With everyone desperate to find a way of making money selling digital content, recent talk of non-fungible tokens has landed on fertile soil. But will NFT crypto become a common part of digital content strategy, or is it just another passing craze?
There is certainly a lot of hype, but NFTs — and the blockchain itself — can create limited runs, leading to manufactured scarcity. That means creating demand in a digital world, where there has traditionally been too much product and not enough buyers.
Collin Müller a Hamburg-based IT and digital media consultant says that NFTs are ultimately a certificate of authenticity, and the uniqueness they confer on an asset is to some extent illusory.
“One big misconception about non-fungible tokens is that they do not prevent the creation of exact copies,” Müller tells FEED.
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“I can buy a piece of digital art and also own the non-fungible token associated with it, but as soon as it’s on my computer screen, I can create an exact copy. Now, if I want to sell that copy, people will also ask me to transfer the specific certificate — the non-fungible token.”
Müller is sceptical that NFTs will have wide, universal value in the short term.
READ MORE: NFTs crypto: Non-fungible, what now? (FEED)
“There is application for NFTs, but only within certain niche circles. I don’t understand why people pay millions of euros for a piece of art — digital or non-digital. If I like the image, I’m happy having a copy hanging on my wall. I don’t care whether it’s the original Picasso, or not. But, obviously, there’s an international art scene where it matters, and this is exactly the same with the digital world. As long as people are willing to pay, there will be a market. When they suddenly don’t want to pay for it, the market will crash.”
This use of the blockchain to publicly certify ownership is being utilized by Brussels-based company Arteïa. As reported by FEED, Arteïa used the blockchain to create what may be the first digital catalogue raisonné anchored in the blockchain. This is a comprehensive catalogue of an artist’s works. Traditionally, these have been printed in volumes — they’re costly to produce, difficult to update and subject to gaps and errors.
“Picasso’s catalogue raisonné is 33 books, with 16,000 black-and-white pictures of paintings,” explains Arteïa co-founder and CSO Olivier Marian. “It was done during his life by a friend of his, Christian Zervos, coming to an end in 1978, when Picasso died. We know there are still a lot of paintings not in the catalogue.”
Arteïa offers a full inventory of an artist’s vetted and confirmed pieces, plus its showing history. Blockchain is used as supply chain management technology. The artist — or assigned executor — is the only person who can alter each work’s data, which is stored securely on the blockchain.
French artist Hélène Delprat is the first to be completely catalogued by Arteïa. Along with her gallerist, Christophe Gaillard, she has catalogued around 3,000 pieces from 40 years of work, including films, paintings, photos, drawings and sculptures.
Even digital artwork is not protected by blockchain, since it doesn’t lend itself to storing large files. The data that makes up one of Arteïa’s records, or an NFT, can point to an original artwork that exists online, but the current technology — essentially a secured URL with a certificate of ownership — doesn’t give the content any more security. It’s the early stages, but Marian expects great promise for a new generation of artists.
“NFT technology is still at the beginning,” she says. “It’s very interesting and secure. The most important thing now is the community’s excitement — new artists and collectors who are showing how much the art ecosystem has to evolve.”
Yet the bubble may already have collapsed.
Bloomberg reported in April that prices for digital collectibles were already “sliding,” with average prices for NFTs tumbling almost 70% from a peak in February to about $1,400, according to NFT exchange NonFungible.
“Time will tell if the boom deflates, or whether the volatility indicates a new market going through a period of price discovery.”