NFTs: Now that’s what I call modern art
What do CryptoKitties, Robert Alice’s painting “Block 21 (42.36433° N, -71.26189° E) (from Portraits of a Mind)”, and a pair of Nike sneakers all have in common? Well… they utilize a specific form of token to prove ownership, authenticity, and uniqueness.
These tokens, known as NFTs (Non-fungible tokens), are providing the driving force in the digitalization and protection of scarce and collectible items. From video game drops through to real estate and art, advancements in cryptography have allowed for the creation of secure and tradeable digital identities for a whole range of goods.
A Brief History of NFTs
The first dedicated protocol to represent non-fungible assets was released in January 2018, known as [ERC-721](http://erc721.org/). It was built for the Ethereum platform and differed hugely from the types of tokens and coins that were already commonplace on the network. A standard coin in your wallet like Ether (ETH) is equal and interchangeable with somebody else’s ETH. 1 ETH is equal in all ways to another 1 ETH.
This is known as fungibility.
The same can’t be said however for ERC-721 tokens. Each and every ERC-721 token is completely unique. It simply can’t be swapped for another identical ERC-721 because they are intrinsically different and non-fungible. But let’s not get confused… they can be traded for other tokens or coins of course. But this is dependent on the value placed on it. So, what is there to do with a completely unique token that also benefits from the transparency, immutability, and security of blockchain technology? Luckily for us, a lot of incredibly interesting things.
Creativity on the Blockchain
Earlier this month, Christie’s auction house broke new ground by selling their first ever piece of crypto-art, Block 21. With a predicted minimum sale price of $12,000 (USD), the painting blew away all estimations by ultimately selling for $131,250. The piece itself is at first glance plain, but striking. Upon further inspection, it becomes obvious that the circular painting is in fact made up of numbers. A lot of numbers. 322,048 to be precise. In fact, what we’re seeing is part of the original v0.1.0 hexadecimal code used as the foundation of Satoshi Nakamoto’s Bitcoin network.
The NFT representing the token is also pioneering the use of GMT encoded states. The token has been created on Async Art’s protocol, and allows for the token owner to input the time zone where the piece is currently situated. During night time hours, the NFT’s viewable image reflects a dark state as part of the artist’s conceptual idea for the piece. The project is interesting, innovative, and insightful. The NFT is being used here as an extension of the meaning behind Block 21.
But the use of an NFT itself also provides utility along with artistic meaning.
Protecting Creators and Purveyors from Fraud
Founded in 1846, M. Knoedler & Co. had served as one of America’s longest running art galleries. Over the space of 15 years it racked up over $60 million in sales, selling pieces from such prestigious artists as Jackson Pollock and Mark Rothko. The only issue however was that a large portion of their artwork were forgeries, painted in a garage in nearby Queens, New York. Establishing authenticity is extremely important in the world of art, where incredibly large sums of money are handed over for “authentic” pieces.
So while the NFT may have started with humble beginnings that included trading collectible cats, they’re now beginning to provide security and peace of mind for art investors and collectors. To establish authenticity and proof of ownership, we can look to the following two methods:
With physical art, a piece coming directly from the artist themselves is can have its own NFT issued. For older pieces, an appraiser can first of all confirm the art’s validity and then follow the same process. The NFT acts like a digital certificate of authenticity on the blockchain. This can then be linked with the off-chain physical artwork through a number of different methods. This can include the use of RFID chips or other ways to store metadata.
For digital art, more commonly known as collectibles, the artwork itself is the NFT being traded. When the artwork is sold or sent to another collector, the token is transferred from the owner’s wallet to the new owner’s. Not every wallet can store ERC721 tokens, so a specialised one such as Trust Wallet should be used.
It’s important to understand the collectible aspect of NFT tokens for digital art. We can of course screenshot any piece of digital art we like, but this misses the point when it comes to the collectability of the piece. Think of it like a photocopied baseball card… it looks the same for all intents and purposes but it’s lost its collectible flair. More importantly for most people, it also loses its inherent monetary value.
Making Art Accessible to Everyone
The knock on effect of this unique method of digital ownership is that the world of purchasing and collecting art has been opened up to everyone. Walking into an art gallery and purchasing a painting before had significant boundaries associated with it that not everyone can overcome. Price, location, and social exclusivity made the idea of owning a painting only suitable for the most privileged in society.
NFTs are able to democratize the experience from beginning to end. Anyone can now browse the contents of vast expansive art galleries from the comfort of their own home, such as OpenSea and R.A.R.E Art. You can even buy shares in an art collection with the likes of Monart.
The best news is that we’re only just getting started. We’ve seen so much development in the space since 2018, and we can only expect more changes to come in how we engage with and experience art. In essence, the NFT opens up new avenues for our creative expression.