutions, NFTs will soon be available to purchase through the websites of every brand, luxury label, etc.
Those who will prevail in this new dematerialized economy and digital marketplace are the ones with a sharp eye and understanding of their potential audiences — those with the ability to cater to this audience.
Content is king — especially in the art market.
Art that consistently gains value over time has certain undeniable qualities that ensure its appreciation. Artists creating such work also have certain qualities — an ability to innovate, to execute their vision, and maintain their studio production over decades. Art is a marathon, not a sprint. The long game is key. We are only at the beginning of the blockchain era.
NFT technology is still in its infancy.
Rather than obsess over the NFT hype, the PR stunts, the inflated prices, the volatile currencies, etc. — the art industry should acknowledge that blockchain and NFT tech is an emerging, inclusive and autopoetic network, where every participant can claim agency.
Soon every NFT will be available to buy/sell in both fiat and cryptocurrency. The markets and their underlying currencies will stabilize, become interchangeable, and comply with governmental regulators demanding transparency (and taxes).
The art industry needs to educate collectors on the significance of the NFT technological breakthrough, to ensure that artists ultimately benefit from the NFT revolution and open the gates for the growth of digital art collections.
The artist will not survive on speculation.
As art industry professionals, we understand that speculation is a double-edged sword. On the one-hand, it incentivizes certain market participants to stay in the network. On the other, it superficially inflates values of certain artworks (and artists) without providing a long-term basis for their commercial success.
When speculation drives up an artist’s profile and their prices, the crash can be swift and disastrous. Works set at these high prices at auction may fail to sell, and prices end up falling at hyper-speed — and the artist’s market is burned.
This speculation is what industry professionals — gallerists, dealers and various artist agents — are actively attempting to mitigate in their representation of artists and their respective markets. And there is a way to do so on the blockchain, while still leveraging the vast potential of blockchain by adopting the NFT standard.
The price of an NFT will be established by the artist, the seller, as well as market forces determined by consensus of that artist’s and gallery’s community.
Authors:
- Christina Steinbrecher-Pfandt, CEO Blockchain.art (BCA)
- Emilie Trice, Curatorial Advisor, Blockchain.art
Blockchain.art (BCA) is committed to creating a sustainable, ethical, and responsible digital art market via the NFT standard.
