NFTs Open Doors for Artists to Speculate with Brand Design
You may or may not agree that holding the ownership of Jack Dorsey’s first tweet is worth $3 million, but there’s no denying that public hype surrounding the new market of digital collectibles is coat-tailing developments in cryptocurrencies and blockchain technology. With this development, new speculative opportunities are arising for artists that dabble in the digital.
As with all questions of what? and why?, the first is easily answerable, and the second provides unlimited fodder for writers well-adjusted to uncertainty. First-and-foremost, NFTs are digital assets that live on a blockchain. Adjustments to traditional crytpo technology lets these assets take on all kinds of forms, from images and videos to tweets. Because storage of these assets are decentralized on a blockchain, their ownership cannot be copied or faked. Thus, they constitute a market of verifiable items where, most notably, originals of digital objects can be traded. Well-known examples of such transactions include the auctioning of Jack Dorsey’s first tweet for $3 million, Beeple’s artwork for $69.4 million, and most recently, Grimes’s digital pieces for $6 million.
While decentralization technology clearly enables these new-age transactions, it is less clear why anyone would value the ownership (a notion of ownership altogether separate from copyright holding ) of digital artworks at these insane prices. We fall back into the classic problem of whether these digital assets provide the owner some real value, or whether value is solely imbued by a speculative market doomed to collapse.
While these considerations of value are important for the collectors of NFTS perhaps hoping to sell their precious collections later on, the creators of digital assets should not waste their time wondering. Selling NFT ownership of their works can only increase revenue for artists, complementing the money made by the means of traditional licensing. As we can see from these famous examples, this complementary money can be quite a lot.
So, where does speculation come into play for the artist? While the sales of Beeple and Grimes show NFT value stems at least in part from artistic excellence, Dorsey’s auctioning sheds light on another possible source of value: historical association with a significant brand.
Dorsey’s tweet may not be a work of digital art, and much of its monetary value may derive from alternative speculative forces. But other examples demonstrate the promise of payoff for artists that create masterpieces for the right brands at the right time. In the highly volatile market of cryptocurrencies, some artists are seeing a parallel between the success of crypto and the success of their fan art. Experimental digital art by MidnightOil depicting the Tezos logo traded last March for approximately $240. Digital pieces from the Ethereum, and Akash Network communities are listed for $68.4k and $2.3k respectively.
More established brands have also taken advantage of NFTs for marketing, sometimes selling limited originals for incredible sums of money. Taco bell, in support of a philanthropic initiative, sold a collection of 25 pieces in under 30 minutes, with one piece titled “Ever-Crunching Tacos” selling for a hefty sum of $3,646. One of those pieces is now on sale for over $18k. In this example, the seller of NFTs is the brand itself, but there remains promise for the brand design NFTs of community artists to catch on in the same way, as in our previous examples.
The best part for artists is that they have nothing to lose from NFTs, as NFT ownership is altogether separate from content ownership. Artists can still produce an income by traditional means — the growth of NFT markets simply creates the opportunity to make more. Digital creators today embark in an exciting new world of speculation where creation for the wrong brands costs nothing but creation for the right brands could pay off big time.