NFTs (non-fungible tokens) skyrocketed in popularity last year, so much so that Collins Dictionary named NFT its word of the year for 2021. Cryptocurrency growth, combined with the COVID-19 pandemic, paved the way for a surge in digital collecting.
The Rise of NFTs
Everydays — The First 5000 Days (2021) sold for a record $69.3 million at Christie’s in February 2021, propelling NFTs to the front pages of news feeds around the world. More news broke with the sale of a set of nine Cryptopunks for $17 million and a selection of works by FEWOCiOUS, an 18-year-old Seattle-based artist, for $2.2 million.
Other auction houses followed suit, resulting in more record sales for native crypto artists such as Pak, and Mad Dog Jones. Nonetheless, the majority of NFT sales took place on dedicated NFT marketplaces such as OpenSea, SuperRare, Rarible, Nifty Gateway, MakersPlace, and others.
While record auction prices have brought NFTs to the forefront, the market-focused narrative tends to obscure the technology and philosophy at the heart of a digital art movement led by artists and a community of collectors.
What sparked early NFT adoption?
The rise of digital art as a mode of expression is a natural progression in an age when people are spending more time online and are increasingly entwined with the internet.
However, the prominence of NFTs in particular is being driven primarily by a growing interest in blockchain utility applications—a decentralized public ledger technology that tracks and records transactions (the foundation of cryptocurrency). NFTs are one-of-a-kind cryptographic tokens that represent assets like digital artwork.
These one-of-a-kind codes are powered by smart contracts that are typically run on the Ethereum blockchain, resulting in an open-access public record of authenticity.
NFTs also introduce scarcity to digital assets, allowing creators to sell – and collectors to own – inherently replicable works in limited quantities.
Many early adopters did not collect NFTs for the money that has brought a flood of new speculators to the market. They were drawn instead to the way blockchain technology empowers creators.
The Museum of Crypto Art
Colborn Bell founded the Museum of Crypto Art (MoCA), a decentralized art exhibition platform that houses a permanent collection of 200 historical NFT artworks.
The institution, which is housed in a virtual museum on Somnium Space, represents a pantheon of NFT artists such as Trevor Jones, XCOPY, Dmitri Cherniak, and Pak.
MOCA describes itself as a “testament to those who dared to believe in a better future that prioritized sovereignty, market access, and artistic freedom.”
Art as Visual Language
Crypto art, according to Bell, is a visual language that communicates the ideals of cryptocurrency and its potential to ignite a social and financial revolution. Bell, a former investment banker who had grown tired of “crony capitalism and the powers that be,” began investing in Ethereum in early 2017. That summer, he became a MoonCats collector, one of the first Ethereum-based NFT collectibles.
Bell’s personal collection currently stands at around 2,000 NFTs, the vast majority of which he intends to donate to the museum over the next decade. “The reason I collect crypto art stems from the fact that I believe cryptocurrency is a more superior and powerful technology than the current monetary system that we have,” he explained in a recent interview.
Cryptocurrency, which was once associated with illegal activity, has already come a long way in terms of public perception thanks to use cases such as NFTs. NFTs have effectively demonstrated the value of crypto as “an exercise in self-sovereignty.”
Most importantly, the opportunities provided by technology to artists for free expression and autonomy are the primary motivators for Bell’s—and many other early collectors’—engagement in the space. “It’s a way for you to express yourself without being censored,” he explained. “It’s a free and open-access network where you can upload your creativity and prove ownership.”
Miguel Faus, a filmmaker based in Barcelona and London, shares a similar sentiment. His NFT collection includes notable PFP (profile picture) projects such as a CryptoPunk, a Bored Ape, and Cool Cats.
The concept of NFTs “clicked instantly as a long-awaited revolution that would mitigate a lot of the problems that creators of all kinds have faced on the internet since its inception,” according to the artist. “I think that’s the promise of Web3 in a nutshell,” he said, “redistributing value towards creators and audiences rather than intermediaries and gatekeepers.”
NFTs: Bringing collectors and artists together
While NFTs currently exist in the digital realm (NFTs do not have to be digital assets, but the technology pairs particularly well with the medium), much of their value is derived from the human connections they enable. Many seasoned collectors consider themselves arts patrons and are personally involved with the artists they collect. This symbiosis helps drive interest and adoption.
How to get Started Collecting NFTs
“Everyone always asks me, ‘How did you get into collecting art?’ “I always tell them, ‘Write a check that hurts,'” Faus said. “It makes you want to learn about it and educate yourself.” That is what culture is, and that is what art brings you. Simply familiarize yourself with the technology when it comes to NFTs.”
NFT primary sales, or “drops,” are typically conducted in cryptocurrency, though some platforms, such as Nifty Gateway, allow collectors to pay with a credit card. If you want to buy an NFT with Ethereum, you must first buy cryptocurrency through an exchange like Coinbase.
“There are a lot of resources for crypto and NFTs in the space,” Faus continued. “Utilize the available information—even Coinbase has some great crypto training videos that I highly recommend to newcomers.” On OpenSea, Faus recommended the NFT Bible as a “must-read for anyone entering the space.”
One of the primary benefits of purchasing NFTs is the opportunity to learn more about the space; however, the opportunity to interact directly with artists is even more compelling. The opportunities for connection are myriad-something traditional artists never had access to.
“The nice thing about NFTs is that the artists tend to communicate with their fans—they are part of a very engaging community,” Faus said. “Get in touch with them. I reach out to artists and engage in conversations with them, which teaches me about who they are. When I have that background information, I am more likely to support their work.”
Disclaimer: The author is a member of Verisart.