You can’t move on Clubhouse for people talking about NFTs, the latest crypto craze set to disrupt the art world. So WTF are NFTs, and why should you care about them?
Last week, Sotherby’s CEO Charles Stewart was part of a 90-minute chat with CEOs, founders, crypto lovers and artists talking excitedly about NFTs (non-fungible tokens) – unique digital content represented as tokens – that are bringing cryptocurrency to the masses. There’s lots of speculation about how they might revolutionise the art world and how creators can use them to make money from their digital work. The general vibe is critical of the elite art world, and hopeful the crypto art revolution might change things.
NFTs first came onto the scene in 2017 when Dapper Labs’ game CryptoKitties dominated the Ethereum network, with people spending over $1 million buying virtual cats. A cool way for people to get started on the platform.
Lately, the NFT market has exploded, with the estimated value of crypto art at $182 million according to cryptoart.io/data, and this is just a fraction of the NFT ecosystem. The NFT Report 2020 shows $250 million worth of sales (art, collectables, metaverses, utility, sports, gaming). Metaverses have the lion’s share – collective virtual reality spaces. If we can’t get out, we’ll build a parallel universe to live in and find community!
Nifty Gateway, SuperRare, Zora, and Foundation are leading platforms for creatives to monetise their digital artwork.
Most of the press coverage focuses on the commercial side and big money exchanging hands, but many smaller transactions are happening - it’s a growing movement.
• Last month net artist Beeple sold a piece of NFT artwork, CROSSROADS, for $6.6 million via Nifty Gateway ahead of the Christie’s auction of Everydays: The First 5000 Days – a monumental collage and the first purely digital artwork to come to auction. Current bid: USD $3 million with 10 days left to go.
• Chris Torres created a rainbow-streaming animation of Nyan Cat based on his cat, which sold for 300 ETH, $454,974,00 on Foundation.
• According to its creator Dapper Labs, the NBA Top Shot collectable crypto product has generated over $230 in gross sales. A Le Bron Jones clip from 2019 sold for $208,000.
I’ve been down the crypto rabbit hole this week to try and get my head around NFTs to see what I can do with them. Good overview here from Katie Haun, a general partner at Andreessen Horowitz, on the Dark Web, Gangs, Investigating Bitcoin, and The New Magic of “Nifties” (NFT), and blockchain trends to watch over the next 3-5 years…
WTF are NFTs?
NFTs (Non-fungible tokens) are unique digital items that can be owned and traded online. They make it possible for creators to keep ownership of their content without limiting the sharing of files across the net – giving creators an alternative to social media platform-driven monetisation. While most cryptocurrency is fungible – one bitcoin is worth the same as another, NFTs are non-fungible – like humans and unique on the blockchain so collectable (digital scarcity). You can own a piece of digital art and sell it like traditional art, and it’s trackable on the blockchain.
What’s cool is that if you sell a piece of work, the artist gets a cut of future transactions – no intermediary is taking an amount – it’s a direct relationship between artist and buyer – a shift towards the ownership economy, which empowers the creator.
Are NFTs the future of art or a fad? I don’t know, but it feels like we’re on the verge of something big – the money exchanging hands is mind-boggling, and the art world is ripe for disruption. As books have gone digital with Kindle & Audible and music and film with Netflix & Spotify, it makes sense that artwork and physical collectables will follow the same trajectory. We know the case use today for NFTs but not tomorrow. What future transactions will come? The launch of the iPhone in 2007 has led to Uber, ride-sharing, and the gig economy.
Beeple sells NFTs that represent his EVERYDAYS with a digital frame as a physical representation of the NFT and will give collectors a spot on his site to post a message.
Crypto trends over the next 3-5 years
• Mobile payments will be huge – Celo.org is a mobile-first Defi open-source platform built on blockchain. You can transfer money on your mobile, and you don’t need a bank account.
• Content creators – Rally.io Creator Coin (one of Andreessen Horowitz’ products) Create your own branded cryptocurrency, sell your work and provide community benefits and incentives for your followers.
• Countries creating cryptocurrencies – China has made a payment system known as Digital Currency Electronic Payment (DCEP), a digital version of China’s official currency, the yuan, which crypto pioneer Chandler Guo believes will become the dominant global currency.
How Creators can use Crypto – Rally’s Creator Coin
Last week, I was in a room with @Mvellank, the co-founder of Rally.io, talking about their new Creator Coin and how NFTs are a viable path for creators to sell work and build community. They aim to give you the tools to create a virtual economy to extend your brand while providing community benefits & incentives for your fans – a tokenised economy. They’ve built a business model that “transcends the big tech platforms” to support the creator.
Someone in the room mentioned ArtCoins as another example of e-commerce innovation – a new digital cryptocurrency based on smart contracts and used for art trading, exhibition fees, curation rewards, art dividends, art profits & more.
Blockchain is hugely exciting, and it’s great to see it used to help artists and creators monetise digital work and reach a new audience globally. What excites me, though, is how we can use it as a force for change – as with Celo’s mobile wallet – to empower children and adults in developing countries to create work and sell it online as a means to pay for education rather than doing manual labour. CryptoWendy is keeping it real and has lots to say on this subject. She has put her daughter’s savings into Bitcoin and got into it as a peaceful protest against inequality.
Bitcoin was created by the people for the people and born out of the 2008 economic crash as a new kind of money. I expect we’ll see something similar with NFTs post-pandemic. They have made crypto more accessible for people and given power back to the creatives. As Jessie Walden says:
NFTs will become the port of entry to all internet media because everyone involved can make more money from the markets they enable.
Mark Cuban says digital assets are the future of business, and Chandler Guo, the crypto pioneer, believes digital currencies represent the future of money.
The downsides of NFTs are the network fees or ‘gas’, which can fluctuate and make it expensive to trade, and most NFTs live on the Ethereum blockchain, which has a huge carbon footprint. Companies are working on it and we’ll see solutions. We might have to have energy inefficiencies now to push the boundaries, build a new art world, and solve real-world problems if we can.
As remote work becomes the norm, we’re going to be looking for virtual spaces and experiences offering richer, intense and diverse social interactions – places to learn and grow together with people who have similar interests. NFTs are a gateway…
Everydays: The First 5000 Days – what a project! Beeple has created a piece of digital artwork every day for the last 13 ½ years. Imagine the level of detail! I need to psychologically prepare myself for that - it feels a bit like Hieronymus Bosch for the digital world. Great to see the evolution of his career – recurrent themes include our obsession with and fear of technology, the desire for and resentment of wealth, and America’s recent political turbulence.
Isn’t it amazing that we can create something at home, sell it online and get paid instantly – all without leaving the house. 🙏
The advice 🤔
Sacred Economics traces the history of money from ancient gift economies to modern capitalism, revealing how the money system has contributed to alienation, competition, and scarcity, destroyed community, and necessitated endless growth.
If there’s no gift, there’s no community. Charles Eisenstein.