NFTs and the Evolution of the Art World  

In 2021, the art world was rocked when world-renowned auction house Christie's became the first  business to sell a work of digital art with an NFT, or non-fungible token. The piece, called Everydays: the First 5000 Days, is a digital collage created by an artist known as Beeple. It sold for over $69 million.

This is a perfect illustration of the power of NFTs in the art world. Since the beginning of 2021, NFT art sales have skyrocketed, and they are expected to remain on an upward trajectory for the foreseeable future. For this reason, there has never been a better time to learn more about NFTs and the part they will play in the arts moving forward.

Understanding NFTs

NFTs have only recently begun to enter the mainstream, but their history can be traced back to the early 2010s and the rising popularity of cryptocurrencies. As Bitcoin and similar fungible tokens became more prevalent, online creators, investors, and sellers wanted to develop new types of assets that could be sold using blockchain technology.

A blockchain is a hack-resistant digital ledger that records information from transactions in blocks that are then linked together to form a chain. Because the ledger cannot be altered and is encrypted, it is especially secure and an excellent means of verifying the authenticity of a purchase.

NFTs are digital assets that are entirely unique, which means that they cannot be directly exchanged with other assets because each one has different valuations. This is no different from the way that physical works of art are valued. For example, Jackson Pollock's Blue Poles and Pablo Picasso's Guernica are both incredibly famous paintings by highly-respected artists, but their value is determined by how much a person is willing to pay for each one at any given time.

Examples of NFT Artwork

In addition to Beeple's record-setting digital collage, many other artists have found success by creating, minting, and selling NFTs. These works have come from individuals using a wide variety of techniques and styles in their digital artwork, often reconceptualizing the definition and perception of art. Among them are:

• The Merge by Pak was sold to 28,983 individual collectors for $91.8 million and is an example of fragmented art.
• A project called Art Blocks, which uses an algorithm to create an image of loops and pegs, sold Ringers #109 for $6.9 million.
• An artist in London who goes by Xcopy sold the moving digital artwork Right-click and Save As guy for $7.09 million.

Of course, not all NFT artwork fetches such high sums. However, these examples demonstrate the many different ways that artists have found to experiment with digital formats. The resulting work that they are producing is being sold on NFT marketplaces to investors, collectors, and art aficionados around the world.

Advantages of NFTs

Despite some initial skepticism on the part of art critics, there are many benefits to using NFTs, not only for artists but also for galleries and buyers. They are, in many ways, equalizing and diversifying the market.

Financial Benefits

While it has always been the case that artists have the option to independently sell their work, the reality for many artists is that true financial success is not possible without partnering with galleries and auction houses. Fortunately, many galleries and auction houses have recognized the enormous potential of NFT art. 

Art institutions have taken multiple paths to incorporate NFTs into their sales strategies. Some, like Christie’s and Sotheby’s, have begun auctioning digital artwork and building online galleries. Others are bringing NFT into physical spaces. One such example is Blackdove in Miami, Florida. Blackdove opened in 2021 after designing a digital frame that allows buyers to physically display their NFT artwork. Visitors to the gallery can examine digital art up close and have the option to buy a piece with cryptocurrency and leave with it in hand.

Artists who prefer to sell directly to buyers can easily do so with NFTs. While they sacrifice the prestige of a gallery or auction house, it is possible to maintain access to a large buyer pool via social media and NFT networking.

Furthermore, when artists sell their physical artwork, they relinquish all rights to the proceeds of any future sales. In contrast, the underlying technology of NFTs makes it possible for artists to collect royalties anytime their work is resold. Because NFT transactions are recorded on a blockchain, there is a traceable path from the original artist to each subsequent buyer. This system simply does not exist with physical sales.

Opportunities for New Artists

Just as it is challenging to build a career as an unknown musician or writer, it can be difficult to become an established or well-known figure in the world of art. Collectors and investors are often reluctant to take a chance on an artist without a demonstrated record of successful sales, making it far more time-consuming and problematic to get work in front of an interested audience.

NFTs have created a world in which even brand new artists can make profits from their work. For example, Jazmine Boykins, who had not long before been posting her work online for free, earned more than $60,000 in a period of six months by selling NFT art.

Increased Creativity and Experimentation

As shown by the sales that have already made international waves, NFTs encourage artists to take chances with new digital art forms. Rather than emulating previous styles or techniques, artists producing pieces to sell in an NFT marketplace reap the benefits of creating something particularly new or compelling.

In addition, NFTs create new possibilities for marketing and publicizing art. Engaging with social media and the metaverse allows artists to broaden their exposure while also exploring novel forms of audience interaction. In this way, artists capture the attention of the public and build their reputations as reputable and noteworthy artists.

Proof of Authenticity

The value of any artwork in both physical and digital forms is dependent on its authenticity. While anyone can buy a print of Van Gogh's Starry Night, only one person can own the original. However, reproductions can be incredibly convincing, to the point that verification by experts is sometimes necessary to prove that a work of art is legitimate.

This is why certificates of authenticity have become such a vital component of art purchases. Without them, a work of art loses considerable value. Physical certificates can be lost, damaged, forged, or destroyed. However, this is not the case with NFTs. As a form of digital art, NFTs have an embedded certificate of authenticity that cannot be altered on the blockchain. This makes it incredibly easy for people who invest in or collect art to prove that a piece is authentic.

The Future of NFT Artwork

People from every part of the art world are eagerly entering the realm of NFTs. Artists are taking advantage of a more profitable forum for sales, while galleries and auction houses have found a way to reach a new base of customers.

The majority of current NFT buyers are millennials, but this is not the demographic traditionally associated with buying and collecting physical art. As a result, those involved in art sales have a prime opportunity to reach out to and draw in new buyers. These are individuals who may not be particularly engaged in the art world but who are immersed in current technological trends and want to capitalize on them.

Finally, as NFT marketplaces grow and evolve, there is endless potential for enhancements in digital art sales. In 2021, Sotheby's launched their custom NFT marketplace known as Sotheby's Metaverse, and other collectors, galleries, and auction houses are anxious to become a part of the exciting developments in NFT auctions.

Getting Involved in NFT Art Sales

Considering the enormous creative, strategic, and financial possibilities presented by NFTs, it's no surprise that their impact is expected to continue to grow. To get a better idea of what lies ahead, consider that Jeffries, an investment bank, projects that the NFT market will be above $80 billion by 2025. This is especially remarkable considering that the value in 2020 was only $82.5 million.

This is an exciting time to become a part of the NFT art world, but navigating such new territory is better done with clear-sighted guidance. To learn more about what Anterdit’s branded NFT marketplace can offer your organization, reach out to the experts at Anterdit.