Why NFTs will help digital art establish itself as the next major art movement.

Refik Anadol’s Infinity Room (source: Pinterest)

This article explores the role of NFTs in digital art (i.e. art made using computer software). Here, the term 'NFTs' stands for Non-Fungible Tokens: units of data stored on the blockchain that certify that an asset is unique and thus not interchangeable (non-fungible). NFTs can also be thought of as safe and transparent certificates of authenticity, but more on this later.

Artworks have been evolving rapidly over the last 50 years and are becoming increasingly hard to grasp. From Damien Hirst’s cow in formol to Wim Delvoye’s poo machine, viewers often lose track of the idea behind such works. Today, only a certain elite pretends to understand what this art movement is all about, while the masses have been left behind altogether.

Yet if there is one thing contemporary art has achieved, it is to open our minds and brains to new experiences, and new ways of seeing things. Maybe the often unintelligible contemporary artworks helped us prepare for something much bigger and much more significant? I believe we are about to enter an era where most artworks are digital, and NFTs will be the cornerstone of this era.

The transition has already started

To be sure, innovative artists are rapidly emerging, and it’s an absolute treat. Some of them combine traditional forms of art with digital tools (see Fewocious). Others are pushing the boundaries of virtual worlds and movies such as Mycah Johnson’s movie Aku. But this is only the beginning of a whole new world.

Fewocious’ “Year 4, Age 17 — His Name Is Victor” by Fewocious, recently sold for $475.000 (source: Christie’s)

Earlier this year, the NFT trend reached an important milestone with the sale of Beeple’s ‘Everydays: The First 5000 Days’ for $69.3M. This sale places Beeple among the top three most valuable living artists.

Beeple’s ‘Everydays: The First 5000 Days’ is a collection of digital pictures he created every day for 5000 days straight. (source: Christie’s)

Let's try and imagine what the future might hold

Let’s dream and try to project ourselves in a not-so-distant future. In a few years from now, artists will have access to a plethora of technologies that will immerse us in virtual experiences. Soon, artists will have the means to make us hear, feel, see and smell whole new things. Imagine being able to walk through Picasso’s La Guernica, interact with its characters, feel their distress, smell their tears, and even touch them. The possibilities at artists’ disposal will be truly boundless.

Refik Anadol’s Machine Hallucination is a crispy teaser of what we can expect from certain art installations in the future.

Machine Hallucination

NFTs’ crucial role in the adoption of digital art

Why are NFTs crucial here? Well, they help increase the safety and credibility of digital art (and other goods and services, such as diplomas, certificates of attendance and real estate). They help democratise digital art through three key features:

1. Security of ownership

As key information about these artworks is stored on the blockchain, they are immune to conventional forms of thefts. Indeed, the piece of art or the underlying file can be stolen, but as long as the blockchain is unaltered, the owner will always be able to claim the ownership. Hence, NFTs can also be thought of as a certificate of ownership/

2. Price transparency

All transactions are registered on the blockchain and everyone can access the blockchain. This ensures an unparalleled level of transparency. Artists are able to see for how much their pieces are bought. On top of that, they can also ensure that they get a certain amount of royalties every time one of their pieces is sold on the secondary market.

3. Liquid market

It is now easier to see which NFTs are on sale, and to bid on them. Any potential buyer can see which artworks are currently up for sale. Many NFTs are now directly sold through marketplaces such as Opensea and Rarible, or through their project’s platform (see Larvalab’s Crytpopunks and the Hashmasks).

Besides these technical aspects, NFTs have already helped boosting community building. If you want to learn more about the role of communities in generative art, I strongly recommend reading this article by Joel John. He explains how generative art projects like the Bored Ape Yacht Clubs have been able to build a tight-knit community of collectors. Such collectors are able to meet each other, showcase their collection, and benefit from many perks. Such perks include the option to lease out the copyrights linked to one’s NFT, receiving airdrops from projects linked to the original project, and being able to use your NFT as an avatar in virtual games.

In any case, this is a burgeoning ecosystem that will undoubtedly keep growing and renewing itself in the coming years.

Sotheby’s virtual gallery in Decentraland, which sold for $11.8 million in June (source: Reuters)

This is coming faster than you think

NFT sales boomed in 2021. DappRadar published an article on July 1st stating that the volume of NFT sales moved from about $100 million in 2020, to $2.5 billion for the first half of 2021 alone. If we assume the volume will remain the same for the second half of 2021, this would amount to a 5.000% year-on-year increase! Moreover, DappRadar only tracks on-chain transactions (transactions that were made using cryptocurrencies), which means the volume is probably larger. To be sure, NFT sales span beyond artworks, and also include NFTs related to the metaverse and gaming.

NFT soared in 2021 — these numbers do not include last week’s enormous spike in NFT sales volume (Source: DappRadar)

To put things into perspective, UBS and Art Basel reported more than $50 billion in art sales in 2020, down from $64.4 billion in 2019. This shows NFTs still have a lot of room to grow.

There is one caveat though, digital artworks do not always come in the form of an NFT, but both concepts are still closely intertwined. We’ve shown how NFTs are the ideal medium to confirm the authenticity and manage the ownership of digital artworks. Artists that produce such art will therefore increasingly rely on this useful technology.

A fertile ground for adoption

When it comes to the future adoption of digital art, I believe a fortuitous combination of push and pull factors will help boost it.

Push factors:

• Regular lockdowns in different parts of the world will encourage people to spend more time on their computer/ in the virtual world.
• Changing ways of working, such as videoconferencing and home offices, will blur the lines between the virtual and the “real” world.

Pull factors:

• Improving technologies and solutions will make videoconferencing, home workouts, online socialising much more seamless. Companies like Zwift already offer attractive workout solutions.
• Adoption by influencing personalities, which has already started. Jay-Z and Mike Tyson seem to be exploring the world of NFT collectibles, while the world-famous artist Damien Hirst just received 6 times the maximum number of applications for his latest project “The Currency”.

It goes without saying that new challenges will also arise - we’re in for a bumpy ride, but an extremely exciting one.