The dawn of the internet age came with giddy predictions of a new more open and egalitarian era. Mattha Busby asks if NFTs might help do just to this.
In 1973 the The New York Times posed the question, ‘Writers, Composers and Actors Collect Royalties: Why Not Artists?’ in response to a famous incident when artist Robert Rauschenberg confronted collector Robert Scull, who had resold his abstract oil piece for almost 100 times what he had paid the painter. There were few potential solutions for the much demanded provision of artist royalties; and whilst subsequent proposals for a US resale law did not pick up traction, the protestations of Rauschenberg can be seen as the first brick in the wall of a movement to ensure the better treatment of artists.
But since the creation of blockchain –- perhaps most widely recognised as the host of Bitcoin and other cryptocurrencies— a new system of artwork ownership has been established, replacing a storage facility with a digital data log. Digital and physical pieces' rights are stored within Non-Fungible Tokens (NFTs) on public, decentralised ledgers hosted on the blockchain; and include a significant embedded resale royalty stipulation that flows back to the original creator each time it is resold. So would Rauschenberg and others put their faith in NFTs and online marketplaces over traditional collectors and dealers?
“When ownership rights are digital you can code them in a way to easily enforce their rules,” says Kayvon Tehranian, the founding CEO of NFT marketplace Foundation which has seen $100m in sales this year. “We honour an automated 10% royalty to the original creator whenever a piece is sold in the secondary market. It gets sent to the creator automatically. You don't need to file any paperwork with us.”
NFTs hit headlines last year amidst an avalanche of new artworks, as their sales raked in tens of millions, including at legacy institutions such as Christie's auction house. While some dismiss it all as a fad, many view the swift rise of art hosted by NFTs as potentially utopian and extremely disruptive: imagine a world without parasitic intermediaries and prude, corrupt tastemakers, they say.
NFTs were reportedly invented in 2012 by two creative technologists, John Watkinson and Matt Hall, seeking to issue real-world assets on the open ledger where cryptocurrency transactions are recorded, whilst the NFT widely-recognised as Kevin McCoy's, Quantum, (pictured above) was created in May 2014. Prior to their invention, digital creations could not be automatically afforded property rights. Through this nascent technology, Tehranian says it is simple to place some control on downstream sales. “The mainstream systems currently in place are legally-oriented, very expensive, and biased towards the privileged few that can even understand them,” he contends. But code just runs and runs, and the digits seemingly have no feelings about the matters at hand (or do they?).
The dawning of the internet age (and previously, capitalism) provoked giddy predictions that a new era of greater equality beckoned. Information would be shared more freely than ever before, knowledge would be democratised as everyone had an encyclopaedia at their fingertips, and the truth would be difficult to suppress, or so they said.
Now, however, large parts of the web are subject to oligarchic control by decree and it is facing ever-increasing state censorship, too. People are also tracked incessantly and manipulated into buying products, some of which are potentially destructive. The internet nonetheless retains unprecedented power for people to disseminate valuable information, but early apparent democratic victories have receded.
“We're in that moment where we can't yet see how the world changes from this technology,” Tehranian says, also alluding to potentially earth-shattering disruptions presented by cryptocurrencies (his platform runs solely on ethereum). “There will be new businesses that put more money in the pockets of people creating the content and the value of these networks,” he prophesises.
The royalty-disbursing technology could also be seriously troublesome to, among others, the streaming industry gravy train – with songwriters earning about 50% of radio revenues but exponentially less from plays on multibillion platforms like Spotify. Some music labels have also previously faced criticism for not passing on royalties to artists, most notably US singer-songwriter Rodriguez, whose remarkable story of being unaware 500,000 of his records had been sold in South Africa won an Oscar for the Searching for Sugarman documentary maker.
Krista Kim, a visual artist who famously sold her “Mars House”, the first NFT digital house, for $500,000 in 2013, also sketches a revolutionary vision of a better future world without intermediaries such as bankers, auctioneers, and agents. “I believe NFTs are not only about art,” she says, “they are the backbone and foundation for our decentralised future in economy and governance. You have this trustless-based smart contract system between two parties that doesn’t need to be verified or mediated by a third party.”
