Changing the rules of the game in the art industry, can NFT bring a brighter future?

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This article from the author: Andrew Singer

Historically, it is almost impossible for digital art to be monetized, but now, blockchain technology seems to be able to “solve” this problem.

On September 23rd, Christie’s, one of the world’s largest auction companies, announced that it would exhibit the “Portraits of a Mind” Bitcoin-themed series of artworks on October 1-6, 2020 at Christie’s New York Gallery. 21 works will be officially auctioned on October 7. According to Ben Gentile, the creator of this work, the reason for the auction of the 21st work is that the total supply of Bitcoin is 21 million, and the work has an associated non-homogeneity (NFT). Tokens ensure the authenticity of works by connecting the real world with the digital world and give collectors unique ownership. It is worth mentioning that this is Christie’s first auction of blockchain works, and it also created a first auction for Christie’s.

At the same time, Anthony Pompliano, co-founder and partner of crypto investment company Morgan Creek Digital, is very interested in this auction. He not only publicly stated that he is very optimistic about the digital art industry, but also claimed that “the market value of digital art will continue to grow, and it will eventually More than the physical art industry, although it sounds ridiculous today.”

For now, we find that the digital art market has indeed begun to heat up.

Duncan Cock Foster, co-founder of digital gallery Nifty Gateway said:

“The digital art industry is developing at an alarming rate, and the growth rate we are seeing now surprises everyone in the encryption field.”

However, there are some special reasons why the digital art industry can break out in 2020. After all, this year’s global new crown virus epidemic has prevented people from traveling, and many art galleries and art galleries have also been forced to close. , You can interact with artwork on your phone, and you can easily send images/videos back and forth-without a doubt, digital art is very suitable for this period in history.

Blake Finucane is the co-author of the NFT art paper “Crypto art: A decentralized view” (Crypto art: A decentralized view). He once believed that the problem with digital art is that it is almost impossible to be monetized because if If a piece of art only exists in digital form, such as GIF, MEME, digital image, digital video, then people can easily take screenshots, copy or paste it, which will cause digital art to be reduced in value in the commercial sales process. So it is easy to copy, and it is difficult to track whether it is the original artwork. However, with the emergence of NFT, this new form of digital artwork tokenization can trace the original through tokens, so it also makes it much easier for digital artwork to obtain commercial value, because in this case, people actually Can truly “own” the original work.

When talking about the role of NFT in the field of digital art, Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, said:

“For digital art, non-homogeneous tokens are very important. In the past, the biggest problem in art forms was the creation of value and the exchange of toes by Nanyi, but tokenization has solved this problem well.”

According to the NFT sales data website NonFungible.com, art-related NFT transaction volume hit a record single-day high (US$162,385) on September 18, and then set the second-highest single-day transaction volume (US$123,205) on September 22 ). In fact, since June, the sales of blockchain-based digital art have been on the rise.

改变艺术行业游戏规则,NFT能带来更光明的未来吗?

Digital Art + Blockchain = Encryption Art

In fact, digital art has existed for decades. As early as the 1950s and 1960s, artists began to try to use computers to create works, but digital art has not been tokenized on the blockchain platform until recently. For example, in many digital galleries we only developed and launched a non-homogeneous ERC-721 token based on Ethereum in early 2018. (Planet Lord o-daily Note: ERC-721 tokens are also called Non-Fungible Tokens, which are non-fungible tokens. Such tokens record identification information in the smart contract. It is this information that allows each ERC-721 tokens are different, so they cannot be replaced with other tokens, nor can they be exchanged with each other like other cryptocurrencies.)

However, the traditional art world always dismisses digital art. The reason why they have this attitude is mainly because traditional artists believe that digital art is reproducible, which violates the “unique” nature of artworks. Blockparty CEO Vladislav Ginzburg explained that with non-homogeneous tokens, collectors can prove that they have original digital assets. When attending the CADAF Online Art Festival, Vladislav Ginzburg compared digital art with e-books. He said:

“E-books, like digital art, have existed for decades, but people did not have much interest in e-books until the appearance of reading devices such as Kindle and iPad, so the digital art industry is now in the process of’Kindle and iPad era’.”

