Non-fungible tokens (NFTs) have been generating headlines, most recently when graphic designer and self-taught artist Mike Winkelmann (also known as Beeple) sold a digital image online at Christie’s auction house for $69.3 million. It was also the most expensive digital asset to ever sell with a “digital certificate of authenticity,” otherwise known as an NFT. The blockchain-based assets differ from cryptocurrencies such as Bitcoin in that each NFT is a “singularly unique marker for the digital asset it tags.” Hence the uproar in the art world over Beeple’s record-breaking sale.

The Wall Street Journal reports that there were 353 bids over the 15-day auction for Beeple’s piece, “Everydays: The First 5000 Days,” an “amalgam of political cartoons and lush, videogame-like scenes” that took him more than 13 years to complete. The winner will receive the images, and its unique token, “which will convey ownership” and will also be recorded on a blockchain “digital ledger.”

The NFT will “ensure it remains certified in perpetuity,” unlike any copies of the image. According to Christie’s art specialist Noah Davis, “NFT art is still so new that the house didn’t put an estimate on the work.” Christie’s accepted cryptocurrency for the first time with this sale.

NFTs have become a phenomenon. Twitter founder Jack Dorsey just turned his first tweet into an NFT, and “a trading-card like video NFT of LeBron James dunking a basketball recently sold for over $200,000.” Before “Everydays,” Beeple “sold a small group of his NFT artworks online for $3.5 million three months ago on a platform called Nifty Gateway” and then, last month, sold another such artwork online for $6.6 million.

Not everyone is enthused. Steven Sacks, founder and director of bitforms gallery in New York called the “Everydays” sale “a pure hype play.” He noted that, “he shows digital artists who have been experimenting with new media since the 1960s, and while some of them have sold room-filling installations for over $1 million, the more common price level hovers under $100,000.”

Artsy chief executive Mike Steib said that, “the novelty of NFTs could be fueling much of the frenzy … [asking if] collectors [will] still be this excited when the houses are offering up the 520th edition of the 27th most-popular NFT artist.” Cryptocurrency Tezos co-founder Kathleen Breitman suggested that, “private equity funds with deep investments in cryptocurrency are also likely behind the NFT art rush, as are individual investors.”

The New York Times reports that, “the technology for NFTs has been around since the mid-2010s but hit the mainstream in late 2017 with CryptoKitties, a site that allowed people to buy and ‘breed’ limited-edition digital cats with cryptocurrency.” It also notes that the “gigantic sale” for Beeple’s art has precedents. “To take one example, anyone could duct tape a banana to the wall, but it wouldn’t be Maurizio Cattelan’s ‘Comedian’.” Beeple has also been compared to the likes of street artist Banksy and graffiti artist and designer KAWS.

The NFT Report 2020, published by L’Atelier BNP Paribas, stated that, “the value of the NFT market grew by 299 percent in 2020, when it was valued at over $250 million.”

Related:
From Crypto Art to Trading Cards, Investment Manias Abound, The New York Times, 3/13/21