Everything is on the blockchain and transparent, Kim adds, as opposed to the sometimes crusty and opaque world of art ownership. “It’s the intermediation that causes corruption through the centralisation of power and influence. We don't have to spend time, energy and human capital in finding ways to screw one another, because there’s no longer loopholes: we can just focus on co-creating and making life better. In an NFT system, you can’t screw me.
But such systems will continue to operate in wider, often flawed, ecosystems. In September 2021, street artist Banksy’s website was allegedly hacked by a scammer who added a new page announcing the sale of an NFT artwork criticising the pollution caused by Bitcoin mining on NFT marketplace OpenSea. It sold for $340,000. But then the prankster, in a further bizarre twist, refunded the money. However, it was obviously Banksy’s website security failing which was to blame (though the purchaser also didn’t twig on the marketplace that the artwork was not genuine).
“Very, very, very few of these NFTs will hold their value,” predicts art critic Ben Davis, author of 9.5 Theses on Art and Class. “I can name multiple movements in the traditional art world where pieces were selling for millions of dollars and then the markets collapsed.” He also remains mindful that galleries, museums, curators and critics like himself may also perform valuable roles. “One of the things about gatekeepers is that they also invite people through the gate. Going to a gallery saves you 1,000 studio visits. Someone has done a bit of work to nominate something as important and worthy of your attention.” Eliminating gatekeepers does, however, create room for new voices to enter the scene, Davis adds, but new third parties–such as NFT marketplaces, trendsetters and brands cashing in on the boom–soon emerge. “I think those structures are a little more inaccessible to people over time,” he claims.
This crypto and NFT marketplace boom–a period not dissimilar from the dot-com bubble in which excessive stock market speculation over internet companies went up in smoke, ruining families–could lead to a similar black hole of debt for many. “The symbol of the internet bubble was a sock-puppet,” Davis says of the Pets.com spokespuppet. “Then it all crashed and people lost a tonne of money.” He also points to the 90s comic book boom, and draws parallels between boomers flash with disposable cash and smug crypto early-adopters today. “In the end, it was a big bubble, Marvel Comics went bankrupt and lots of teenagers lost their allowance. Others were tricked into investing.” However, despite his general scepticism amid wild market speculation for many unimpressive pieces (mostly animals doing cute human things, he scorns), Davis does believe that automated royalties is an “exciting” innovation.
“But it has never been the case that the problems faced by a majority of artists is getting a cut of the resales,” he asserts. “The problem for the majority of the artists is to even get any sales at all; because most art is valueless and can’t find a market.” A relatively small number of artists whose artworks grow in value over time may benefit, but a new royalty scheme does not solve fundamental inequalities of many artists neither having audiences nor being socioeconomically connected, Davis argues.
Damien Hirst’s recent NFT collection, “The Currency”, highlights this, while “almost making a joke” out of the market, according to the critic. It involved 10,000 near-identical polka-dotted $2,000 A4 paintings each corresponding to an NFT which was signed and numbered by the shark-in-formaldehyde artist. Purchasers could decide whether to take the physical version or the digital imprint, with the paper copy burned if the latter was chosen. One of the physically-kept works, titled “Yes”, has since been resold for $120,000 – making a 6,000% return for the original buyer and potentially substantial royalties for Hirst.
It follows the now infamous March sale of a digital NFT collage – “Everydays: The First 5000 Days”, which chronicled years of daily sketches by artist Mike Winkelmann, aka Beeple – for $69m at Christie's auction house. The sale ranks as the fourth-most expensive artwork by a living artist and the most valuable NFT work. The winner of the auction receives a digital file and vague rights to present the image. Another Beeple work has been resold for $6.7m– 100 times what it was bought for four months ago – of which he got a healthy 10% cut.
For the 40-year-old from Wisconsin whose mother worked in a community centre and father was an engineer, the coming of the NFT market has evidently propelled him to previously unthinkable heights. In 2020 he had been completely unknown to the mainstream art world and the most he had ever sold a print for was $100 – underlining how the NFT market can provide up-and-comers who catch the wave with huge, global audiences, perhaps without needing to backscratch old school gatekeepers or wait to get discovered.
"I honestly, like, I never thought I could sell my work," he told Business Insider. "Kind of late September, early October 2020, people kept hitting me on being like, 'Oh, you got to look at this NFT thing’”. On his pieces, and NFTs more widely, he adds: “If everybody wants it, well, then it has value.”