Duncan Cock Foster, co-founder of digital gallery Nifty Gateway added:

“The art world has always been eager to collect digital art. Rather than homogenizing tokens is the ideal solution to this problem, but we need to distinguish between digital art and encrypted art. Encrypted art is a tokenized digital art, or The blockchain version of digital art.”

Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, also very much agrees with Duncan Cock Foster’s views on encryption art. He believes that encryption art theory should be like this:

“When an artist adds his own digital asset to the digital gallery, the token will be automatically generated through a smart contract and deposited in the artist’s wallet. The permanent link anchored by the token and the artwork will be a unique asset , Represents the ownership and authenticity of the original artwork. Once a work is created, it can be given life on a specific blockchain. Fans or collectors can buy it on the trading platform, and then it can be collected like other rare artworks. Exchange, trade, or hold.”

Will artists accept “encrypted art”?

As a newly emerging industry, there are still obstacles to the acceptance of “encrypted art” by a wider range of mainstream artists, especially since many people do not understand the esoteric technology of “non-homogeneous tokens”, but the current situation It seems to have improved. Duncan Cock Foster revealed that it was very difficult to recruit mainstream artists into the field of crypto art six months ago, but it will not be so difficult after that.

On the other hand, artists are also beginning to discover that the crypto art market is on the rise, such as:

1. “Right Place&Right Time” is a digital art work based on Bitcoin price fluctuations, which sells for as much as $100,000;

2. The digital artwork “Picasso’s Bull” created by artist Trevor Jones was sold at a high price of US$55,555 on Nifty Gateway.

Regarding the fact that crypto art has begun to attract more market attention, Duncan Cock Foster further explained:

“Non-homogeneous tokens are an incredible new creative medium in which artists can complete work that has nothing to do with natural art, and this is the main reason why they are so interested.”

On the other hand, the “second sale” of encrypted art is also very attractive. For example, Asynchronous Art is an encrypted art trading platform. If a collector purchases digital art on the platform, the original author of the related art will get part of the commission for the related transaction (usually the commission rate is 10%) , But if the collector sells the digital artwork a second time in a few years, the original author will get twice the commission (for example, 20%). Conlan Rios, founder and CEO of Asynchronous Art, said that the commission collection model has been written in the trading software, so it is automatically executed. This is obviously the most “revolutionary” aspect of blockchain digital art.

If a collector purchases a digital art on the Asynchronous Art platform, the artist will be paid a commission (for example, 10%) for the related transaction according to a certain percentage. However, if the collector who purchased the relevant art resells it after two years, the original artist will receive a 20% commission on the second transaction. Conlan Rios further explained that this transaction mode happens automatically (it has been written into the software)-this is actually the most “revolutionary” aspect of digital art based on blockchain. Blake Finucane, co-author of the NFT art paper “Encryption Art: Decentralization Prospects”, believes that this sales model was completely impossible before the advent of blockchain technology.

Conlan Rios also analyzed that another novelty of digital art is the creation of multiple different “sales layers”, which you can think of as a kind of “art derivative”, and collectors can purchase art separately by “layer” These hierarchical works usually provide owners with “programmable” options, such as adjusting the color, angle, and even “state” of the original work, thereby creating a new source of income for collectors.

A new “counter-intuitive” concept?

Duncan Cock Foster said that the biggest obstacle to popularizing crypto art is that it is difficult for people to understand what non-homogeneous tokens are. For most people, this may be a new “counter-intuitive” concept, which is difficult to understand, but Once people understand what non-homogeneous tokens are and why the concept is so powerful, they will soon become obsessed with it.

However, Duncan Cock Foster also emphasized that the operation of buying tokenized artworks is completely different from the traditional transaction mode. “At least you can’t swipe your card to buy encrypted artworks.” First, you must create a token for storing non-homogeneous tokens. Digital wallets, and also need to understand some gas cost blockchain knowledge-these may be the biggest obstacle to the rapid popularization of encryption art. After all, these concepts have not been popularized on a large scale, and people need to spend a lot of time and energy. Figuring out how to browse encrypted art also sets up barriers for encrypted art to enter the market.

