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Switch on to NFTs

Shedding light on the key takeaways around the latest revolution in tech and new media art

If you remember one thing about this article then let it be the following: More than a new what NFTs represent a new how.

Non Fungible Tokens are a way to prove ownership of things, any things – immaterial ones included, which is the interesting part for digital artists: for the first time they can pin their creations down in virtual reality, sign it and sell it to the highest bidder. A commodification previously reserved for physical art at fine art institutions. This expansion of the art market makes room for memes, gifs, tweets and mind tingling digital artworks to be traded in their own right and earn their creators a living. This revolution has resulted in an opening party at the intersection of art and tech and the banners say NFT.

What, exactly, is an NFT?

 

Information Technology

  • Behind the screen you’re scrolling from is a system of information (This much you know).
  • Electronic beads of data fire off at every click of your finge
  • A Non Fungible Token gathers those beads in a unique formation
  • and in a given network of computers, each one updates to verify two important things
    1. that the information is indeed unique – creating authenticity and
    2. that it was authored by you – creating trackable ownership
  • Before a chain of computers could perform this automated consensus, at the end of the line was centralised (ultimately human) verification – a highly corruptible glitch in the system.
  • Now no longer at the centre of keeping track of transactions, we’ve arrived at self checking, decentralised records of exchanges
  • the latest evolution in information technology known as blockchain.
  • It is this modern framework of incorruptible tech that can generate NFTs
What does Non Fungible Token mean?

 

Non Fungible Tokens

  • Fungibility comes from the word function, or to perform
  • When two things have the same function, they are fungible
  • Money is fungible. 2 different Euro coins can do each other’s job. The values are interchangeable
  • Non Fungibility is when the function to exchange one thing with another is not there, making that one thing unique
  • For example, take one of our Euro coins, melt it down, have a well known artist create a tiny sculpture, add time and a layer of meaning in collective retrospect, now it has surpassed its value as
  • a coin and becomes a unique piece, it is no longer interchangeable with the other coin – it is non fungible and worth more because we all agree it is one-of-a-kind.
  • The collective agreement is important – the gold that is connected to coin and paper money has value because that is what was agreed upon.
  • With blockchain technology, this collective agreement is automated through a simultaneous nod between participating computers
  • this action creates a consequent arrangement of unique code called a block
  • This block of one-off coded information can correspond with, well anything, but the space it has cleared for digital things is new: Digital files are easily copy-pastable all over the internet, but
  • now that you can link an original file to a unique block of code, there’s a way to prove you own the file that counts
  • Backed by the blockchain, digital art can be commodified via a virtual stand-in, a token of originality – a Non Fungible Token.
Where do NFTs live?

 

Immaterial Marketplace

  • With the global pandemic locking us out of the physical world we inhabited new spaces online
  • Think Zoom gatherings, worldwide Instagram protests and the strategic digitisation of every commercial industry.
  • This increased virtual presence converged with the principles of cryptocurrency being applied to crypto art
  • With proof of ownership and computer generated exclusivity a new marketplace for immaterial things emerged
  • As a result digital art arrived at a commercial coming of age – for the first time there was a way to sell it in a place of its own nature
  • Indigenous to the internet, memes, gifs and brain tingling visuals could now be monetised aside from merely popularised through viral status and likes
  • The creators who make non-physical art now have a place to go – an NFT marketplace platform – and trade directly with other cryptoverse citizens

The Art Market

  • The physical art market values an artwork based on many things – who made it? What have they made before? During which time? Is it skillful? Does it compel an audience? And notable here – is it original?
  • Satisfying answers to some of these questions existed for digital art, just not the ones that would matter for trade:
  • Proof of originality and exclusivity – why buy something that’s copy-pastable for all?
  • Pinning pixels and vectors to an NFT takes care of that like a signature on a painting. No matter how many prints or replicas are made, the signed original is worth most
  • The mental hurdle traditional art institutions had to jump was from physical ownership to virtual ownership: At the end of the day you need a screen to display your artworks, and if you forget your charger there’s nothing to see
  • However – physical art has always transcended the material by the strength of the idea behind it, and its reflection of the times
  • Perceiving that reflection is a community, recognising an articulation of something ungraspable
  • Art is at home in the immaterial, in a feeling, in disruption, in expressions of cultural consciousness
  • As much as real world currency, the value of art is linked to social currency
  • The NFT market is a place for buying into the ideas of tomorrow
  • The buyers find themselves on new terrain in creative commerce – underpinned by decentralised tech and enriched by digital art

Technically, where though?

