Why NFTs may be revolutionary for artists
A look at the opportunities that can emerge from a new system of neoplastic scarcity
By Lisa Botos
I will not waste time with a typically proffered primer on what an NFT is nor offer a well-worn tale of its magic in solving enduring art world concerns. What captures my attention and imagination is the promise of NFT technology as an innovative workhorse for artists, including those who work in the worlds of music, photography and film, in managing their intellectual property rights (IPR) over their creations. Eclipsing what has been the hottest question on everyone’s lips — “What is an NFT?” — is a more electrifying question: “What can’t an NFT be?” This rockets the mind into a stratosphere of creative possibilities — and by extension, market opportunities — while hinting that perhaps there are limits to the tokenisation of things, unaddressed by the hyperbolic and frenzied mania and money around NFTs. Yet questions of IPR should be a top priority for artists: undue risks, legal and regulatory obstacles, and current limitations in the technology as it is conceptualised and practised now should all be considered and scrutinised, particularly because organisations driving this rapid innovation often place their own commercial agendas before the artists’. Since every industry on this planet is studying NFT technology and its impact on their industry and clients, the diversity of dialogue, writing, podcasts and social media content provides raw material for artists to construct more nuanced pictures of the opportunities and risks involved with the current NFT landscape. Consuming media broadly, across industries, may also spark new artistic ideas and collaborative initiatives. Music and IPR law are two such industries with an active discourse on NFTs. Experts such as Massimo Sterpi, an international specialist in art law, IPR and new technologies, and Anil Dash, the CEO of the software company Glitch and an advocate for a more inclusive and ethical technology industry, are two excellent thinkers in this space.
So if NFTs are not, as claimed, a catchall solution for every IPR challenge, what significant value does NFT technology truly offer artists? The answer is two-part: 1) it presents a simplified technical solution to common IPR pain points by providing the beginnings of a standardised and streamlined framework in assigning certain rights of ownership and usage to third parties; and 2) the potential for alternative revenue streams, new and expanded collector bases, and innovative uses that were non-existent, too onerous or too expensive to be viable in the past.
Because an NFT-based system is a significantly more efficient mechanism to monetise all manner of creative production, entrepreneurial and venture capital investment in NFT infrastructure is exploding, accelerating innovation, growth and, hopefully, efficiencies in those systems and networks. This innovation is not only a consequence of the burgeoning possibilities of alternative revenue streams and innovative creation, it may also be revolutionary. But revolutionary how? The broad utility and relative low cost of such a simplified instrument of innovation, which can only be issued solely from one conceptual source — a blockchain — and one that encourages creative monetisation of any part of the artistic process, has fuelled adoption of a new technology at a rate that has never before existed. The NFT system opens up alternative ways, and new funding models, for an artist to realise projects. Consider, for instance, a proposed monumental public art installation. In order to fund the project, an edition of 1,000 digital renders of the proposed art installation could be sold to 1,000 buyers, who are now art collectors and have also become patrons, making the physical possible. As part of an NFT contract, as well as owning a digital asset that may increase in value once the public art installation is realised, the collectors could be acknowledged in the same way that traditional patrons are. This is but one very simple example of how this new system can be harnessed for opportunities.
NFT technology as a streamlined IPR-management tool is a useful advancement, but it’s not a game-changer. Creative Commons (CC), a non-profit global platform that provides creators with a standardised and accessible system to set the conditions for usage of their digital content and strengthen proper attribution, has been operating in this arena since 2001. Although their originating philosophies may not be aligned, the two systems are certainly complementary. The distinguishing feature of NFTs in this space is the ease with which bespoke terms can be crafted (in what is called a smart contract). It is the intrinsic flexible and expansive nature of blockchain technology (the wellspring of NFTs) to record and distribute information that engenders pioneering ideas and novel applications. I can envisage the two systems operating in a collaborative manner in the future — for instance, NFT technology could enable more nuanced and technically sophisticated versions of current CC licences. Both systems are valuable to, and valid in, the content-creation landscape.
Artists, artists everywhere
For the purpose of this piece, and writing as a contemporary art world professional, the “artist” designation refers to individuals for whom the desired or intended destination for their creative production is the contemporary art ecosystem, often through such primary vehicles as exhibitions, acquisitions, residencies and art awards. Notably irrelevant to this definition are the artist’s chosen medium and materials, as well as whether the artist is successfully practising and accepted within the established system yet. This leaves an intentionally broad interpretation, which seems appropriate for an industry in the process of recasting and expanding itself. It is important to note, though, that historically, artists working with certain novel or reproducible mediums have struggled to be accepted and collected by the art establishment due to an enduring mindset that undervalues mediums considered mechanical, infinitely reproducible and “commercial in nature”. NFT technology appears to be the most innovative development in rupturing a siloed art market and powering its expansion in accepted practices, new mediums and new collectors.
The ‘before time’
Up until March 11, 2021 (hint: the historic Christie’s NFT sale), the mainstream perspective of reproducible and digitally created art was that it was ubiquitous, so why would anyone desire or feel compelled to buy it?
