NFT fever: now they are worth as much as traditional art
The eyes of Melania Trump, the goals of Chiesa, the cover of the Economist: 2021 was their year. And Samsung launches dedicated TVs
By Nadia Boffa
It was March 2021 and in a Time article the title stood out: “What are NFTs and why they are revolutionizing the world of art”. It was the beginning of the year and only a small niche of people knew what NFT, Non-Fungible Token, were, a special type of cryptographic token that represents unique and recognizable digital objects. We are now at the beginning of 2022 and what Time was telling has actually come about. The world of NFTs has shaken the world of art. In 2021, buyers of works of art spent almost as much on digital collectibles as they did on traditional art. As reported by the Financial Times at the end of the year, it emerged that almost 41 billion dollars were spent on NFTs. The market for works of art and digital collectibles has almost reached the value of the global art market.
“This year I have seen the NFT market explode from under a billion to tens of billions,” Mason Nystrom, a research analyst at cryptographic data group Messari, told the Times.
NFTs began invading the art world last March, when the prestigious auction house Christie’s beat the hammer at $ 69.3 million for “The Last 5000 Days”, a digital artwork, in Jpg, signed by Mike Winkelmann, better known as Beeple. The artist himself was amazed by the value for which his work of art had been purchased. Since then, the success of NFTs as contracts for works of art has not stopped. In fact, the two worlds are well linked and NFTs also contribute, in a certain sense, to protecting the world of art. In fact, digital tokens function like a contract and through them it is possible to establish who is the owner of the digital object. They are similar to certificates of authenticity and are registered on blockchain, a public digital register and therefore open to all and which cannot be modified or tampered with. Tokens, in addition to providing proof of ownership of the digital object, also guarantee its scarcity and it is above all for this reason that they protect the world of art. Usually everything that is digital can be reproduced indefinitely, but with NFTs this is not the case: tokens make it possible to distinguish the copies from the original and demonstrate, through the blockchain register, who is the owner.
NFTs also protect those who produce art. Digital contracts allow you to reward artists with resale royalties. In fact, every time a digital work is purchased, the artists receive a percentage that is inherent in the contract. Artists who want to sell their work as an NFT must register in the market, then “mint” digital tokens by uploading and validating their information on a blockchain, which is usually Ethereum, a rival platform of Bitcoin, which is the most used for the purchase of NTF. Registering and uploading your information to Ethereum usually costs between $ 40 and $ 200. At that point, artists can then put their works up for auction on an NFT market, similar to eBay.
According to research by Chainalysis, a group of cryptographic analyzes, in total, from the beginning of the year until December 15, 40.9 billion dollars were paid into the Ethereum blockchain contracts. The total, as reported by the Financial Times, would be even higher if it included NFTs coined on other blockchains, such as Solana, another decentralized finance platform whose success has grown in recent months. To make a comparison, in 2020 the world of global art was worth 50.1 billion dollars according to data from UBS and Art Basel, a figure down 22% compared to 2019 and 27% compared to 2018.
Financial Times The explosion in popularity of NFTs in 2021
Art Basel Sales in the global art market between 2009 and 2020
A big market for the few
However, Chainalysis also discovered, thanks to his research, that NFTs have introduced a huge number of retail investors to the world of cryptocurrencies. Small transactions, under $ 10,000, represent over 75% of the market. Just like the cryptocurrency market, the NFT market remains dominated by a few large investors. Also according to the same cryptographic analysis group, between the end of February and November, there were 360,000 NFT owners who held 2.7 million digital tokens between them. Of these, about 9% held 80% of the market value, according to Chainalysis.
Some retail investors approach the market as professional trader-collectors. A well-known NFT investor known as Pranksy on Twitter started with an investment of $ 600 in 2017 and now has an NFT portfolio worth over $ 20 million. Pranksy told the Financial Times how his investments work. In fact, the trader invests in projects of a different nature, “some of which have a higher daily trading volume and others that have a more niche appeal,” he explained. Pranksy then stated that he also has some specific works that he “intends to keep as long-term investments”.
One thing to note, however, is that until now, as analyzed by the Nansen blockchain research platform, most of the new NFT collectors on the secondary market have yet to recover the costs of their purchases.
Financial Times The NTF market is concentrated in the hands of a few
In addition to the already evident difficulties of minor investors, there are also some benefits enjoyed by great collectors. In fact, in recent times the NFTs linked to the most famous works have significantly increased in price.
In short, the world of NFTs linked to works of art, despite various protections, is still plagued by fraud, scams, as well as market manipulation. This is mainly because the real identities of buyers and sellers registered on the blockchain are difficult, if not impossible, to discover. Nansen’s analysis found $ 2 million worth of suspicious activity in the CryptoPunk and Bored Ape collections over 30 days, from mid-November through mid-December. Some NFTs, for example, have been sold at 95% off the average selling price, due to buyer and seller errors, tax reversals, or other scams taking advantage of unskilled users.
