NFT technology, Harrison says, provides a way to put a price tag on digital art, harnessing the primal hoarding instincts—the search for eligible Veblen items, coveted only to the extent that they are expensive—that is behind many collectors’ desires. Mix that with a frothy community eager to trade and meme every new construct adjacent to the blockchain for a hefty price tag and the trick is done.
“In this digital world, we have an accelerator: Suddenly you can get three or four times what you paid for something—tomorrow someone is ready to buy it,” Harrison said. Better yet, blockchains can also track in a secure and immutable way how tokens originate and change hands over time. “Origin is definitely an important part of artistic value,” Harrison said.
The crowd that bought the NFT-related artwork varied. Some of its members are cryptocurrency lords looking for the latest thing to enter their savings. “People who are at the start of crypto and have a lot of ether [Ethereum’s cryptocurrency], they are looking for a way to use it,” said James Beck, director of communications and content at ConsenSys, a blockchain company that has built applications to store and manage NFTs. They wanted to show, Beck said, that they were “the patrons of the art on the internet.”
It helps that some NFT marketplaces allow people to showcase their purchases like in online galleries or museums. Jamie Burke, founder and CEO of blockchain investment firm Outlier Ventures and an NFT enthusiast, is one of those interested in their new role as digital art advocate. Burke says he was initially turned off by the early artwork, a cryptocurrency-focused “referential” — full of Bitcoin signs and pixelated memes. But as he became more and more interested in the outside world, in the summer of 2020, he was “fascinated” by new artists.
“This is art in its own right that I will buy, and I love the idea that I can have a unique digital edition of it,” he said. “I just started collecting, personally, and trying to get new artists and professionals coming into space. I’m building a little collection. That doesn’t mean he turned down a good offer when it presented itself. On February 13th, he sold the NFT he had paid $500, for $20,000 in ether. Announce sale on tweet, Burke said he would use the returns to buy more art.
Harrison said that while the market is currently full of speculators who will buy and flip blockchain-based assets in hopes of increasing their value, bona fide collectors are getting more involved. “It’s a combination of people who are just speculative and people who want to collect and own something cool,” he said. “My role is to balance the element of speculation with enough people wanting to buy something because they love it, and they want hot collectible habits. If everyone buys to speculate it doesn’t work, then it just becomes another tradable token.”
Several digital artists are embracing the trend. Most platforms are easy to use, allowing them to upload their work, automatically “print” the NFT, and wait for an offer to arrive—and this is often higher than the amount they would receive if they tried to sell their digital art online or as a print. Brendan Dawes, a British graphic designer and artist who creates digital imagery using machine learning and algorithms, says a print of one of his works typically retails for $2,000, while his latest NFT retails for $37,000.
The advantages don’t stop there. NFTs can be designed to pay their creators a cryptocurrency fee each time they change hands. If the buyer of one of Dawes’ goods resells it, Dawes automatically receives 10 percent of the price paid. “That is again one of the differences when compared to the traditional world. You get this ongoing royalty. ”