Way back in 2008, I fielded such questions as co-founder of the art gallery Ooi Botos. Our stated mission was to be, “Hong Kong’s most avant-garde gallery focused on emerging and established contemporary photography, video, digital, multimedia and installation art”. My answer then (as now) was that it was the Certificate of Authenticity (COA) that accompanied each work of art acquired by a collector that established any authentic artwork as a tradable asset. COAs are bespoke, art-industry-acknowledged legal documents that assign ownership rights to a buyer for a stated unique or limited-edition artwork. I would explain that because the COA provided verifiable proof of ownership of an entity (even a dematerialised one), it fulfilled the universally agreed upon conditions to attribute market value. For the art market, a COA document functions as a basic primary market contract between the artist (and gallery) and the buyer of an artwork, serving as proof of provenance, authenticity and ownership. Preceding the advent of NFTs, the COA functioned as the essential qualifying factor enabling a limited-edition video or photograph, for instance, to become a financially valuable and tradable asset. NFTs may be the next-gen gold standard for COAs, advancing possibilities of more sophisticated applications with expanded utility and an increasingly frictionless process of information distribution and management due to the underlying blockchain technology from which NFTs are issued or “minted”, enabling a more supportive market environment for digital and non-traditional art forms. The inherent nature of blockchains as immutable and traceable ledgers, as compared with privately held, traded and potentially faked COA documents, is a primary factor in the increased public confidence in NFTs, particularly in the case of primary and secondary market acquisitions of important living artists’ works verifiably minted by the artist or a reputable gallery. Yet it remains that NFTs are deficient as a comprehensive solution for proof of authenticity and provenance. As an innovation, taking its rightful place among a suite of existing tools, it is powerful; however, from the point of view of best practice, NFTs cannot supplant all other instruments. Artory, a public digital registry for art, understands these principles and is purpose-built to be an independent and neutral platform to address these specific sets of issues directly.
NFT tectonics have altered formerly prevailing mindsets
Back in those early gallery days, I held the alternative view that the propagation of certain digital art images could have a positive impact on their market value. The argument went that the more an artwork was viewed, the more likely it was to enter our collective cultural consciousness with enhanced social and cultural value. That widespread digital circulation of a specific work of art functioned similarly to posters, postcards and PR, which was a good thing. Cultural validation of a widely seen creative work that only a select few could actually own would sustain or perhaps even increase its market value. In the 2000s, most collectors were seemingly unconvinced by this perspective.
Fast forward to the third decade of the new millennium, and visual art and all manner of cultural output have enveloped our contemporary world. Few on this planet would be able to convincingly argue that they have no knowledge of, or relationship with, expressive arts, particularly in the form of music or visual culture. Contemporary life is visually, sonically and experientially saturated with artistic content. Undeniably part of the fabric of our existence, for artists this reality demands new sustainable models and new modes of engagement that reflect the current position of cultural production in contemporary life. From a market perspective, the core of this reality necessitates the practice of neoplastic scarcity (or artificial scarcity) for a sustainable artistic sector.
For artists with dedicated representation, the gallery, among its many vital roles, skilfully promotes its artists while managing and protecting their production through structures of authentic and neoplastic scarcity, allowing them the freedom to experiment and engage with any material and medium in the service of creation and vision. For these artists, the extensive circulation and promotion of images has worked as it should, facilitating mass awareness and fostering desire, even elevating some artists to celebrity status. At the same time, these artists, cared for by their galleries, are benefiting from a rooted value system of scarcity, where only a select few collectors have the privilege to “buy in” to the ownership club, leaving the rest to covet and to aspire to such proprietorship.
For those artists without any advisory or gallery representation, NFT technology provides the mechanism for a relatively standardised system designed to engender neoplastic scarcity, and from which financial benefits could be realised, particularly for artists working in more challenging mediums. The expanded infrastructure of NFTs creates the conditions to unlock art markets and opportunities for artists outside the main art capitals too. That Luis Buenaventura II and other artists from the Philippines are getting global exposure and art-world cred via the NFT ecosystem as a portal into the mainstream during a pandemic is extraordinary. Buenaventura II and the illustrious Argentinian comic book artist Jose Delbo collaborated to make Satoshi The Creator — Genesis. The work, issued as 222 NFT editions earlier in 2021, generated a healthy sum of more than US$400,000 for the artists. The exercise illustrates the potential for new art networks and opportunities for artists on the periphery of established art capitals through the use of a common vehicle to enable monetisation of their labor. It also indicates a shifting mainstream mindset concerning paying for work that was once considered a large edition.
So, with the nearly US$70 million sale in March of a widely shared piece of digital art, this quizzical question of the ubiquity of images and its relationship with financial value became outmoded overnight. A new orthodoxy holds that the more a cultural creation circulates, the more influential and desirable it becomes. This is a welcome development for artists, who ideally shouldn’t have to consider their medium choices vis-à-vis the market or through the lens of scarcity, as neither are intrinsic to creativity. In fact, the market, in a strange twist, has led the way in radically crushing entrenched structural and mental barriers for such artistic mediums as digital photography, video and graphic design. It would be wise for artists fluent in these mediums to understand the seismic shifts in the art world and the broader cultural landscape and explore their new-found opportunities.
About the author
Lisa Botos is leading the development of a new MMBP & Associates lab focused on partnering with enterprises in digital transformation, content transcreation, market insights and experiences — based in Singapore, oriented to the world. A cultural strategist specialising in media and art, she is adept at viewing any challenge through a multiplicity of lenses. Lisa is infinitely curious and strongly believes that culture is an underutilized tool that when skilfully employed adds tangible value to any organisation.
About MMBP & Associates
MMBP & Associates is a creative consultancy that imbues brands with cultural capital. We believe that having an awareness of, and sensitivity to, societal shifts is crucial if innovation is to happen. We are reshaping worldviews by connecting local culture with a global audience.
Based in London and Seoul, MMBP & Associates collaborates with an international network of partners who value immersive, real-world analysis as the foundation for creative ventures. Directed by Hank Park and Julien Beaupré Ste-Marie, the company takes a holistic approach to brand design, working to detect potential business challenges while developing creative solutions.
