Business Art WELZ & CO.

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Thereis no doubt that the art industry is in a state of constant flux, with specialists, auction houses and collectors witnessing various developments and changes in trends throughout the years. The emerging world of digital art has been making waves within the art market for the past few years with many artists arguing that it is the next art movement which directly challenges the need for gallery spaces and physical art forms. It is only natural that NFT’s (Non-Fungible Tokens) and Crypto Art have crept into the art world as a continuum of this movement, with it sitting on the threshold of becoming the next force in the art market. With the introduction of NFT’s and blockchain technology, this new model of ownership represents a huge opportunity for digital artists and is worthy of exploration.

Even though NFT’s have been around since 2014 we have only seen a significant presence on the art market from 2019, with the first premium NFT auction taking place at renowned auction house, Christies, in 2021. Digital artist Mark Winkelmann known as “Beeple” sold his digital collage entitled “The First 5000 Days” for a staggering $69.3 million (Forbes; 2022).

Non-Fungible tokens are essentially digital artworks with an aspect of certifiability. Fungible is a financial and economic term which means “easy to exchange or interchange for something else of the same value” (Art Basel, 2022). However, non-fungible tokens are unique, unlike cryptocurrencies such as Bitcoin, as they are not easily exchanged for something of the same value. Beforehand, a digital artwork could be replicated or copied without any trace of the original creator. However, because of the unique code connected to an NFT the artwork can now be authenticated. This resolves an ongoing issue for digital artists as it essentially creates scarcity which should increase value.

These digital art forms are created using a framework called blockchain. Simply put, blockchain is made up of public ledgers which record transactions and are used to create both cryptocurrencies and NFT’s. Blockchain has always been associated with cryptocurrencies, however, because of NFT’s their basic function has evolved into a system which governs information and ultimately protects untampered knowledge. Blockchain is essentially like a digital signature and encrypted within it is the transactional history of the ownership of an NFT, hence the ability to authenticate a digital artwork.

The ability to replicate or forge an artist’s work has always been an issue which has plagued the art world. However, with NFT’s the blockchain associated with a specific NFT cannot be manipulated or replicated, creating an irrefutable form of provenance which cannot be altered by any parties involved. The significance of this irrefutable provenance can only help galleries and auction houses with salability of the NFT.

The appeal of NFT’s is their ability to be traded in marketplaces such as Opensea, Rarible and Nifty Gateway to name a few. Also, there is, in most cases, the allure of royalties associated with the NFT’s. Occasionally, an artist can ensure that they still receive royalties every time the ownership of the NFT is transferred. Although digital artwork can be downloaded and shared amongst anyone - ownership is still conferred onto those who own the underlying token. To put it in layman’s terms, anyone can download an image of the Mona Lisa by Leonardo da Vinci from the internet. However, they cannot use or purpose that image for marketing resources for their own company but, if you owned the NFT of the Mona Lisa, you could purpose it for such means. The usability of NFT’s is open ended at the moment as many people are finding various ways to profit from these tokens. The limit of these applications remains to be seen.

February is an exciting month for Stephan Welz & Co. We are proud to present the first NFT auction in the history of the company. The auction will feature a careful curation of some of the works from renowned South African artist Adriaan Boshoff. Collectors will be able to purchase an NFT version of works that are featured in prominent museums and private collections, along with the copyright. Whether you are new to NFT’s or already a member of the community, we invite you to discover, bid and join us on this exciting journey. For any queries on the available lots or further information on NFT’s, contact us on 011 880 3125 or info@ swelco.co.za

We also encourage clients to diarise the dates for our upcoming premium auction in Cape Town on 21-22 February. To view the available lots, visit www.swelco.co.za where one can register and also bid. For condition reports or any queries, contact us on 021 794 6461 or at ct@swelco.co.za

Conti, R. Curry, B. & Schmidt, J. 2022.

What Is An NFT? Non-Fungible Tokens

Explained. [O]. Available: www.forbes.com/ advisor/investing/cryptocurrency/nft-nonfungible-token/ Whitaker, A. 2022. The artistic value of an NFT. [O]. Available: www.artbasel.com/stories/art-market-reportamy-whitaker?lang=en