  • An NFT is produced via a process called minting on the blockchain – the actual file it represents is stored on an IPFS, a decentralised server
  • When metal rounds are minted they become money, when NFTs are produced on the blockchain they become a product – tradable, own-able
  • The minting process is facilitated via an NFT marketplace, like OpenSea, Foundation, Object, Aorist and many more
  • On the Marketplace, minters create an account, connect their Crypto Wallet, upload their art and set its smart contract
  • An NFT also lives in the actions laid out for it in it’s smart contract: here, terms are set for the sale and resale of NFTs, earning the artist royalties for as long as the system exists
  • This introduces unprecedented agency and a revolution in revenue for artists
  • For this service, the marketplace charges a fee (upfront investment cost for the NFT minter)
  • Gas fees are also charged – marketplaces pay cryptocurrency for the computational power it takes for individual computers to mine blocks on the blockchain (it’s method of decentralisation)
  • Once the NFT is sold it goes from the minter’s wallet to the wallet of the Collector
  • The IPFS (InterPlanetary File System) holds the jpg, gif, Mp4, etc

Artwork: Gollie, Harm van den Dorpel 2021
Mutant Garden Seeder Specimen 21/512+1
Gollie was born on block tel:12651086 and mutated 2 times

Who are the key players in the NFT game?

 

Artists

  • The artists ready for this NFT moment are digital creators who have mostly already been working in obscurity
  • They’ve been celebrated in likes, contributing to culture and entertaining – but not getting paid
  • Their day jobs as developers or designers have been paying the bills but their personal expression had been relegated to hobby status and not traded in its own right
  • You will have seen their collaboration work in films, music videos and for sure at concerts and music festivals
  • Like the street art movement worked its way from the periphery to the mainstream – digital art gets sprayed onto the bricks in the blockchain, tagged by the artists to create an nft, and elevates its creators from artsy vandals to paid prophets of the city
  • Key artist names to know, in this particular order, are:
    Cryptopunks: The earliest NFT art collection, launched in 2017 by Canadian software developing duo Larva Labs. Originally released for free on the Ethereum blockchain, these 10 000 characters are now used as PFPs, Profile Picture NFTs, and collected as highly priced status symbols.
    Cryptokitties: A blockchain game on Ethereum since 2017, developed by Canadian studio Dapper Labs. As one of the first to use blockchain technology for recreation, virtual cat characters can be bought, bred and traded among a community of cryptoverse players.
    Harm van den Dorpel: A Dutch artist creating digital art since the early 2000’s. In 2015 the Viennese MAK museum bought his screensaver artwork, Event Listeners, with bitcoin, gaining him pioneer status. His current NFT collection, Mutant Garden Seeder, consists of 512 ‘mutants’ which change based on terms written into its smart contract – truly making it NFT generated art
    Rafaël Rozendaal: Among the first to sell immaterial digital artworks, the Dutch-Brazilian artist has been creating websites as art objects since 2001. Sending collectors physical certificates and backup discs holding the files, he intuited a process now automated and commercialised by NFT’s.
    Beeple: In collaboration with fine art auction house Christie’s, the graphic artist put NFT’s on the commercial map when a single jpg, ‘Everydays – The First 5000 Days’ sold for 69 million dollars in 2021. This catalysed a hyper lucrative market for NFTs and brought traditional art institutions on board.
    Bored Ape Yacht Club (BAYC): A collection of 10 000 illustrated ape characters developed by 4-man developer studio, Yuga labs. A BAYC NFT comes with Intellectual Property rights (not standard for all NFTs), allowing the owner to use their ape for commercial purposes. The token also grants exclusive membership to a virtual vip lounge made up of celebrities and wealthy patrons across the globe.
  • The emerging NFT marketplace makes room for a new breed of artist with technological tools – digital creators using pixels and programmes to paint the classics of today.
  • A painting on a wall has a locality to it, digital works travel easily online to a worldwide cryptoverse audience. An NFT creator in Berlin can sell well in China, shifting markets and also giving rise to a new breed of collectors.

