The digital NFT Art Craze that makes millions for some creators

LONDON (AP) – A digital work of art, modified using cryptocurrency technology to make it unique, sold at auction this week for nearly $ 70 million. That transaction made headlines worldwide and sparked the already explosive interest in these types of digital objects – known as non-replaceable tokens or NFTs – that have caught the attention of artists and collectors alike.

In economic jargon, a replaceable token is an asset that can be exchanged one to one. Think dollars or bitcoins – each has the exact same value and can be traded freely. A non-replaceable object, on the other hand, has its own obvious value, such as an old house or a classic car.

Cross this idea with cryptocurrency technology known as the blockchain and you get NFTs. These are basically digital certificates of authenticity that can be added to digital art or, well, pretty much anything that comes in digital form – audio files, video clips, animated stickers, this article you are reading.

NFTs confirm ownership of an item by recording the details in a digital ledger known as a blockchain, which is public and stored on computers on the Internet, making it virtually impossible to lose or destroy.

Right now, these tokens are white-hot in the collecting world, where they are used to solve a problem central to digital collectibles: how to claim ownership of something that can be easily and endlessly duplicated.

I DON’T GET IT YET. CAN’T SOMEONE COPY ONLY DIGITAL STUFF FROM THE INTERNET?

Of course, anyone can download a copy of Beeple’s art from their social media feed, print it, and hang it on the wall. Just like you can take a picture of the Mona Lisa in the Louvre or buy a print from the museum’s gift shop. But that doesn’t mean you own those original works of art.

One of the purposes of NFTs is that they can be used to trace the digital provenance of an object, allowing a select few to prove ownership. In the broader picture, it is a way of creating scarcity – albeit artificial – so that you can sell something for higher prices thanks to the scarcity.

“You can create value for all the time, money and effort you spend in your digital life,” said Chicago fund manager Andrew Steinwold, who started an NFT fund in 2019. “You have property rights in the physical world. Why don’t we have property rights in the digital world?”

Some NFT issuers grant full copyrights to the buyer, others do not.

Beeple is an American digital artist based in South Carolina whose real name is Mike Winkelmann. He has been making digital sketches with 3D tools every day for 13 years. Auction house Christie’s calls his work ‘abstract, fantastic, grotesque or absurd’. He has 1.9 million followers on Instagram.

In December, the first comprehensive auction of his art raised $ 3.5 million, a striking amount surpassed by the record-breaking sales of his collage ‘Everydays: The First 5,000 Days’ this week for nearly $ 70 million, paid in a digital version. currency known as Ethereum.

WHO ELSE SELLS NFTs?

William Shatner of “Star Trek” fame sold 90,000 virtual trading cards for $ 1 each last year. Electronic musician Grimes sold $ 6 million worth of digital art last month, including a music video featuring winged angels floating in pastel-colored dreamscapes, which cost $ 389,000. Clips of NBA star LeBron James dunking sell for a whopping $ 225,000. Actress Lindsey Lohan sold an image of her face. You can also buy virtual land in video games and meme characters such as Nyan Cat.

Digital artist Anne Spalter started out as an NFT skeptic, but has now sold multiple works of art using the tokens. The latest was a video called “Dark Castles” – of mysteriously distorted castles generated by artificial intelligence technology – that sold for $ 2,752.

“NFTs have opened up art to a whole host of people who would never have gone to a New York gallery,” said Spalter, who pioneered digital art courses at Brown University and the Rhode Island School of Design in the 1990s. “They’re investors, they’re tech entrepreneurs, they’re in that world.”

BUT WHO WOULD SPEND $ 70 MILLION ON ONE SPEND?

Christie’s on Friday identified the buyer of Beeple’s work as the financier of a digital art fund under the pseudonym Metakovan, an announcement that could spark concerns of a bubble in the cryptocurrency art market. The buyer founded Metapurse, described as the world’s largest NFT fund, which is likely to benefit from the heightened attention.

The UK auction house said the purchase makes Beeple’s piece the third most valuable work of art ever sold by a living artist, after works by Jeff Koons and David Hockney.

Spalter said she expects this bubble to burst, although she still believes NFTs hold great promise for artists as a way to reduce fraud and works misallocation.

“I’m still amazed at the prices and how high they are,” she said. “I think there will be a correction.”