It was 2014. In Spain, the king emeritus abdicated; Europe feared the proximity of Ebola and not that of any coronavirus and Apple presented its iPhone (still) 6. Without much fuss, the artist Kevin McCoy created ‘Quantum’, the first non-fungible token (NFT) in history. It’s a simple geometric figure that changes colour and shape, but it wasn’t until June 10, 2021, that it became part of history: Sotherby’s sold it that Thursday for $1.472 million.
That year, only with the Ether cryptocurrency, digital works worth 40,000 million dollars have been sold. If all cryptocurrencies are taken into account – for example, the sales volume in the Solana cryptocurrency reached 500 million dollars in three months – the purchase and sale of NFTs have generated more volume of money than conventional works of art in 2020. And this only counts on the money in direct purchases, since in secondary schools they have exceeded 15,000 million dollars. Instead, traditional art managed to raise an estimated $50.1 billion.
‘Quantum’ is the first ever created NFT. Since then, many digital works have been sold, both at auctions and on OpenSea —the main market for NFTs—. The first edition of Wikipedia or the first tweet in history has been sold. Even the third most expensive work of a living artist sold at auction is an NFT: ‘Everydays’: the first 5,000 days, by Beeple (Mike Winklemann), was sold in March 2021 for 69 million euros.
Despite having been on the lips of many for some time, the terms that surround them generate ignorance and even rejection in part of the population. The definition of NFT is “non-fungible token”. That is, “a limited and unique object that is within the blockchain – a decentralized data storage system in which you can verify at all times who has been the creator of the object and the transactions that involve it -“, as explained Daniel Garcia, CEO of Polygonal Mind, a digital creative studio dedicated to imagining, designing, and developing NFT plots in existing metaverses.
It is, in the terms of Álex Granados, responsible for the dissemination portal NFTesp, “like a CD and a ticket”. “A CD because it is a medium, in this case virtual, to which any type of file can be associated —an image, a song, a disk, a 3D model…—; and a ticket because it has an associated record: when you create an NFT, a serial number and information are created – who created it, what transfers it had… – which is recorded in the blockchain”.
The irruption of this form of art in the market has shaken the foundations of what is established. NFT trading skyrocketed in 2021 and “experienced a peak in August,” as noted by Mason Nystrom, senior data analyst at Messari, the first registry of disclosures for blockchain projects. As of Jan. 11, however, “OpenSea volumes stand at $2.3 billion, which is on track to set a new monthly record for NFT volume on this platform.”
Meanwhile, the world of conventional art tries to study whether the figures that are moving, “which are bestiality, whether they are real or not”, as Llucià Homs, an art analyst for more than 30 years, questions. Experts study the phenomenon to know “if it will end up being a bomb that will shake the foundations of the art market or simply a bubble like so many others we have seen.” “When you analyze a bubble you see that there is no single pattern of growth or bursting. We know how it is generated, but not its consequences”.
In every bubble, however, there is an opportunity. We are museums is a wide community of creators whose objective is to study the future of museums to turn them into the axis of society and an agent of social change and environmental awareness. Its founder, Diane Drubay, considers that, although some bubbles appear and burst quickly, “they can create a space to experiment and they can be good”. “It is through the eye of the creator that people can tell if it is a good bubble or a good investment. As in traditional art, the word of the creators has a very crucial role to play, ”she recalls Drubay. “Even if we were to say that the NFT space is a highly anonymous and decentralized space, we still need to make sense of this big mess.”
Every great revolution is born surrounded by skepticism and speculation. In addition, when this is accompanied by a general ignorance of its operation and very complex terms, differentiating scam attempts from opportunities is a difficult task. “It’s like the internet 15-20 years ago, when you received the typical mail from the Nigerian prince who had a million euros and people fell for it. We are in a period in which people do not fully understand technology and it is easier to fall”, laments the creator of NFTesp.
The ecosystem, however, has changed. Since the end of 2018 and the beginning of 2019, when only “investors who already had money in Ether or Bitcoin and were experimenting” bet on NFTs, recalls the CEO of Polygonal Mind. Now “there is a boom in the market and that has dragged NFTs to be much more seen and many more people have entered, not just the traditional crypto investor.”
“The problem comes from trying to spoon a bowl of soup into someone who doesn’t want to drink it,” Daniel García points out about the skepticism of many. Like all technology, its globalization in user experience implies its acceptance. “The NFTs do not need to be art, metaverse or something excessively crazy,” says García, they can also be “concert tickets whose purchase contracts specify that if they are resold at a higher price, the remainder will go to the issuer of the concert. NFT, thus eliminating reselling.”
It is in this constantly changing artistic and creative space that traditional museums must focus their gaze. “The big museums must get their act together,” says Homs. After a year in which the NFTs have skyrocketed their sales in the primary and secondary market, the great pieces are already in private hands, which prevents the main museums from “making a relevant collection, since they do not have the budget for it”. “The big pieces have already been sold —recalls Homs—, but it’s up to the museums to buy some so as not to be left out of the game”.
The parameters have changed. Those criteria that allowed knowing why a work cost money or not have been shaken thanks to NFTs. Despite the fact that “one does not have the feeling that” Beeple’s work “will go down in art history beyond its price”, says Llucià Homs, the truth is that the digital world has once again opened up a range of opportunities for creators that does nothing but expand. This is only in art: NFTs have already landed in video games and in sports and their explosion has been tremendous. And it’s only the beginning.