Last week Beeple, an artist in the United States with 1.8-million Instagram followers, resold an artwork titled Crossroads for $6.6-million, making it the most expensive digital art piece ever auctioned on the secondary market.
Crossroads is a non-fungible token (NFT) or a digital collectable, which was traded on the Ethereum blockchain platform. The artwork has a unique encryption with the artist’s digital signature, which ensures its authenticity and that it cannot be duplicated.
Crossroads “was designed as a response to the 2020 US election. Depending on the election’s outcome, one of two videos—one featuring a victorious [Donald] Trump, the other featuring a despondent one—would play”, according to Artnews.
Trump was “deplatformed” when Twitter banned him after the riot at Capitol Hill. Others followed suit, including Facebook.
The record-setting sale came just days before another Beeple piece, a collage of 5 000 artworks created over 5 000 days, was put up for sale by British auction house Christie’s. The auction of Everydays: The First 5 000 Days, will make Christie’s the first established house to sell an NFT and the first to accept crypto.
Beeple’s profile has skyrocketed, so much so that on Sunday, crypto art boutique MakersPlace crashed amid a drop of 105 limited editions on sale for only $1 each.
An NFT can be a number of things. Last week the Nyan Cat GIF sold for about $561 000, according to Artnet. Even the NBA has cashed in by making their own digital collectables. On Monday, a video highlight of Lebron James reportedly sold for $208 000.
Carel de Jager, of the Blockchain Academy, explains that when something is non-fungible, its value cannot be directly compared to a similar item. “Apples are not fungible. You get good apples, and you get bad apples. And art is not fungible. You get good art, and you get bad art. So every piece is unique.” This sets NFTs apart from cryptocurrencies such as Bitcoin, which are fungible.
De Jager says NFTs are useful because they are 100% auditable. “The magic of the blockchain provides that. You can see that it is authentic. You can make a copy of a JPEG, just like you can take a photo of the Mona Lisa. But that doesn’t mean it’s the real thing,” he says.
“And the real thing still has value. So NFTs provide us with that authenticity layer. It shows us with 100% certainty all the previous owners of that asset, and it provides us with a 100% transparent revenue record.”
NFTs emerged in 2017, when the blockchain game, CryptoKitties, was launched. The game allows users to collect and sell one-of-a-kind digital cat characters as they would Pokemon cards. According to the CryptoKitties site, the game takes out the seriousness associated with blockchain technology.
The NFT market has only recently started to boom. NonFungible.com, an NFT market discovery tool, says the highest average token price in 2017 was $205. On Monday, the average token was $1 189.
Covid-19 probably has something to do with the NFT boom, De Jager says. “With Covid, I think we’ve seen how the world can operate digitally … We’ve now for the first time actually experienced what it’s like to attend digital concerts and digital art galleries.
“Before, creators were kind of stuck in a hole because they couldn’t get their content out. I think that was definitely a catalyst for it because it’s such a wonderful way to connect creators to the market.”