NFTs - Here to stay?

You may have read the headline about a Non-Fungible Token (NFT) by artist, Beeple being sold at Christie’s for a record-breaking $69.3 million earlier this year. There are now galleries who specialize in NFTs as well as curators and museums who focus on the medium. Could this be an indication that NFTs are a segment of the art market that’s here to stay?

According to Wikipedia, an NFT is “a unique and non-interchangeable unit of data stored on a digital ledger (blockchain).” An NFT can be anything transmissible as a digital file: a work of digital art, or just an image of a work of art, an animation, GIF, or an audio recording. NFTs have been created from texts, tweets, and even song lyrics. NFTs are attractive because of their uniqueness. The “non-fungibility” means the owner of the file owns something very specific (although the artist may retain copyright and reproduction rights). Because it’s stored on the blockchain, the details of ownership, past present and future are clearly documented.

There can also be an advantage for artists selling NFTs who can potentially earn a commission each time a piece is sold. However, with high fees to post and sell on the various platforms, it can sometimes end up costing the seller more than the sale price.

For the collector, of course, there is no physical “thing” to hang on a wall or share with one’s friends and family. The digital file remains in the ether, and is therefore, susceptible to loss - whether a forgotten password, a crashed website, or failed server.

The main drawback to all of that high-security blockchain technology is the environmental impact. The energy required to power the network of computers needed for blockchain verification is staggering, prompting many artists and potential buyers to opt-out, at least for now.

Nevertheless, the idea of using blockchain technology to track an artwork’s provenance will be a great development for art historians, collectors, and art professionals, if it becomes environmentally feasible and common practice for more traditional “IRL” media as well.

Regardless of the current pitfalls, NFTs will certainly remain part of the zeitgeist of this technological era, especially “crypto-collectables” like trading cards and video game accessories. It will be interesting to see how NFTs evolve and what position they will hold in the art market of the future.