Art and NFT: 5.8 million in minutes for Grimes

Art and NFT: 5.8 million in minutes for Grimes

Art and NFT

Born in 1988, born Claire Elise Boucher and better known as Grimes, the Canadian singer enters the ranks of those who are ensuring a peaceful old age thanks to NFT art. In just a few minutes you have grossed $ 5.8 million by selling your digital works.

Grimes in the NFT art business too

What are we talking about? Creations sold online in the form of Non-Fungible Token. They do not exist in the real world on physical media, but their authenticity is guaranteed by the use of a blockchain (the same technology underlying cryptocurrencies such as Bitcoin). Just yesterday the London auction house Christie's awarded a collage of images of Beeple for 69.3 million. At the beginning of March we reported on these pages the news of a 10-second video purchased for 6.6 million.

Any digital asset can become an NFT, any content. Even a message of a few letters on social networks: the first published by Jack Dorsey, CEO and founder of Twitter, has a quotation currently estimated at 2.5 million.

The approach adopted by Grimes for its own works (an example below) is however different: it sells several copies of the works, accepting offers in the dark for a predetermined period of time, without the interested buyers being able to relaunch from time to time. At the end of the countdown, the available pieces are assigned to the collectors who have proposed the highest figures. All seasoned with a well thought out hype strategy with posts like this one.

Dropping NFTs tomorrow at 2pm EST. enter the void

- ☘︎𝔊𝔯𝔦𝔪𝔢𝔰 (@Grimezsz) February 28, 2021

Ah, we almost forgot: Grimes is also the girlfriend of the richest man in the world, a certain Elon Musk.


Does NFT Art Spell Trouble for Auction Houses and Dealers?

On January 27, the co-creators of Hashmasks, an online digital art collective, announced to their few dozen Twitter followers that they would begin selling what they called “the next generation of digital art collectibles.” Consisting of 16,384 unique digital artworks, these colorful portraits followed a template of five main characteristics—eye color, skin color, mask, character and an item—some of which were rarer than others, such as a unicorn mask. Over the following days the digital collectibles sold by Hashmasks spread quickly through instant-messaging platforms like Discord and Telegram, where cryptocurrency enthusiasts share intel on new ventures. The sale totaled 10,044 Ethereum, or what was $16 million at the time. Haskmasks’ Twitter account has since increased to over 17,000 followers.  

The seemingly out-of-nowhere gold rush for Hashmasks has been part of a larger trend in crypto known as NFTs, or nonfungible tokens, a digital representation of an asset, either physical or digital, that verifies its ownership and authenticity. Unlike Bitcoin and other cryptocurrencies that are interchangeable (i.e., fungible), NFTs are unique digital tokens, which can include digital artworks like Hashmasks as well as domain names, memes, digital trading cards and even tweets. Essentially, NFTs make it possible to own a piece of the internet. 

NFTs have become an overnight sensation in the creative and entertainment industries. Logan Paul, the YouTuber-turned-boxer, partnered with Bondly to release a limited set of digital trading cards styled after Pokémon and featuring his image. (They netted $3.5 million in a day.) Kings of Leon released an album as an NFT, some of which contain perks like front-row concert seats for life. NBA Top Shot, which boasts the greatest overall sales of any NFT class at over $349 million, allows people to buy and collect basketball highlight clips, from LeBron James dunking to Zion Williamson making his first career block, which sold for $100,000. 

“What bitcoin has done to banking, NFTs are doing to the world of art and collectible objects,” says Chris Dannen, 36, managing partner of Iterative Capital, a cryptocurrency mining and investment firm. 

Given that major auction houses like Christie’s, Sotheby’s and Phillips take a sizable commission—known as a buyer’s premium, which is usually around 14 to 25 percent—the ability of a small Twitter account to drive a multimillion-dollar sale is striking. 

