NFT technology, Harrison says, provides a way to price digital art, tapping into that overriding instinct for high-quality hoarding: the pursuit of status-granting Veblen products, coveted only insofar as they are expensive, which is behind it. of many collectors’ urgency. Mix that with a frothy community eager to trade and meme of any shiny new build adjacent to the blockchain at hefty prices and the trick is done.
“In this digital world, we have accelerators: suddenly, you could get three or four times what you paid for something; tomorrow someone is ready to buy it, ”says Harrison. Even better, blockchains can also securely and immutable keep track of how a token originated and changed hands over time. “Provenance is obviously an important part of the value of art,” says Harrison.
The crowd buying NFT-related art is diverse. Some of its members are crypto moguls looking for the newest thing to invest their savings in. “People who were early crypto and have a lot of ether [Ethereum’s cryptocurrency], they are looking for ways to use it, ”says James Beck, director of communications and content at ConsenSys, a blockchain company that has created an application to store and manage NFT. They want to show, says Beck, that they are “patrons of art on the Internet.”
It helps that some NFT marketplaces allow people to display their purchases like in an online gallery or museum. Jamie Burke, founder and CEO of blockchain investment firm Outlier Ventures and a NFT enthusiast, is one of those interested in their new role as supporters of the digital arts. Burke says he was initially put off by early cryptocurrency-focused “self-referential” artworks, filled with Bitcoin posters and pixelated memes. But when he became more interested in space, in the summer of 2020, he was “blown away” by the new artists.
“This was art in its own right that I would buy, and I liked the idea of being able to have a unique digital edition,” he says. “I started collecting, personally, and trying to get new artists and professionals who are entering the space. I’m building a little collection. “That doesn’t mean he turns down a lot when he shows up. On February 13, he sold an NFT he had paid $ 500 for, for $ 20,000 in ether. Announcing the sale in a tweet, Burke said he would use the return to buy more art.
Harrison says that while the market right now is rife with speculators who would buy and sell any blockchain-based asset in the hope that it will increase in value, bona fide collectors are getting more and more involved. “It’s a combination of people who are just speculative and people who want to collect and have something cool,” he says. “My role is to balance an element of speculation with enough people who want to buy something because they like it and want an attractive collection habit. If everyone buys to speculate, it doesn’t work, then it becomes another negotiable token. “
Some digital artists are welcoming the trend. Most platforms are easy to use, allowing them to upload their works, automatically “coin” NFT and wait for bids to come in, and these are usually higher than the sums they would receive if they tried to sell their digital artworks online or as prints. Brendan Dawes, a UK graphic designer and artist who creates digital images using machine learning and algorithms, says that a print of one of his pieces would normally sell for $ 2,000, while his latest NFT sold for $ 37,000.
The gains don’t stop there. NFTs can be designed to pay their creators a fee for cryptocurrencies each time they change hands. If a buyer of one of Dawes’ parts resells it, Dawes automatically receives 10 percent of the price paid. “That is again one of the differences compared to the traditional world. You get this ongoing royalty. “