NFTs: A Waste of Money or the Future of Art?
The term NFT has been in the news a lot lately, but just what is it? NFT is short for non-fungible token—which may not help. Fungible items are commodities that have no difference among them, like copies of a mass-market printed book or pork bellies of a particular grade. NFTs use a blockchain ledger, similar to the one that powers Bitcoin, to digitally sign pieces of digital art, like images, short videos, and songs. That signature makes each one unique, allowing them to have their ownership irrevocably transferred or resold in a way that can be publicly and cryptographically verified. The Verge has published an amusing explainer to help you wrap your head around the idea.
One of the non-intuitive aspects of NFTs is that they don’t work as a form of digital rights management, nor do they have to include any copyright or rights of reproduction or distribution! Why spend $16,000 (or more!) on this Gucci Ghost animation when you can Control-click it and save it to your Mac? The perceived value for which buyers are paying big money lies in the bragging rights surrounding owning what backers of the approach claim is the “original,” unique copy of that work of art.
It’s easy to dismiss NFTs as a bit of Internet madness akin to the GameStop short squeeze, but they do offer a real benefit for artists. That’s because artists can set it so when the NFT is resold, the artist also gets a cut. As a piece of art is sold and resold, it often increases in value, particularly if the artist has become better known in the meantime, and it has long seemed unfair that artists don’t get to share in that appreciation. In the end, the Internet has made it increasingly challenging for artists to make a living from their art, and NFTs might be an answer to that conundrum.
I’ve read through that Verge article twice now, and all I’m seeing from this is that a new class of middlemen are claiming that they can make artists rich. I have a bad feeling that it’ll end up with the middlemen rich and everyone else fleeced. With the added kicker of helping wreck the environment in the process. Cynical? Maybe.
Regardless of the short-term value of NFTs for artists, they are currently unethical given how energy-intensive transactions on the blockchain are. The energy required for the transactions involved with minting and selling a single NFT are roughly equivalent to a year’s worth of electricity usage for the average EU citizen, and artists tend to mint at least dozens of NFTs per run.
I totally understand the desire for artists to monetize their work given how little our society values art, but NFTs can’t be the approach if we still want a habitable climate.
Beanie Babies. Tickle Me Elmo. Uggs. Lava Lamps. Pokémon, Cabbage Patch. Jordasch. Etc., Etc., Etc…
Memoirs Of Extraordinary Popular Delusions And The Madness Of Crowds, first published in 1841, is available for free in Apple Books. It’s 100% true history, and great fun to read.
Another article attempting to explain NFTs…
Good explanation. And proves that it is a waste of money.
It’s just like trading Beanie Babies. Only when this bubble bursts, you won’t even have a room full of plush figurines to play with. You’ll just have “bragging rights” to tell someone you paid thousands of dollars to have your name associated with a URL somewhere.
And musicians are starting to sell albums, seats for concerts and promotional products via NFTs:
And if you have $2,500,000 sitting around, Jack Dorsey is selling the very first tweet:
Seth Godin is very much not a fan.
Everything is a “waste of money” if you don’t want to buy it. For me, Spotsball tickets are a waste of money, but many people disagree.
The NFT has one advantage over every other method of artists getting paid: with an NFT the artist makes money every single time the work is sold. Not a lot, but if the work becomes valuable they do not get only that initial $75 for designing the Nike logo, but also a percentage of the sales price going forward.
Oh, and minting an NFT is not like mining bitcoin. It does not require gigawatts of power and hundreds of GPUs.
There’s a huge difference here.
If I buy a ticket to a “sportsball” game, I get to go and see the game in person. Someone without a ticket can’t (legally) do so. He might be able to watch it on TV or see highlights in the news, but he, by definition, can not have the full experience of seeing the game in person. That is a very distinct value.
On the other hand, buying a token that says you “own” a video clip or an animated icon that everybody on the Internet can also download doesn’t give you any special value. The only thing you have that nobody else has is your name on some web server somewhere saying that you paid for it.
People like to compare this to buying a precious work of art, but the difference is that if you own a painting, you can take it home, hang it up in your living room and enjoy it, and nobody else can do so without your permission. Ditto for any other physical collectible item. Part of the value is that you have exclusive rights to do what you want to the item.
But if I pay a sum of money for something and everybody else in the world can still get it with or without my approval, then what have I paid for? Nothing more than the publicity of other people seeing my name on the thing’s official home page. Is that worth something? Maybe. Is it going to be worth anything in the future? Ask all the people who spent thousands of dollars collecting Beanie Babies what their collection is worth today.
I’ve never been to Paris, but I have seen the Mona Lisa many times. ¯_(ツ)_/¯
No one paid millions of dollars for a Van Gogh to keep it from being seen by anyone else.
Except that there’s a material difference to seeing the original as compared to a reproduction. It might not be a difference that matters to you, but there is a physical difference in the materials and their properties that can change the experience of looking at the Mona Lisa. A copy of a piece of digital artwork is literally exactly the same.
Maybe not the Mona Lisa, but I’ve paid for dozens of (far less expensive and not the least bit famous) pieces of artwork. They are hanging in my home and nobody can see them without visiting my home and getting my permission to enter.
And all those famous works are owned by someone, whether it is an individual, a philanthropic foundation, a government, corporation or any other organization. The owner chooses whether or not it should be displayed, where it should be displayed, who gets to view it, and how much you must pay for permission to view it.
And if you want a copy for yourself, the owner typically holds a copyright, meaning he has to grant permission for you to (legally) make or buy a copy.