Financial Times Many of the NFT collectors have not yet recovered
Some researchers explain that another art-related risk of the NFT market is that it is inflated by the “wash trade”, a form of market manipulation in which an investor simultaneously sells and buys the same financial instruments to create misleading and artificial assets on the market. market. The wash trade can be carried out, for example, to artificially increase the volume of trading, giving the impression that the tool is more in demand than it actually is. And that’s what often happens. “You can buy and sell an NFT on a public platform and make it seem like there is a lot of interest in the work, when in reality it is only you who decide to raise the price,” Rüdiger K Weng, chief executive of the company, told the Financial Times. Weng Fine Art, an e-commerce platform for graphics and sculpture based in Germany. “This can also happen in the world of traditional art”, added Weng, “but in that case, if an investor who wants to manipulate the market delivers a work of art to Sotheby’s (one of the most important auction houses in the world) and tries to carry out the wash trade, he will have to pay the auction house 25% of the sale. A very expensive business “.
Not just works of art: everything can become NFT
Risks or not, the art-related NFT market is maturing. Indeed, it partly filled that void in the commercialization of traditional art aggravated by the pandemic. The thrust of online collectors has made it possible to restore vital lymph to the entire sector. The artists themselves feel they can bet on such digital contracts to be able to collect royalties forever. An emerging artist, 20-year-old Jazmine Boykins, was publishing his works of art online for free just a few months ago. Once the non-fungible tokens were discovered, “BLACKSNEAKERS” – this is the name of the artist on the web – earned more than $ 60,000 from works of art in NFT between 2020 and 2021.
Those who believe in the NFT market know that soon they could come to designate any type of virtual good. Be it clothes for digital avatars or art. And they will be even more useful when they feed e-commerce in the metaverse, a persistent digital space that never goes offline, where people enter and leave it freely. A reality that continues to exist independently. And where then the NFTs will help to personalize one’s virtual existence. If instead we stop at what they are now, we can still say that NFTs have gone beyond the world of art. The success of digital tokens began with the sale of the digital work “The Last 5000 Days”. But this year sportsmen, musicians and politicians have approached the NTF world. The NBA, the United States basketball league, has created its own NFT marketplace for buying, selling and trading video highlights of its players, called the NBA Top Shot. About two months ago, the economic newspaper “The Economist” had even put up for sale as NFT a cover created precisely to explain to readers what digital tokens are. But also Melania Trump, former First Lady of the USA, has just recently decided to sell her cobalt blue eyes in the form of a non-fungible token. The watercolor will be available for purchase until January 31st. It is called ‘Melania’s Vision’ and is a creation of the French artist Marc-Antoine Coulon. It costs around $ 175, depending on market changes. “I am proud to announce my new NFT project which represents my passion for the arts and will support my ongoing commitment to children through my ‘Be Best’ initiative,” wrote the former First Lady on social media.
The Economist The cover put up for auction as NTF
melaniatrump.com Melania Trump’s NTF
And then there is British singer Ozzy Osbourne, who announced his first collection of 9,666 NFT bats called CryptoBatz, which will be available from January 2022. Presale is open on the Discord channel. The collection is inspired by the famous episode in which the then former Black Sabbath singer, during a solo concert held on January 20, 1982 at the Veterans Memorial Auditorium in Des Moines, with a bite took the head off a dead bat thrown on stage by a fan. These CryptoBatz will be able to “bite and mutate” other collections of tokens, combining characteristics of different tokens and thus creating other NTFs called MutantBatz. Each CryptoBatz will only be able to bite NFTs from certain selected collections. “I had been trying to enter the world of NFTs for a while and I decided to create my own collection,” said the artist. “CryptoBatz is a crazy project for NFT fans and collectors. The design is a tribute to one of the most iconic moments of my life on stage, it is an opportunity to buy a piece of history. I love them, “added the artist.
NFTs have also invaded the world of technology. Samsung has launched a new platform with which it brings NFT content on board its latest Smart TVs. Called “Nft Aggregation Platform”, the gallery with an online shop will be available soon for the Korean group’s range of MicroLed, Neo Qled and The Frame. On these, it will be possible to browse the main sites that offer NFT and add the works to your personal collection, which will be the background to the televisions, when not in use, thanks to the artistic features that distinguish the three families of models.
Digital tokens have also taken over our home. The Juventus and national team player Federico Chiesa was one of the first players to launch his NFT. He did it in collaboration with the Kreation platform, built on the Solana blockchain. The NFT is a rare collector’s item designed by Chiesa and inspired by his experiences and his recent European Championship victory. It was auctioned on Kreation on December 29, 2021 at 3:00 pm and the auction will end on January 12, 2022. “I’ve been following NFTs for a long time and was fascinated by the explosion of this market. So when Kreation offered me this special opportunity to become one of the first footballers in the world to release my NFTs, of course, I was happy to venture into this collaboration, ”explained Chiesa. The winning bid and the 4 closest bids will receive the Azzurri’s Euro 2020 championship shirt signed by Chiesa.
They ignore the cryptographic crisis and the ability to reveal all encrypted information.
Not only with quantum computers but also with hacker attacks, as explained on this site and on the site www.technosolution.org