Internet ART

Is it art? NFTs and the surge of digital ownership.

Is it art? NFTs and the surge of digital ownership.
Written by publisher team

NFTs, or nonfungible tokens, are certificates of ownership of a unique digital item such as a video, recording, or cyber artwork.

These digital receipts reside on the blockchain (a digital ledger). Once an NFT has been “minted” – its code permanently woven into the blockchain’s DNA-like digital strands – it can be bought or sold with a cybercurrency. In March, an artist who calls himself Beeple auctioned a mosaic of digital images as an NFT that fetched the equivalent of more than $69 million.

Why We Wrote This

In the art world, value has traditionally been based upon scarcity. But nonfungible tokens, or NFTs, are monetizing freely available digital items by placing valuation on the idea rather than the possession of a physical object.

Observers say that the purchase of these digital receipts is best understood as a form of patronage—a monetary appreciation for the idea and the creator behind a piece of cyber art. The value comes in having one’s name associated with the work. That has inverted the traditional model of the art market by attaching value to artworks that are ubiquitous rather than scarce. Accordingly, NFTs have rapidly expanded the demand for digital art forms that haven’t always been valued as much as physical paintings, sculptures, and installations.

“Value isn’t based on scarcity anymore – it’s based on virality,” says Wade Wallerstein, co-director of TRANSFER gallery. “The more places that thing exists, the more valuable it is in our current economy.”

In March, Kenny Schachter proclaimed that he’d auctioned off his grandmother on the internet. The digital artist had uploaded an image of his long-deceased matriarch to the web and sold the rights to it as a nonfungible token (NFT). It was a prankish test of the boundaries of a technology that has the art world abuzz.

NFTs are certificates of ownership of a unique digital item such as a video, recording, or cyber artwork. These digital receipts reside on the blockchain (a digital ledger). Once an NFT has been “minted” – its code permanently woven into the blockchain’s DNA-like digital strands – it can be bought or sold with a cybercurrency, currently Ethereum. In March, an artist who calls himself Beeple auctioned a mosaic of digital images as an NFT that fetched the equivalent of more than $69 million.

In the case of Mr. Schachter, “I found myself repeating again and again that everyone and their grandmother were minting NFTs. So it occurred to me, I might as well mint mine,” he says via email. “I immortalized her in the ether, literally.”

Why We Wrote This

In the art world, value has traditionally been based upon scarcity. But nonfungible tokens, or NFTs, are monetizing freely available digital items by placing valuation on the idea rather than the possession of a physical object.

The New York City-based artist was making a point about how NFTs have upended traditional appraisals of art. Now, he muses that the several thousand dollar sale may have been too cheap.

The monetary value of expensive fine art is often driven by scarcity and uniqueness. That’s why Parisian galleries started to limit and individually number the prints they sold in the late 19th century. But rarity isn’t an inherent quality in digital art. Cyber ​​artworks are freely accessible online (Beeple’s pricey artwork is on his Instagram account) and infinitely replicable. Yet NFTs allow their owners to claim ownership of an intangible digital asset, which, at its core, consists of computer coding. It doesn’t mean they truly possess that combination of ones and zeros any more than someone could have dibs on 2+2=4.

Courtesy of Kenny Schachter

Digital artist Kenny Schachter uploaded an image of his long-deceased grandmother to the web in March and sold the rights to it as a nonfungible token.

So what, exactly, are NFT collectors valuing? Observers say that the purchase of these digital receipts is best understood as a form of patronage—a monetary appreciation for the idea and the creator behind a piece of cyber art. The value of the NFT itself comes in the form of bragging rights for having one’s name associated with that cyber artwork. That makes it a collectable asset. The technological innovation has inverted the traditional model of the art market by attaching value to artworks that are ubiquitous rather than scarce. Accordingly, NFTs have rapidly expanded the demand for digital art forms that haven’t always been valued as much as physical paintings, sculptures, and installations.

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