Blake Finucane is frank, many people are still afraid of blockchain technology and do not understand why works of art require identification/verification before entering the blockchain. He added:

“For pure digital artists, non-homogeneous tokens are actually particularly useful, but for those artists who create art in the physical world such as painting and sculpture, most of them are actually not sure whether they can be non-homogeneous. The tokens are applied to their own artwork.”

It is worth mentioning that the outbreak of the new crown virus has also become a booster for the popularization of digital art. Elena Zavelev, founder and CEO of CADAF and New Art Academy, further explained:

“The new crown virus epidemic has accelerated the global digitalization process and brought unprecedented opportunities to digital artists. Not only that, if blockchain technology can be further popularized and accepted by the wider traditional art community, it will undoubtedly increase the digital art generation. Monetization opportunities. However, from the current situation, the adoption of encryption art is still relatively slow. If the mainstream art community finds tools that are easier to use than blockchain technology within a period of time, then blockchain-based encryption art It is likely to be replaced, and I won’t be surprised.”

Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, added that crypto art needs to develop an ecosystem similar to traditional art, including museums, exhibitions, curators, auction houses, and expositions. Currently, crypto art has not yet established a The social mechanism based on market recognition, reputation and value is both an opportunity and a challenge for collectors and artists.

Not only that, there is another obstacle that restricts the development of encryption art, namely: scalability issues-can the blockchain really handle all data flowing in the form of non-homogeneous tokens?

Conlan Rios, the founder and CEO of Asynchronous Art, now uses ERC-721 tokens to operate a gallery business on the Ethereum blockchain. He believes that crypto art itself may not be related to the blockchain. Although Ethereum is expensive and slow, But it has better durability, and some shortcomings considered by the outside world (such as high gas costs) may be reasonable for artists who create works of different eras. After all, Ethereum has existed for more than ten years-but, Emerging artists may prefer to try non-homogeneous tokens on low-priced and well-functioning platforms.

Can encrypted art surpass traditional art in the future?

Anthony Pompliano, co-founder and partner of Morgan Creek Digital, asked a question: Will the market value of blockchain-based digital art one day surpass traditional physical art? Regarding this issue, at least from the current situation, it seems that not many people are willing to admit it.

Blake Finucane said frankly:

“I won’t say that the market value of encrypted art will be as big as traditional art, but I believe that encrypted art will occupy a very important position together with traditional art in art and art history.”

Cock Foster has the same view, he said:

“In the short term, I don’t think that crypto art will affect the sales of traditional art. The art industry is not a zero-sum game. If NFT art wants to achieve large-scale growth, it also needs to rely on global art sales growth instead of The physical art industry attracts buyers to achieve this. From this perspective, digital artists will benefit the most, because they will never sell their artworks before the invention of NFT technology, which also changes the value of their artworks Higher. An artist on our platform just used his Nifty Gateway sales revenue to buy a house. Compared to any time before, blockchain technology gives more artists the opportunity to earn money from their artworks. Make your life better.”

Anthony Pompliano also pointed out that digital art can do some things that cannot be achieved in the field of traditional art. He said:

“Each piece of digital art can contain complex movements and actions. The homeowner or art collector only needs to hang an electronic display on the wall to periodically cycle different artworks in a predetermined direction. Digital art can also be stored in the ether forever, so there is no need to worry about physical damage. Expensive artwork insurance may be a thing of the past.”

Giovanni Colavizza believes that the market’s interest in digital art will definitely accelerate in 2020, and this may be just the beginning. He concluded by saying:

“Once more digital/encrypted art exhibitions are launched in digital museums or similar venues like Tate Museum, we will see this emerging industry being rapidly promoted-in fact, things have already happened.”

In short, digital art—especially blockchain-based encryption art is gaining more and more attention, especially during the new crown virus epidemic, people’s enthusiasm for digital art has accelerated. When the museum is closed, will anyone still appreciate the artwork? The answer is: yes, because digital art is on the rise.

However, if you want to allow digital art to develop in a long-term and stable manner, you must find a way to motivate artists, gallery operators, and other practitioners. They need to get paid from their labor-and this is the blockchain Where technology and NFT change the rules of the game: NFT can continue to prove the uniqueness of the artwork, thereby ensuring that the original digital artwork is sold and resold again and again, and the artist can make a profit every time a transaction occurs—— Because this pattern has already been carved into the code.