Collectors

  • The peer-to-peer feature of decentralisation makes it so that community building is key in sales of NFTs
  • The artist now engages directly with their market, the collectors
  • More than the jpg, a collector buys into a narrative – about the art, it’s aesthetic, the artist, the method and increasingly important – the online following
  • During the minting process, the naming of NFTs and providing of background information is set up to communicate the work’s value
  • The art is then released as one offs or auctioned off in collections to the highest bidder on a chosen marketplace
  • To promote the sale artists can create buzz on social media, eg. Twitter, Instagram and Discord (a decentralised social network), cultivating a community around the work and the persona behind it
  • This digital democratisation of the art market makes a customer out of a follower – elite, one no longer has to be, a crypto wallet with cryptocurrency is the bar to entry (some marketplaces even process credit card)
  • Besides existing art collectors now switching on digital wallets to invest, the cryptocurrency rush produced many young cryptollionaires, with funds not yet streamlined to be easily spent everywhere
  • NFTs present not only a way for them to splurge, but also to connect to the cryptoverse community, forming a future-forward identity around these collectibles
  • Using Cryptopunks as profile pictures is equivalent to hanging a valuable painting on your wall – it’s rare, it’s expensive but with kitties, punks and apes it retains some of the internet’s nonchalance and revives a current of playfulness in the art world – putting the fun in fungible ( 😉 )
Why is this NFT moment important?
  • Technology reflects us, flaws and all
  • Transitioning from the internet to a metaverse (a virtual extension of our reality) will simply populate a new space with whomever we truly are
  • decentralised systems can make for an unregulated wild west with much to be gained and much to be lost
  • The creation of digital scarcity mimics a supply-and-demand resource scramble characteristic of capitalism
  • Economic history shows a resulting pattern of unequal pooling of resources for a small elite
  • Think overarching tech companies starting out with a ‘connectivity’ imperative and playing monopoly with our accumulated data the more connected we became
  • At the centre of what will result in an eventually stable, sustainable NFT marketplace is our collective why
  • Why are we here and why are we going? If we keep the answer about broader access for all we’re headed someplace new
  • If we re-inscribe existing elitism the newly opened doors will loop back to places we’ve been before
  • Preventing this requires collective consensus of the human kind, cultivating a new media consciousness through inclusivity, education and imagination
  • Awareness of the uses of centralisation should also not be muted – with unconscious behaviours in any reality, regulatory bodies will arise to maintain balance
  • NFT marketplaces have already seen the first infringements on, for example, intellectual property. Due to the lack of uniform regulation, an NFT minter may not be the original creator of a piece, resulting in fraud.
  • This is difficult to correct when content deletion goes against the unalterable nature of the blockchain
  • This emerging moment in the creative economy throws our values up in the air, and as the moving parts hover overhead there is a chance to get in place and decide which pieces to roll with when it hits the ground running
  • But why? Because more than a new what, NFTs represent a new how:
  • Beyond the tech this moment offers another chance to move through economic ecosystems – together
  • As art reflects the times, presenting the ever-changing now, our technologies reflect glimpses of possible bright futures – how we get there is up to us
  • Decentralisation refers to self-governing interconnected systems – more than to an end (selling stuff) this moment clues us in to a means
  • The medium is the message, the time is now and the fun in fungibility is embedded in how.

For further deep-diving:

For specific insight into our role as new media art custodians watch our founder and director, Merel van Helsdingen, speak on the ‘Curating Digital’ panel at Art Basel 2021.
For further digestion of NFTs in the art world, our curator, Jesse Damiani speaks on the subject here, here and here.

Future Art Ecosystems (FAE)
Jesse Damiani – “A Crash Course In NFTs + Simulation Theory” AD
Monopol – Kryptokunst
CNN Style- How to buy art today?
A complete guide to minting NFT’s
Foundation Help Center
The Blockchain Primer That George Washington Would Understand
History of Crypto Art
NFT News today
What is Bitcoin mining and how does it work?
Documentary – The NFT Boom – Why CryptoPunks Mooned
12 NFT Marketplaces To Be Familiar With Right Now
Financial Times 
NRC – NFT’s zijn de hype van 2021 en zijn miljoenen waard. De vraag is nu: leveren ze al goede kunst op?
Web3 – Prof Galloway 
Decentralization and the Lack of Regulation in NFT Marketplaces
What do you buy when you buy an NFT? – Protocol

 

Content Category
Brain feeder
author
Team Nxt
date
11 Feb 2022