Tokenized Digital Art is the Newest Experiment of Blockchain Tech
Digital art pieces sold as ‘non-fungible tokens’ are shaking up the art world
The so-called ‘art world’ has always carried a prestigious mystique in its name’s connotation, implying the presence of an elite group of nobles, distinguished from the rest in their superior ability of commenting upon fine art. For the select few allowed into the group, purchasing art is simply a diversification of their investment portfolio — an estate they can enjoy for decades, then sell at 500% returns. For the rest of us with portfolios too meager to afford six-figure paintings, such a lucrative form of investment is off the table, especially when one considers the added costs of maintaining and displaying fine art.
Thankfully, developers of decentralized applications on the Ethereum blockchain have recently enabled the tokenization of digital art and other collectible virtual items. In the same way that cryptocurrencies have value despite no real, physical backing, digital art tokens have already begun fetching enormous sums on the market. With this technology, artists can tokenize one-of-a-kind digital art pieces with verifiable authenticity and list them for sale. Unlike physical art collecting, artists can choose to receive a commission every time their art is sold amongst collectors. Digital creators of GIFs and other animated works now have a method of selling these pieces as though they were physical pieces of art. Animators could previously find revenue only in contracted gig work, career animation, or independent film projects. Now they can sell individual pieces of animation directly to fans and collectors. This will inspire a movement of new digital art created by some of the world’s finest digital artists. Career animators and 3D game designers will now be incentivized to create unique art pieces, and perhaps make more money in their side hustle.
Beeple, a popular digital artist known for his daily creations, set records with a $777,777.77 sale of a small selection of these pieces. Many other pieces of his have sold for more than one hundred thousand dollars. Although Beeple is at the top of the crypto art game, many other artists have carved out niches with GIFs and 3D models demanding tens of thousands of dollars each. Markets such as MakersPlace are selective in approving artists, but have a series feature where artists can sell their piece in a limited run of ten or more ‘prints.’ Like physical prints, first editions are worth more.
A common pushback to the concept of crypto art is the argument that the buyer doesn’t actually receive ‘anything of value’. This argument actually begs at much deeper philosophical topics regarding what we consider ‘valuable.’ Humans are inherently irrational beings. We value things that are rare because we like to have things others do not. Money is valuable simply because it is rare, and the same goes for diamonds, designer brands, food, etc. It is a simple equation of economics: supply and demand. Van Gogh paintings are expensive because there hasn’t been a new one since his death in 1890, thus they are rare and hard to come by. In the same way, digital artists create rarity when they tokenize pieces on the blockchain. The act of tokenization — a digital signature by the artist’s wallet — verifies its origin and originality. Buyers can then purchase the piece with confidence that it is the only one that will be made, or the first edition in the only series.
When buyers purchase a new piece of digital art, it is added to their growing collection of non-fungible tokens (NFT’s). They can choose to display it however they like, whether it be on a slideshow screen, digital art frame, or physical print. Many digital art galleries have sprung up in the wake of this technology, with some hosting virtual walk-through spaces on game servers like Decentraland and CryptoVoxels. The gallery I started, MUSE, has paintings and sculptures on display throughout America, as well as tokenized digital art on display throughout the internet and ether.
The proverbial ‘art world’ has now transcended beyond the physical world. It is now available to many more people, and as a result will inspire many more to create art of their own. Regular people can now invest in an art piece as though they are purchasing it as a stock. Unlike a stock, however, they can enjoy the beauty of it displayed on their wall as it appreciates in value.
Unlike a stock, 26,000x returns is just a regular day in the virtual art gallery.