How are NFTs changing the norms of the art market?

 What is an NFT?

Before we delve deeper, let's remember what NFTs are . The acronym stands for “Non Fungible Token” or “Non Fungible Token” . Specifically, an NFT is a digital object such as an image, a GIF, a video, etc. The main characteristic of an NFT is to be “non-fungible”, that is, unique. But how can a digital image that can theoretically be copied infinitely be unique?

This is where the concept of “token” comes into play. What is a token? Each NFT is associated with a token. This token contains the main information related to the NFT (its owner, its price, its description, etc.). This token is recorded on a blockchain , similar to a public ledger. This token is unique in the sense that it has its own identifier. Through this token, the NFT becomes unique, even if the image (in the case of an image) of the NFT can be copied.

Thanks to this tokenization system, NFTs have achieved the feat of creating rarity in a digital realm that is essentially replicable to infinity … Do you understand the concept? With this feature, it's easy to understand why NFTs and art were destined to meet.

How are NFTs changing the norms of the art market?

We have already explained what an NFT is, but what is an NFT in art? What role do non-fungible tokens play in the artistic world?

Even if you are not an expert in the field, you surely know that the authenticity and rarity of a work are the main criteria sought by art lovers. With tokenization and blockchain , NFTs are perfectly suited to meet these two key criteria. In other words, NFTs and digital art complement each other perfectly, giving rise to a new concept of modern art.

NFTs and art: a new digital art market

A truly parallel digital art market has emerged alongside NFTs . Marketplaces have made it easier to sell and exchange artistic NFTs from person to person, that is, without intermediaries. With the rise of NFTs, prices have skyrocketed. Several NFT sales have reached million-dollar sums. For example, in March 2021, the work Everydays: the First 5000 Days created by American artist Beeple sold for a staggering $69 million . Imagine, an NFT digital artwork sold for $69 million! To understand the magnitude of the event, you should know that with this sale, the artist Beeple became the third most expensive living artist. The first two are Jeff Koons and David Hockney, who offer material, non-digital works of art.

In reality, the potential of NFTs in the field of art is immense. First of all, unlike the traditional art market, it is easy to get into the world of NFTs.

In fact, anyone can enter the world of NFTs. If the work in question finds its audience, the owner can earn a lot of money and, above all, notoriety in the field. Thus, NFTs have allowed a whole new wave of artists to emerge.

But NFTs are also very useful for artists already known and present in the traditional market. In fact, NFTs represent a way to diversify artists' offerings , increase their income and reach a different audience. Some artists have understood this very well and have digitally reproduced some of their works to "convert" them into NFTs. From this point of view, NFTs are an excellent marketing channel for an artistic sector that is often synonymous with a certain exclusivity. The same principle can be applied to museums and other cultural institutions that can reproduce some of their works in NFT form at will.

Traditional art market players want to get into NFTs

The NFT boom in 2021 was such that the capitalization of the field reached $41 billion . Inevitably, the actors in the traditional (material) art market could not remain indifferent to this new phenomenon for long. Auction houses, artists and even museums are increasingly getting closer to the world of NFTs. Some have even already taken the step.

For example, the Hermitage , the famous museum in Saint Petersburg, offers some of its works in the form of NFTs. This is the case of the Madonna Litta by Leonardo da Vinci or the painting The Corner of the Garden by Claude Monet . The British Museum has also marketed digital reproductions of some of his works in the form of NFTs.

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The same goes for auction houses. For example, the famous British auction house Christie's started selling NFTs. Thus, in 2021, Christie's sold the equivalent of $150 million in NFTs . Imagine, a major player in art sales founded in 1766 is now selling NFTs. It is clear that NFTs are not a simple bubble, but rather represent a new type of art .

«Beyond our results in auctions and private sales, which are exceptional, Christie's has also ventured into new sales formats and categories, including NFTs. “They have allowed us to present works by new emerging and underrepresented artists and reach a new, younger audience.” –Guillaume Cerutti, CEO of Christie's.

NFTs, much more than a new contemporary art

So are NFTs a new form of contemporary art? Certainly, some are directly related to contemporary art. But this is not the case with most NFTs. For example, it is interesting to take a look at the main NFT collections today. Some of them are CryptoPunks, Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC). These collections are the best known and some of their NFTs have sold for several million dollars. Many celebrities own some of these NFTs.

 In fact, these NFTs were created by computer. These represent a portrait, mostly that of an ape. Some NFTs, like those in the CryptoPunks collection, are highly pixelated.

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