The proliferation of NFTs— non-fungible tokens — has elevated discussion about blockchain technology generally, and as it regards collectibles and art more specifically.
The crypto and NFT trading platform FTX writes that NFTs “give investors a new way to invest in digital artwork, join communities anchored by profile pictures/avatar, build a collection of memorabilia or even start building assets for engagement in the metaverse.”
This is entirely true. And those are just some of the ways blockchain technology is changing the art world.
Authenticity and provenance
Every great while, a dealer discovers a new work by an old master. This is a painstaking process that requires a trained eye, access to detailed historical records, and trust in the honesty of generations of ordinary people who may or may not have had any idea what it was they’d been holding onto.
This is what is meant by provenance — the origin and attribution of an artwork. As mentioned, determining provenance is difficult, all the more so because it isn’t always a purely scientific endeavor: There’s an element of persuasion involved.
Sometimes persuaders get it wrong, and you end up with expert-authenticated fakes (intentional frauds in some cases, earnest copies by acolytes otherwise) making the big-money rounds on the international art scene.
NFTs tackle issues of provenance and authentication right at the start, preemptively addressing fraud. Information about an NFT — the artist, the date of minting, the owner — is written onto a blockchain ledger, at which point it cannot be altered, copied, forged, but can be sold or shared.
Most blockchain-backed digital art has so far been original digital pieces created by both working artists and those unaffiliated in any meaningful way with the traditional art dealership world.
However, traditional artworks have a place in the blockchain art space.
Extant artworks can be tokenized and traded on the open crypto market. Tokenization is the process by which a digital copy of a physical work of art is created and written onto the blockchain. The owners of the original artwork cooperate with digital marketers to allow dissemination and ownership rights to buyers and traders in the crypto space.
Some tokens are then fragmented. Fragmentation is the breaking-up of an artwork into many parts — millions, in some cases —allowing multiple people to own shares, so to speak, in an artwork. People who can’t pay millions for a piece can pay small amounts to own a small portion of it.
Fragmentation exists to solve the liquidity problem inherent in NFTs. Many NFTs sell for huge prices. And because each NFT is unique in value, owners are going around with what is, essentially, a million-dollar coin. You can’t buy other things with it and sort of get “change” back. So it can be tough to unload an NFT. Via fragmentation, however, you can sell smaller portions at commensurate prices that people may actually be able to pay.
Many NFT creators have a significant social media presence, making them accessible to art world outsiders. Blockchain-legitimized art allows artists to get in close touch with buyers, owners, and traders
This allows for a democratization of art patronage. Where once art was commissioned by governments or churches, NFTs can be commissioned by anyone willing to pay the price an artist sets.
Furthermore, blockchain artists see residuals when their art increases in value — which is not, and never was, the case in traditional art markets.
Blockchain is sure to continue changing the art world in surprising ways. Keep an eye out: You may soon be able to own a digital version of your favorite painting — or at least a portion of it.