At Sotheby’s in London they’re preparing for the Arts of the Islamic World and India sale. The galleries will soon be lined with manuscripts and paintings spanning 1,200 years — from rare Iznik pottery to richly ornamented silver — to go under the hammer next week. It has always been this way at the 277-year-old auction house — but there’s revolution in the air.
Upstairs in the boardroom, which is decorated with Damien Hirst’s bejewelled red butterfly paintings, Michael Bouhanna, one of the heads of Digital Art Sales, opens his laptop and takes me into Sotheby’s Metaverse. He walks me through a three-dimensional digital replica of the building we’re in. The buyers are digital representations of people, known as avatars, and the art is purely digital or a digital replica of a physical work.
Bouhanna is at the centre of the buzziest market in art — NFTs. Sotheby’s NFT sales revenue reached $100 million last year, even though sales only started in April. An NFT of a collage of 5,000 images by the American digital artist Mike Winkelmann, who calls himself Beeple, sold for $69 million in an auction at rival Christie’s last March, making him the third most bankable living artist, after Sacha Jafri and Ed Ruscha.
The British Museum and the Uffizi are making NFTs, while Nadya Tolokonnikova of the punk band Pussy Riot is one of a group of artists who launched an NFT of the Ukrainian flag to raise money for those affected by war. They invited art lovers to bid for shared ownership of the image and raised $7.1 million.
Hang on, what are NFTs and how are they changing the art world?
An NFT — non-fungible token — is a unique digital file made up of a string of numbers and letters that serves as a certificate of ownership of a digital asset. Artists make, or “mint”, an NFT by uploading an image, video or piece of music on to a special platform or “marketplace” — a popular one is OpenSea — which creates a corresponding NFT for it. Collectors buy this certificate using money in a regular bank account or, more often, cryptocurrency. Ownership is recorded on a publicly accessible, verifiable digital global ledger called the blockchain, where anyone can also see the “metadata” about the NFT, such as who created it and when, and who has owned it.
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Can NFTs make it easy to trade and collect digital art?
The ability to assign value to and prove ownership of digital works makes it possible to trade them — and that’s why the art world is excited. “Digital art has been around since the 1960s, but has largely been enjoyed in museums and institutions because it has been hard to buy and sell. NFTs change that,” says Sebastian Fahey, Sotheby’s managing director for Europe, the Middle East and Africa.
Collectors covet NFTs partly because they’re the “new, new thing”, but also because signalling social status and taste is as important in the new virtual worlds that many inhabit as it is in the real world. You can “hang” a digital work on a screen in your home, but also display it in your virtual home or gallery on the metaverse. Almost 80 per cent of NFT buyers are new to Sotheby’s and most are ten years younger than collectors in other categories.
From ‘The Fungible’ Collection by Pak
Courtesy of Sotheby’s
What do artists make of them?
NFTs appeal to contemporary artists because they are disruptive. Damien Hirst has used his trademark “spot work” to create what look like banknotes in NFT and physical form. Buyers have two months to choose if they want to keep the physical version or the digital version — the rejected version is destroyed. Hirst likes the idea of buyers having to choose “not just ‘Where’s the value?’ but also ‘Where’s the joy?’ ” (They aren’t popular with everyone, though. David Hockney calls them “silly little things”).
Crypto-evangelists predict that the blockchain will revolutionise how art is distributed, perhaps on much more favourable terms than artists and consumers enjoy now. Today, access to most digital art forms is held by a gatekeeper — for example, a bricks and mortar art gallery, Spotify or Netflix. Some reward artists well, others don’t. NFTs and the blockchain offer artists — and consumers — the chance to bypass gatekeepers and pocket sales without giving up a cut.
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“NFTs will put artists back in charge of funding, creating and selling their work because they enable them to monetise their work and fans directly,” argues collector and leading technology investor Jonathan Bixby. Taylor Swift is an example. “She can ask fans to buy a stake in her work via NFTs in return for early streaming rights and perks such as exclusive interviews or a dedication.” Bixby is so convinced that a revolution is under way — and will be televised — that he has made a $1.4 million investment in Sturdy Exchange, a marketplace for the display, collecting and trading of NFTs by artists.
What are the names to know?
NFT artists who are fetching top dollar include Pak, Larva Labs and OxDEAFBEEF. Many are anonymous.
Are NFTs taking off in the world of books, music and film?
It’s not just visual artists who have caught the NFT bug. Musicians, including Quincy Jones, Emeli Sandé and the estates of John Lennon and Whitney Houston, are launching song clips or video clips for sale as NFTs. Alastair Webber, Andrew Lloyd Webber’s son, is launching an NFT for Kevin MacLeod, the most streamed artist on TikTok. Hollywood also wants a slice of the crypto pie. Bixby is working on the first feature film to be funded by NFTs. Those who invest in A Wing and a Prayer — to be made by Niels Juul, the producer of Martin Scorsese’s The Irishman — will enjoy perks ranging from exclusive screenings to a financial stake, depending on what they spend.
In the book world, Jonny Geller, the chief executive of the Curtis Brown Group, is working with writers and their estates “to create new opportunities for readers to enter virtual worlds created by authors in the fantasy market and science fiction”. He spies opportunities to sell unique literary assets. “NFT annotated papers, artwork and items unique to an author might be a collector’s dream,” he says.
Can NFTs be hacked?
Yes. More than $2.2 million worth of NFTs, including the highly prized Bored Ape Yacht Club and the Mutant Ape Yacht Club collections, were stolen from New York based art collector and gallerist, Todd Kramer, last year in what is believed to be a phishing scam. Some artists complain that their work is being illegally copied online and offered for sale by thieves.
And what if it’s a fad — will the NFT bubble burst?
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Critics dismiss the new-found appetite for bits and bytes as a crypto-bubble. How can bragging rights to a digital image — which can usually be viewed online and copied by anyone — be remotely as valuable as owning a one-of-a-kind physical work of art, they ask. Detractors claim that recent sales have been propelled to artificial heights by crypto-investors who have little else that they can buy with their digital coins. Richard Bernstein, the founder and chief executive of the New York fund manager Richard Bernstein Advisors, points out that the marketis largely unregulated. He predicts, with perhaps a little exaggeration, that it will be “the biggest financial bubble in history”.
A public ledger might change the way art is traded, but critics question whether artists, who are not noted for being technologically or financially savvy, will embrace the blockchain. They point out that another blockchain innovation, bitcoin, has been around for more than a decade and few of us have any or plan to get any. It all sounds too weird, impractical and risky.
An excerpt from Series 4 Glitchbox by 0xDEAFBEEF
Courtesy of Sotheby’s
Perhaps the biggest objection is environmental. The always on, always live global blockchain consumes vast amounts of electricity, which creates a carbon footprint as large as that of nation states. Artists and auction houses are working to create a greener ledger, but have yet to crack it.
So could NFTs and the blockchain fizzle out? Not a chance, insists Herman Narula, the co-founder and chief executive of Improbable Worlds and one of Britain’s leading tech entrepreneurs. “We’re going to see an absolute explosion of art. The opportunities are skyrocketing.”
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Bouhanna agrees and shows me the latest trend in NFT art — works that slowly fade and disappear over, say, a year, after which the buyer must sell to a new collector, for whom the piece reactivates and the fading cycle restarts. “It raises questions about the existence of art and how it should be enjoyed and shared,” he says. Either that or it’s a satire on what a new class of collector might fall for.
