A Bullish Case for NFTs COLLECTORS ARE BEGINNING TO EMBRACE ARTWORK THAT RESIDES ON COMPUTERS B y M a r k H e l f m a n
A
t some point in the 20th century, adding machines became so sophisticated that they crossed a line and became computers. Their progression was all about numbers, practicality and programming. But the rise of the computer hasn’t dominated the human spirit or dulled the need for human expression. In the form of non-fungible tokens, or NFTs, the visual arts are beginning to thrive in the digital world.
D I G I T A L
D I V E R G E N C E
“NFTs are not a new artistic medium in the way that oil paint, printmaking, photography or video art were ... NFTs are financial instruments.” Sebastian Smee, Pulitzer Prize-winning Washington Post art critic
“I am bearish in the short term on crypto asset valuations but bullish long term on DeFi.” Tom Sosnoff, co-CEO of tastytrade “Bubbles burst and prices collapse to the fundamental value. As NFTs have no earnings, or historic values and not much intrinsic value, it seems that the markets for them are driven rather by the greater fool theory.” Paul Hallwood, professor of economics, University of Connecticut “Next year [2022] is really going to be the year of NFTs.” Jesse Powell, CEO of crypto exchange Kraken 34
Artwork in what some consider a new digital medium is bringing tens of millions of dollars at auction, and some critics are lauding the best NFT artists as the Picassos of Generation Z. What’s more, NFTs offer more security than paint on canvas because the technology documents their digital authenticity and ensures their scarcity by preventing unauthorized duplication, proponents say. Those advantages are combining to attract artists, collectors and speculators who buy or sell high-dollar NFT creations. Let’s take a closer look.
PERKS OF OWNERSHIP
For owners, the advantages begin with the right to use a mobile phone to license the work of art to anyone, anytime, anywhere. But the potential benefits don’t end there. Owners sometimes share in revenue from the sale of merchandise related to their artwork, receive a cut in the artist’s royalties from subsequent creations or qualify for a line of credit tied to the value of the art. Possessing an expensive and acclaimed NFT can also enhance the owner’s status in some social circles. Placing the winning bid at a high-profile auction, for example, can bring invitations to attend exclusive events and join private clubs. Owners also enjoy the peace of mind that comes with knowing that the blockchain validates the artwork’s authenticity and ensures its
Luckbox | March 2022
2203_TOPICS_Crypto.indd 34
1/27/22 4:49 PM
