Why digital art is selling for millions of dollars

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SvD Näringsliv

This column was first published in SvD Kultur, in Swedish, on March 1st, 2021.

The legendary auction house Christie’s is selling a digital work of art and thus joining a trend that is growing explosively. The items are suddenly sold for record sums. Will it last?

$1.4 million in seven minutes. This is how much the American artist Micah Johnson sold his new digital artwork “Genesis.001” for recently. But unlike a traditional auction, 1,402 different people were able to buy the work at the same time, and received a certificate as proof of their ownership. The art itself is digital and can be viewed by anyone with a web browser.

The technology behind this new phenomenon is called NFT, which stands for “non-fungible token”. It can be compared to bitcoin and other cryptocurrencies in that the ownership is completely digital and stored in a kind of public logbook, also called a blockchain. The logbook regulates who owns what, and ensures the uniqueness of the purchase.

This is needed as we are talking about digital works of art that could be saved on any mobile phone, completely free. What is sold is therefore more of a formal right to own and trade, rather than the piece itself.

This week, NFT moved into the mainstream, when the historic auction house Christie’s began the first auction of its kind. The artist Beeple’s work “Everydays: The first 5 000 days” will be auctioned off for two weeks and at the time of writing is up to 3 million dollars – and it is likely to increase.

In many ways, this is a natural continuation of Christie’s acclaimed auction of “Portrait of Edmond Belamy”, created by a GAN – Generative Adversarial Network – that is, art created by algorithms. The final price there ended up at 432,500 dollars, almost 45 times higher than estimated.

This new technology raises a wide range of questions. The focus on trade leads to the idea of ​​pure speculation rather than the practice of arts or crafts. The rise in Bitcoin and other cryptocurrencies has led to a general interest increase of all types of digital assets, and this is probably also why NFT has received this recent and major boost.

At the same time, it is too easy to dismiss this category as purely speculative business. The digital format enables both new creative processes and outcomes. In the creation of the series “Arcade machine dreams”, the artist Brendan Dawes used old game graphics which algorithms then processed to create abstract computer sculptures. The result was a playful way to combine nostalgia with a fleeting popular culture.

Another interesting dimension is that the technology enables a new kind of resale right for the artist. When NFT works of art are sold on the secondary market – by both auction houses and private individuals – about ten percent of the sale price goes back to the artist in question.

This addresses what one could think of as an old injustice where many artists have not been able to take part in the great increase in value that their work has created. The technology also makes counterfeiting impossible as you can follow every transaction that has taken place since the work was created.

If you look outside the world of art, you will also find NFT in popular culture, humor, and sports. Eric Nakagawa, the founder of the now classic meme site “I can haz cheezburger”, is now selling the image that started the whole trend of funny cat memes on the internet. More familiar from the physical world is Top Shot, where the American basketball league NBA has created digital collector images, in the form of videos. You can now bid on and own them.

Why then should you own something that others can use in exactly the same way? Maybe it creates a permanence in what is otherwise an almost infinite flow of information, humor and memories. The scrolling on your mobile phone stops temporarily, and you create a traceable manifestation of internet culture.

Art and literature are constantly trying to capture the present. Could this be a way to do just that, for a generation that grew up on the internet?

This column was first published in SvD Kultur, in Swedish, on March 1st, 2021.

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