None of this applies to NFTs, where anybody can go and download a copy that is completely identical to what the “owner” paid for. In the case of the NBA video, the buyer doesn’t even have a copyright license, so he can still be sued if he decides to redistribute the clip that he paid hundreds of thousands of dollars to “own”.
There’s also the issue of reproduction rights. The sale of a work of art might or might not include reproduction rights. IIRC, unless a deal is negotiated with the artist, the artist maintains reproduction rights for the painting, sculpture, print, etc., unless it’s a work for hire, licensing or another negotiated arrangement. Andy Warhol, who had a background in commercial illustration before morphing into fine arts, made sure he held on to reproduction rights. He did very well with T shirts, etc., from work that he sold to someone else or gave to a museum, and I’m sure his estate still earns money from licensing.
I don’t know how this will play out with NFTs, but I’m assuming it will be the same. I suspect a lot of people are clunking down big bucks for NFT ownership without knowing they might not have IP rights.
Here’s one recent example:
Yep, there are whole temperature controlled warehouses full of physical artwork across the globe.
Often owners never even see the work, but buy it then hold it for a period as an asset then eventually get it pulled out and up for sale when market conditions are favourable to garner a decent return.
Try doing that with a Tweet in the future. I think not.
And there have been issues with stolen artwork throughout history. Here’s just one recent example:
Pretty unbelievable how such legacy issues remain decades later.
The surface is still just being scratched. A many decades long struggle over Kilmt’s Lady In Gold was settled just a few years ago by the US Supreme Court. There’s a fascinating book about about it “ The Lady in Gold: The Extraordinary Tale of Gustav Klimt’s Masterpiece, Portrait of Adele Bloch-Bauer.” It was made into an award winning movie starring Helen Mirren. A good summary of the case is here:
Oh yeah, I remember that. AFAIR, the BBC I think did an arts programme about it.
I wonder how much this will sell for 5,000 days from now. I recommend reading the whole article to get a perspective on how NFT art sales are spinning into outer space:
I haven’t found a copy of the 5000-image collage on-line (at any kind of meaningful resolution) yet, but if you want to look at all of Beeple’s work, including those 5000 images displayed separately, they’re all available for free on his web site: https://www.beeple-crap.com/
He also has placed a lot of his images on line in high resolution format that can easily be downloaded over here: https://www.behance.net/beeple
I’ll let others decide if “ownership” rights to this collage is work $69M, but for the rest of us that just want to view the art, Beeple has made it really easy, even releasing some of it (like his VJ Loops) under Creative Commons licenses.
And digging a bit further, it appears that Beeple is including physical objects as a part of selling his NFTs:
In addition to a record of the sale on a blockchain, he is shipping “physical tokens” consisting of:
So at least you have something to show for your purchase.
I hadn’t heard of Beeple before all this, but wow, some of his stuff is pretty dark. I do like The First Emoji a lot though.
If we end up with a way to do NFTs without wasting insane amounts of power, maybe I should make NFTs for every TidBITS article, with a portion of the resale proceeds going to TidBITS and a portion to the author.
I wonder how much someone would pay for
How about Clarus, the dogcow. I recon how much she’ll fetch.
NFTs are investments in ‘value’. A kind of feedback loop of sorts. The work exists independently. For work that is omnipresent or available everywhere at least, people have asked the question ‘where is the value in this?’. NFTs are an attempt to answer that question by providing a vehicle for value. In this it is tempting to see it as something new and hence the buzz.
Also should note that the kind of work that is widespread on these sites are outside the art market mainstream or even minor stream… My instinct is that IF it survives, it might form a parallel art world, with it’s own influencers, critics, collectors and practitioners, with its own reputation matrix and price index, quite separate from the art world as it stands. This has happened before with YouTube, there’s relatively little crossover into mainstream film and television, and they’ve formed their own universe there.
The predication of a kind of digital elite, uber-wealthy bros, who collect these, pop them in their custom VR galleries, underpins all this speculation. There’s the narrow taste spectrum, the references, the thinness of the intellectual underpinnings, all this leads down very short paths. It may simply end up as a kind of cool thing about web culture, like collecting 50s decals, or movie posters…
…or it could end up being where money moves to. The high end real estate market and art market has vacuumed up money from tech and oligarchs etc etc for a while now. They’re bored I’d say, and this is giving their consultants something to talk about.
Let’s see how it plays.
A very good point. For centuries, a significant % of art that was sold turns out to be forgeries. An excellent documentary debuted on Netflix just this week about hundreds of artworks sold by New York’s Knoedler galleries that turned out to be fakes, “Made You Look: A True Story about Fake Art,’ a fascinating $80 million con.” Most of them were really bad fakes; in one case the spelling of Pollock’s “signature” on the painting was wrong. It did sell without being questioned.
There’s also an interesting story about what was then the equally highly regarded Mary Boone Gallery. Alec Baldwin bought a painting he had admired for years before he became famous. When he brought it home it smelled like paint that hadn’t dried, and the colors looked off:
It will be interesting to see if NFT fakes will be easier or harder to identify. The vast majority of fakes are sold after the artists have died and there aren’t many people around that can verify whether or not a work is “real.”
BTW, Mary Boone was recently incarcerated for non payment of oncome taxes:
And Alec Baldwin came out ahead of the game
At least Dorsey is donating the money to a worthy cause.
It looks like a downward slide has started:
For a different point of view:
I recommend John Berger’s Ways of Seeing. Ways of Seeing by John Berger: 9780140135152 | PenguinRandomHouse.com: Books
I picked this up while in college and keep re-reading it. He covers the issue of reproductions and how there the need for having the original has more to do with status than the art.
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