Noah Davis, specialist in post-war & contemporary art at Christie's, told the website: "It's really a radical gesture to offer for sale something without any object, and we might as well lean into that. There's an interesting parallel between Mike and Andy Warhol in the way that their careers developed. Andy also started as an illustrator working in, basically, a gig economy."
With money-making opportunities for many artists severely curtailed by Covid restrictions, the ascendance of NFTs – which surely mark an inevitable step in the evolution of internet culture – has been accelerated. But more established artists, like Hirst, and celebrities like Mila Kunis, whose animated “Stoner Cats” series presented in the form of NFTs sold out in 35 minutes, raking in $8m, nonetheless appear to be reaping many of the NFT rewards – though the Hollywood actress’ project is also being presented as a new model to fund potentially controversial TV shows that may otherwise struggle to secure backing. Though, currently, it seems only those who have brought the episodes can watch them, making them infinitely more inaccessible than, say, a YouTube series. One also wonders whether Kunis and the star-studded cast of multimillionaires could have just funded the cartoon themselves in any case.
The pressure to gain access to the show “unleashed chaos on the ethereum blockchain network”, Yahoo Finance reported, raising transaction fees from $9.50 to $35 and allegedly collectively costing people $800,000 in charges amid the madness. “Thank you so much for believing in this entire crazy concept and idea, and being a part of it. It has been a whirlwind and we are so excited to continue down this journey with all of you. We’re so sorry that we broke ethereum … but also, f*** it.”
Some fear super-disposable NFT art is leading us to a trans-material dystopia. Dean Kissick, New York editor of Spike Art magazine, is among those unimpressed. “With NFTs, we’ve made another leap from art that’s easy to post, to art that simply is the post. The most popular series of NFT collectibles are algorithmically generated. And what they reveal, compared to the rest of culture, is a broader and more prevalent trend of art and entertainment that has the uncanny feeling of having been made by algorithm, even though it wasn’t,” he writes in the magazine. “What non-fungible (which is to say, unique) tokens show us, is the absolute fungibility of culture today: its hazy, interchangeable meaninglessness.”
Davis is also alarmed. “I’ve gone into the Reddit chat rooms discussing how to make NFTs and you just see, ‘I’m 14 years old, I wanna become an NFT millionaire, how do I do it’, and the next person is like, ‘Well you need a gimmick, you can’t just be yourself, you have to come up with a brand’.” He says that with interest rates at zero and young adults today having grown up amid the financial crisis and declining quality of life, a “no future sentiment” is deeply baked into much NFT art. “You see it in the nihilistic aesthetics,” he explains. “In some ways you appreciate it as a 'fuck you'.”
But beneath news of teenagers making millions from pixelated icons, and cats smoking weed, genuinely cutting-edge, thought-provoking art, like Kim’s, is being produced and sold – with artists unshackled from legacy institutions. “The art market has been so entrenched in the traditional intermediary markets that it has stifled the real meaning of what art is to society,” she contends. “NFT artists are no longer relying on the gallery model for their livelihoods; there is more creative freedom.”
Alluding to her upcoming “Continuum” public installation in Toronto – “the biggest sound and light healing meditative installation in the world” – which she has part-funded with city authorities and sponsors, Kim believes more free-to-experience art which speaks to, and reflects, society will emerge. “Whereas it used to just reflect the tastes of the elites that purchased the art, it will be more of a raw expression of humanity: its making it much more viable to be an artist and be paid fairly.”
It ultimately seems like an appetising future could await many artists who may have previously been left out in the cold. “The rate at which change happens can be quite dramatic and unexpected,” muses Tehranian. “I wouldn't be surprised if [Big Tech companies] are challenged by these new models,” though he concedes he does not think that a reckoning is imminent. However, “the extent to which this system fundamentally puts power in the hands of the people creating the content, not the distributors, is quite large.”
Mattha Busby is a freelance journalist based in Mexico who regularly writes for the Guardian, Vice and other publications. His first book, 'Should All Drugs Be Legalised?', will be published by Thames & Hudson in the spring. Follow his work via Twitter.
Further reading: Artsy 'How a single auction changed the art market'
All images remain copyright The Artists.