What is the deal with Crypto Art and NFTs?

Last week the art world was slapped in the face by Crypto Art when musician, Grimes, sold her digital work for almost $6 million in only 20 minutes online. In the same week Mike Winkelmann, also known as Beeple, sold a digital work for $6.6 million. All of this comes only a few days before Christie’s hosted the first-ever official auction house sale of online art, in which one of Beeple’s Crypto Artworks, Everydays: The First 5000, was sold.

To purchase these works one needs to buy an NFT (Non-Fungible-Token) specific to the work of art. NFTs derive from the world of online gaming, as a form of specified online currency. In the art world, the use of NFTs as a way to purchase Crypto Art creates a blockchain which states the transactional history of the work. This means that there is no physical ownership of the work, only digital. The question is are NFTs here to stay? Or is it a bubble that’s blown up too quickly, so set to burst? 

For those artists who work predominantly in digital art, NFTs are the perfect solution to the monetization problems that Crypto Art faced. NFTs revolutionises Crypto Art bringing its value up to compete with that of physical works of art. This is great news for crypto artists and for those who enjoy Crypto Art. As the market values increase means more demand and more opportunities for trade. 

My scepticism, however, is that the hype has exploded around Crypto Art and NFTs so swiftly that it is in danger of destroying itself. It makes me think of Zombie Formalism back in 2012. Due to quick purchasing rapid flipping soon after, Zombie Formalism reigned high in the market, but only for around 3 years before completely collapsing. 

For the moment Crypto Art has the intrigue and support of Christie’s. The validation from a major international auction house and their acceptance of NFTs have perhaps helped ignite the excitement. Making investing in Crypto Art via the purchase of an NFT less frightening to collectors and more of a contemporary market thrill ride.

The excitement is reaching extreme levels. We were all flabbergasted by Banksy’s self-destructing print back in 2018. But now, physical art is being destroyed to sell as NFTs. Last week the art world caught the attention of a group on Instagram called BurnBanksy who purchased the $33,000 work entitled Morons. They proceeded to burn the work and filmed it. The video was then auctioned off online on the 9th of March as an NFT. Here we have a direct digital vs physical comparison. Would a collector rather own a Banksy print to hang in their house? Or own a digital certificate to a video? 

Just like the half-destroyed Banksy of 2018 holds more value than it did before it was destroyed. It needs to be questioned whether the video will hold greater long-term value than the original print. Unlike the self-destructed Banksy, the video isn’t a physical object. I am led to believe that there would be more value in the future in the physical print than the video is going to hold.  

Essentially, like Zombie Formalism, it does not seem to be about the work, but about playing and manipulating the market. It can be argued back and forth for hours about whether Crypto Art constitutes as Art or not. Whether or not it is good or bad art. At the end of the day, in the present market, people are investing large sums for NFTs. The question is how long the will Crypto boom last.

Image Credit: ART