The seemingly out-of-nowhere gold rush for Hashmasks has been part of a larger trend in crypto. Above, three Hashmasks out of 16,384, from a recent collection.Photo: Courtesy of the Hashmasks

Hansen Wang, a co-creator of Hashmasks, says he’s opposed to the relative opacity of the art world, where the names of buyers and sellers are often intentionally obscured and an air of elitism has historically existed. “I feel personally there’s an inherent lack of transparency in the art market,” Wang, 29, says. “You don’t know who owns what, when something was owned, how much was paid for it.” If one were to bring the entire art market to the blockchain, essentially by creating a digital token to represent each artwork, then it would be possible to make the art market completely transparent, he says. “Every single owner of an art piece will be known to anyone. Every single sale, bid, transfer [would be] recorded on the blockchain in a transparent way.” 

High-end art goes through auction houses for a number of reasons—authentication, connecting sellers to wealthy clients and more—but proponents of NFTs view these as unnecessary frictions slowing the conversion, or liquidation, of art to cash. In the weeks following the Hashmasks auction, the total sales of the artworks on the secondary market has reached more than $40 million. Brian Krogsgard, a web developer and host of the crypto podcast Ledger Status, had purchased 20 Hashmasks and offloaded more than half with a few clicks. Because NFTs are built with “smart contracts,” they enable complex terms of ownership, wherein artists, in theory, could automatically collect royalties on every resale or buyers might purchase fractional ownership of an NFT. 

The art world has been paying attention, but the reactions are mixed. On March 11, Christie’s sold an NFT artwork by Mike Winkelmann, a digital artist commonly known as Beeple, who has collaborated with celebrities like Ariana Grande and brands like Nike and Louis Vuitton, for $69.3 million. The work is a collage consisting of 5,000 images made over more than 13 years called Everydays: The First 5000 Days, essentially a visual diary chronicling a turbulent time in America as well as Beeple’s own artistic development from rudimentary drawings to 3-D forms. 

“They’re definitely already changing the art market,” says Noah Davis, 31, a specialist in postwar and contemporary art at Christie’s, about NFT artworks. “Ever since street art upended our world, we’ve been prepared for the possibility of a new disrupting trend, and this is definitely that.” 

Aesthetic novelty aside, Christie’s sees a clear financial benefit from dealing in NFT art. “There’s quite a lot of overhead at auction houses, and part of the reason why NFTs are attractive to us is because there’s no objecthood,” says Davis. “We don’t have to ship anything around; we don’t have to insure, photograph [or] catalog anything. A lot of the basic responsibilities and financial commitments that are there for traditional artwork just don’t apply.” Most buyers, Davis says, are not traditional collectors but new clients from the crypto world who have experience collecting NFTs: “It’s a weird instance where we have a ton of new clients who are already more or less seasoned collectors.” 

But is NFT art a smart investment? They do not typically come with a trademark, license or copyright, and much of the current buying fervor of art NFTs can be attributed in part to the newly minted cryptocurrency millionaires who have digital coin to burn and relatively few places to spend it. A number of art insiders view it as a passing fad. Sylvain Levy, a French collector, recently posted a link to an article headlined, “This Miami art collector just sold a free video clip for $6.6 million. It’s all crypto,” captioning it with the words “no comment” and an angry-face emoji. Both Sotheby’s and Phillips declined to comment for this article.

Are NFTs also good enough artistically that collectors should care? Nyan Cat, an animated flying cat famous on YouTube, which recently sold as an NFT for almost $600,000, is literally a meme. Davis offers a tactful answer regarding the quality of Beeple’s work. “From an aesthetic perspective, this is a really interesting outlier in a lot in a postwar contemporary category, to be offering something that doesn’t have any kind of awareness or fidelity to the blue-chip concept of art,” he says. “That parochial perspective is thrown out the window; this is much more of a populist aesthetic.” 

For now, the traditional art world seems mostly to just be keeping an eye on NFTs without fully jumping in. “The medium is still in its infancy,” says Karen Wong, deputy director and co-founder of NEW INC, the New Museum’s art and technology incubator in New York. She believes NFTs will expand rather than change the art world. “In many ways the digital [world is] trying to re-create some kind of physical form we already know,” she says. “I’m really interested for the artist to have such mastery over the technology that they’re going to show us something we’ve never thought of. That’s what I’m waiting for.”

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