Cryptocurrency and the boom in the digital art market

Twenty-year-old Jazmine Boykins most likely didn't imagine that she would move from posting her artwork online for free to sharing her animations or illustrations on Black Life for thousands of dollars each. Yet, this has been the case, thanks to the emerging technology and framework of NFTs or Non-fungible tokens that have enabled Boykins to establish digital ownership and valuation of her work. With the recent cryptocurrency boom in the art market with even traditional art auction houses like Christie's buying into the market with the recent sale of a fully digital artwork, there is much to be said about the waves caused in the 'crypto art world' in the past few months through the end of 2020 and the beginning of 2021. Christie’s nod of validation towards the emerging crypto art market offering Non-fungible tokens is perhaps the unimaginable step forward that was yet to be anticipated. The artwork by Mike Winkelmann, digital artist known as Beeple, sold for a whopping 69 million dollars in March 2021, earning Winkelmann a place among the most valuable artists of today in terms of auction sales; this is right after David Hockney and Jeff Koons. As one attempts to retrace the rise of NFTs from the cautious beginnings to the recent - somewhat unprecedented rise - one begins to understand the nature of the emerging technology that has upended the art market as it were once known.

NFTs or Non-fungible tokens are essentially digital tokens that are tied to assets which can be bought, sold and traded in a traditional sense – in the art market enabling artists to earn a profit from their work in a much easier way than ever before. Digital art has often had the disadvantage of having to defend its position, worth and place within the larger narrative of the art market, it has been hard to avoid questions of its ownership and acquisition which is not nearly as straight forward as is the case with more traditional means of artistic mediums. Bringing NFTs into this discussion drastically changes the conversation as was seen with Boykins sale of her work BLACKSNEAKERS for more than $60,000 in NFT art.

There is no denying that NFTs are currently having their 15 minutes of fame with nearly 250 million dollars having been spent in the market in the year 2020 itself. This is the total sale amount; prior to the validation stamp of Christie’s having sold the work by Beeple for 69 million dollars. When we really do try to go back to the basics to best understand NFTs we have to begin considering them as computer files of proof and authenticity, a deed in a sense. They exist within the sphere of the blockchain which is a tamper resistant public ledger, NFTs have a unique valuation system as opposed to bitcoin and other cryptocurrency, which is set by the highest bidder. How does this work for the artist, you ask? Well, the artist has to sign up with the crypto marketplace where ‘mint’ digital tokens are uploaded and validated in accordance to the artist’s information on a blockchain, largely the Ethereum blockchain, costing somewhere between 40 dollars and 200 dollars. This piece can then be listed for auction on an NFT marketplace the experience of which is very similar to ecommerce marketplaces such as eBay or Amazon.  

It seems rather incredulous as a concept, where investors are paying good money for works that are often experienced and shared online for more or less no money, and there have been many detractors who have dismissed the emergence of NFTs as yet another bubble, requiring us to pay little heed to. However, one has to consider the attraction of the currency among not just artists but also collectors as adding some sort of validation to the system of exchange. A variety of digital artists, tired of having to explain the content created and having to resort to exchanges via social media platforms, have historically received very little in exchange for their effort, and have now found their place within the NFTs system. Envisioning a future where NFTs have a way of not only re-charting the process of creation itself but also the manner in which we as a society value art, namely digital art. It is perhaps, through these NFTs that it is possible to own digital art and further sell it if need be. While the technological world has long been promised a revolution in blockchain, transforming consumerism, the implication of this transformation has a far-reaching impact much larger than simply the art market and the luxury market.