The Cryptocurrency world develops every day and is a true technological marvel. From existing as a digital form of currency, currently, the world is witnessing the surge of digital collectibles that are nothing but unique virtual tokens which can represent anything from crypto art to sports memorials. The difference between Bitcoin and these tokens (also called NFT), is that each of these tokens is distinctive and cannot be replicated. They are stored in digital wallets as collectors’ items. Thus, these NFTs have found their place in not only art and sports but also virtual real estate and gaming.
Nadya Ivanova, the chief operating officer of BNP Paribas talks about how these collectible digital assets can be characterized as an advanced version of an MP3 file.
“It’s allowing content creators to actually own the property rights for what they create, which allows them to profit from it in different ways which they can’t do with physical art”, she says.
But essentially it is digital art that has gained the most momentum. This special identifier exists in the form of a non-fungible token (NFT), on the blockchain, and only the owner of that particular NFT can own that piece of crypto art.
There are different ways artists can showcase their crypto artworks. It can be done through their online profile which includes their website, social media accounts, etc or it can be displayed on a screen, such as a TV or a tablet to show it in a physical form.
How are the transactions made in crypto art?
Non-fungible tokens (NFTs) are digital tokens connected to an asset (artworks, sports trading cards, videos, tweets) using blockchain technology, which includes the details regarding the origin and the authenticity of the artwork. This brings to you the concept of “digital scarcity”, which issues a limited number of copies of an artwork with a unique token (a unique string of numbers that can be used as a digital representation of a physical asset).
The sales are held on platforms such as SuperRare and Nifty Gateway. Nifty Gateway, which was started last March is owned by Gemini (the company founded and operated by the Winklevoss brothers). The market has thus grown tremendously creating attraction and attention in the mainstream global market. This is mainly credited to the artist known as Beeple (real name Mike Winkelmann).
The artwork is presented in “drops” – online sales that usually happen in two ways.
The Globe and Mail reported, “Buyers can purchase an open edition (think of it as a numbered print, in traditional art terms). Each edition is sold at a set price, but purchasers have only five minutes to buy.” “ The other part of a drop is the auction of a 1/1 edition, a single unique work. Bids for those are taken for 23 hours”, it added.
Thus, on Wednesday, an artwork of Beeple’s was purchased in the secondary market through Nifty Gateway for a massive amount of US$6.6-million. Every artist through a sale of crypto art earns in two ways. Unlike the fine art world, the artists in the digital world are paid for the original sale, and also earn a percentage of secondary sales; which is usually 10 percent is standard. It is important to note that the platform also receives a cut on both primary sales and secondary sales.
Tommy Kimmelman, head of artist relations at Nifty Gateway commenting about the buyers on this space, said, “It’s largely technical-minded people who inherently understand how this stuff works. But we are starting to expand into other demographics.”
The rising popularity of Blockchain Art
Blockchain art comprises diverse art forms from bitcoin graffiti art to artworks such as The Last Bitcoin Supper by French artist Youl, which sold for nearly $3,000 on eBay in 2014. The Indian Express stated that according to news sources the total value of this art market has peaked around $80 million, with over 60,000 artworks sold so far. Beeple, who is one of the most popular artists is estimated to have sold artwork worth over $7 million. Other noteworthy digital artists include Pak, Trevor Jones, and José Delbo.
This has also witnessed the emergence and thriving of several digital market platforms like such as Zora, SuperRare, Foundation, and Nifty Gateway.
Tommy Kimmelman too, emphasized the rise in popularity of crypto art as Nifty Gateway did about US$8.5-million in sales in January and, experienced a major jump, to more than US$50-million in February.