NFT technology, Harrison says, offers a way to put a price tag on digital art by leveraging that primal instinct of high quality – the quest for status-enhancing Veblen goods, which is coveted only insofar as they are pricey – that is behind many collectors’ urge. Combine that with a frothy community eager to trade and meme every new shiny blockchain adjacent construct for significant prices and the trick is done.
“In this digital world we have accelerators: all of a sudden you can get three or four times what you paid for something – tomorrow someone will be ready to buy it,” says Harrison. Even better, blockchains can also securely, immutably track how a token was created and changed hands over time. “Provenance is clearly an important part of the value of art,” says Harrison.
The crowd buying NFT-linked art is varied. Some of its members are cryptocurrency tycoons looking for the latest to deposit their savings. “People who were into crypto early on and who have a lot of ether [Ethereum’s cryptocurrency], they’re looking for ways to use it, ”said James Beck, communications and content director at ConsenSys, a blockchain company that has built an app to store and manage NFTs. They want to show, says Beck, that they are “patrons of the art on the Internet.”
It helps that some NFT marketplaces allow people to showcase their purchases, such as in an online gallery or museum. Jamie Burke, founder and CEO of blockchain investment firm Outlier Ventures and an NFT enthusiast, is among those excited about their renewed role as supporters of digital art. Burke says he was initially turned off by the early, “self-referential” cryptocurrency-focused artworks – littered with bitcoin characters and pixelated memes. But as he became more interested in space, in the summer of 2020, he was “blown away” by the new artists.
“This was standalone art I was going to buy, and I thought it was a good idea that I could have a unique digital edition of it,” he says. “I’ve just started collecting, personally, trying to get new artists and professionals to enter the space. I am building up a bit of a collection. “That doesn’t mean he’ll turn down a lot when it presents itself. On February 13, he sold an NFT for which he paid $ 500 for $ 20,000 in ether. the sale in a tweetBurke said he would use the proceeds to buy more art.
Harrison says that while the market is currently teeming with speculators who would buy and flip any blockchain-based asset in the hope that it will increase in value, bona fide collectors are becoming increasingly involved. “It’s a combination of people who are just speculative and people who want to collect and have something cool,” he says. “My role is to balance an element of speculation with enough people who want to buy something because they like it, and they want a collecting habit. If everyone buys to speculate, it doesn’t work, then it just becomes a tradable token again. “
Some digital artists welcome the trend. Most platforms are easy to use, allowing them to upload their works, automatically ‘hit’ NFTs, and wait for the offers to rain in – and these often exceed the amounts they would receive if they tried their digital artworks online or sell online. as prints. Brendan Dawes, a British graphic designer and artist who creates digital images using machine learning and algorithms, says a print of one of his pieces would typically sell for $ 2,000, while his latest NFT would sell for $ 37,000.
Profits don’t stop there. NFTs can be designed to pay their creators a cryptocurrency fee every time they change hands. If a buyer of one of Dawes’ pieces resells it, Dawes automatically receives 10 percent of the price paid. “That is another of the differences with the traditional world. You get this ongoing royalty. “