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It’s an artist’s job to push the boundaries. If it makes people stop and stare and ask the proverbial question, “But is it art?” you can bet that whatever it is – no matter how outrageous – has just sold for millions.
Think of Damien Hirst’s shark in formaldehyde, Andy Warhol’s soup cans and all those over-the-top abstracts that look like they could have been plucked off the wall of a kindergarten class.
But many think a piece of art which recently sold for $69 million (over R1 billion) on auction at Christie’s in New York make all these other works seem decidedly run-of-the-mill.
At least the people who bought Hirst’s shark or Warhol’s soup got something to take home with them. But the mystery bidder who recently forked out for Everydays – The First 5000 Days, done by relatively unknown US artist Beeple, got nothing. Other than a digital token to show ownership and a link where the work can be viewed online, that is.
Beeple, a 39-year-old graphic designer whose real name is Mike Winkelmann, created a montage of 5 000 small images he posted on the web every day since 2007. If you Google it you’ll you find it online – there for everyone to enjoy.
And yet the new owner, Vignesh Sundaresan, a Singapore-based financier, believes he got “a steal” and has described it as “the most valuable piece of art for this generation”.
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“It will one day be worth $1 billion (R15bn),” he predicts.
And there are many art experts who think he may be right.
The recent sale set a new world record for a price paid for digital art. It resulted in Winkelmann, who before this earned a living designing concert visuals for pop stars like Katy Perry and Justin Bieber, entering the ranks of the top three most valuable living artists (behind only painter David Hockney and sculptor Jeff Koons).
Some people are seeing it as proof that the world has gone mad but many artists are viewing it as a licence to print money and are releasing all manner of things digital, including drawings, animated GIFs, songs, items in video games and even tweets, as crypto art.
We take a look at the new trend that’s shaking up the art world.
HOW IT STARTED
Like almost everything on the internet, it can be explained with the help of cats. In 2017 a website called CryptoKitties gave visitors the chance to buy virtual cats. And buy cats they did – within days the site has raked in more than $1 million (then R13 million).
What made the site so enticing was its use of a secure record known as a non-fungible tokens (NFTs) to identify each individual cat and its owner. This allowed buyers to sell on their cats at a profit.
In a nutshell, an NFT is an electronic entry on a blockchain – which is an ultra-secure decentralised digital ledger technology that underpins cryptocurrencies like Bitcoin. Essentially it’s like a virtual certificate that’s recognised in a virtual world but that has real-world value when you buy or sell that certificate to someone else. It’s a bit like the virtual equivalent of handing over the papers to your car or house.
But whereas Bitcoin is fungible in that one coin is essentially indistinguishable from another and equivalent in value – NFTs are non-fungible. That means they are unique, so they can represent one-of-a-kind things like artworks and CryptoKitties.
And this is proving to be a game changer.
Whereas previously it was impossible to monetise digital works because they were so easy to duplicate, assigning NFTs to art instantly transforms it into a traceable asset with a publicly listed price and complete back history of when it was created, who has owned it and where the original can be downloaded.
What NFTs essentially do is lend authenticity to digital artworks – it shows they are genuine and who owns them. And it also means that if you own them, you can sell them on.
HOW DO YOU BUY THEM?
Artists who want to sell their work as NFTs have to “mint” digital tokens by uploading and validating their information on a blockchain – the one that is mostly used is the Ethereum blockchain, which is a rival cryptocurrency platform to Bitcoin.
They can then list their artworks online at marketplaces such as OpenSea, Mintable, Nifty Gateway and Rarible and buyers can purchase the tokens to prove ownership.
Prices start at a few dollars and go up to millions. Many sites require payment using ether (the Ethereum currency).
Once the transaction goes through you will receive your NFT which you can store in your digital wallet as proof of ownership.
But if the digital file is available online other people can download it as many times as they want. All you’re buying is ownership of the work – much like if you bought a physical painting by Monet, there will still be prints available of the work elsewhere.
WHY DO THEY SELL FOR SUCH CRAZY AMOUNTS?
There’s a lot of interest in NFTs because of the novelty value of its form and how it’s sold and many investors hope that because it’s so closely tied to cryptocurrency its value will rocket.
For instance another work by Beeple, a 10-second digital animation titled Crossroad, was bought for $66 666 (R990 000) late last year. Four months later it sold for $6,6 million (R99 million), so 100 times the original price.
But investors also have the potential to lose on a grand scale. At the time of going to print one ether was selling for around $1 594 (R23 190) but early in March its value had plummeted to $241 (R3 615).
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IS IT JUST A FAD?
Although $200 million (R3 billion) worth of NFT sales went through in the past month alone the jury is out about what the future holds.
Even Beeple himself has his doubts.
“I absolutely think it’s a bubble," he said following his record sale, comparing the NFT craze to the early days of the internet.
And he was taking no chances. As soon as he received his proceeds from the sale – $53 million (R795 million) worth of Ethereum (after auction fees) – he converted it into good, old-fashioned cash.
“I’m not remotely a crypto-purist. I was making digital art long before any of this sh*t, and if all went away tomorrow I would still be making digital art,” he says.
Home on Mars A “digital home” designed by Toronto artist Krista Kim, set within a Mars-like landscape, sold for $500 000 (R7,5 million) last month. The new owner will receive a 3D digital file of their virtual mansion.
Gucci shoes The fashion label’s shoes are generally out of most people’s price range, but there’s been much interest in its new line of digital footwear which retails for about $12 (R180). You won’t be able to wear them in real life. Instead you can use an app to apply them to your social media pics and other web avatars.
All-a-Twitter Last month Jack Dorsey, the co-founder of Twitter, took the first tweet he ever sent – a post which read: “Just setting up my twttr” – and sold it as an NFT making a cool $2,9 million (R43,5 million), which he donated to charity.
SOURCES: GUARDIAN.CO.UK, THEVERGE.COM, WIRED.COM, CNET.COM, WASHINGTONPOST.COM
