NFT Art: PART 2
As was seen in the previous blog (NFT Art: PART 1), it is the fact that NFTs (Non-Fungible Tokens) can represent a huge range of content, that exists either physically in the real world, or digitally, that makes NFT art so unique and fascinating. For example, memes that used to be created and distributed around the internet for entertainment purposes for free, can now potentially be created and sold as NFT art. The internet meme ‘Nyan Cat’ is an example of a more ‘traditional’ meme that was tokenised and THEN sold off as an NFT.
Nyan Cat, Chris Torres
You can view this NFT on ‘OpenSea’ here.
However, what makes NFT art so radical, is that even everyday mundane pictures and videos can take on new meaning when they are tokenised. For instance, the ‘Disaster Girl’ meme is an original photograph that was tokenised and sold for close to $500,000 (see below). The ‘Charlie Bit Me’ NFT is a video that went viral on YouTube and was later tokenised as an NFT and sold for $760,999 (see below).
Disaster Girl (Zoë Roth), 2005, $473,000
Charlie Bit Me, 2007, $760,999
Consequently, many people believe that the evolution of NFT art has ‘democratised’ modern contemporary art, because it has provided global market access to both NFT artists and NFT art collectors, all around the world. In practice, there are both advantages and disadvantages concerning NFT art that can be identified. On the one hand, NFT art accessibility is high — NFT art market platforms are plentiful and can be accessed on a 24/7 basis. This provides much greater market transparency, as compared to the traditional art market.
The extremely wide variety of NFT art that can be created also potentially empowers artists by enabling them to monetise their work more quickly and efficiently than before. Furthermore, because NFT art is represented by a secure token based on a blockchain, it is verifiable, and therefore provides authenticity of title and ownership. This can often be a complex and challenging issue in the traditional art market. On the other hand, NFT art prices can be steep, and there are relatively high transaction costs.
The high transaction costs derive from the ‘gas fees’ charged to either mint an NFT for the first time, or the fees paid to process an NFT transaction when an NFT is sold in a marketplace. In addition, NFT artists will also have to pay NFT art marketplace account initialisation fees (e.g., $50-$300), and monthly account access fees. The use of blockchain and token securitisation of NFT art produces scarcity, as NFT artworks are generally minted as either a single edition or a ‘limited edition’ collection.
However, the huge range of NFT art types has arguably led to a saturation in global NFT art markets. When we add in the fact that price evaluation of NFT art is highly subjective, and the psychological factors of owing NFT art can be highly varied (e.g., artistic meaning, financial investment, prestige), this makes it very difficult for NFT art collectors and investors to know whether the price paid for NFT artwork is realistic or not. After all, although Jack Dorsey’s first tweet sold as an NFT for $2.9 million, its value had dropped 99.9% when it was offered for resale a year later.
To be continued in ‘NFT Art: PART 3’.