The NFT (non-fungible token) industry has seen a significant rise in popularity and value this year. With average monthly sales increasing from roughly $400 million a month at the beginning of the year to a sizeable $2 billion a month, it is estimated that the industry is now worth a whopping $7 billion.
The widespread interest in NFTs has had a skyrocketing effect on the digital art scene, demonstrating its potential and allowing unseen artists to share the spotlight.
Defining Moment For The NFT Market
The co-head of digital art at Sotheby’s London, Michael Bouhanna, described the following events as a defining moment for the NFT market. In September 2021, US$26.2 million worth of NFTs were sold creating a milestone achievement in the ever-growing NFT market.
The first of the sales was for a collection of 107 images of cartoon apes, part of a larger 10,000 piece collection of computer-generated cartoon apes, titled the “Bored Ape Yacht Club”. Through an online Sotheby’s sale, the price reached a staggering US$24.4 million. Then later that day a second collection sold for an impressive US$1.8 million, this time 101 “Bored Ape Kennel Club” NFTs.
This comes after CryptoPunk’s significant rise in value. What started in 2017 as a collection of pixelated faces has turned into a lucrative endeavour, with the latest CryptoPunk NFT selling for $928,532 USD (217 ETH). CryptoPunk #5169 is one of 10,000 CryptoPunks created, each with its own unique attributes.
Alongside CryptoPunks, CryptoKitties, the above mentioned Bored Ape Yacht Club, and the sale of Beeple's “Everydays: The First 5000 Days” are attributed with starting the NFT craze that grasped 2021.
Beeple's “Everydays: The First 5000 Days” is a digital artwork piece created using 5,000 images that Beeple (Mike Winkelmann) created each day from May 2007. The digital artwork became the most expensive NFT ever sold and the most expensive art piece sold by a living artist today. The NFT was sold in March 2021 for $69.3 million at Christie's.
NFTs Birth A New Age Of Art
Since blockchain integrated itself into the digital art scene, the space has ignited in both value and outsider interest. With NFTs establishing themselves in mainstream media, blockchain technology once again gets a share of the spotlight.
So what are NFTs? NFTs are non-fungible tokens that are unique in their make-up. Comparing NFTs to Bitcoin, BTC can be used to pay for goods time and time again, however, an NFT will only ever have one sole “function”. These tokens are perfect for the tokenization of goods, whether luxury items or digital artworks, as they represent ownership in an immutable manner.
Build on the blockchain, this ensures that all transactions of ownership are recorded in a chronological, immutable manner and also with full transparency, allowing anyone access to the records at any time.
Another advantage to tokenizing artwork with blockchain is that artists can implement a code that automatically pays them royalties whenever the piece is resold, a significant step forward for artist’s compensation otherwise poorly managed in the “real world”.
Advantages Of Tokenizing Art With NFTs
As we further explore the advantages of NFTs in the art space, below are several factors contributing to the success and inherent value of merging art with blockchain technology.
Through the use of NFTs, artists are able to access markets that were otherwise controlled by centralized organisations. Content creators now have a global platform that can be accessed from anywhere by anyone.
- Verifiable Ownership
Taking a giant leap forward in terms of ownership in the traditional art world, NFTs hold all ownership history in public records. Through the use of blockchain technology, anyone can access the ownership rights of an NFT, also making it possible to verify the artwork’s authenticity.
As mentioned earlier, no one can tamper with data on a blockchain, once it is recorded it cannot be edited or changed.
When an artist creates an NFT they can include a clause in the code to ensure that each time it changes hands they receive a portion of the sale money. Decentralizing resale royalties puts the power back into the creators’ hands.
NFTs Continue To Ignite The Digital Art Scene
It’s also important to note that NFTs aren’t designed to replace art, instead, they are here to enhance the artwork space, celebrate artists and grant solidified ownership. While some believe that NFTs might be a bubble, the truth is that they’ve done wonders for the exposure of digital artists, the evolution of the art world as well as further integrating blockchain technology into the everyday world. After all, Collins Dictionary named "NFT" the Word of the Year for 2021.