News, Culture & Society

Cryptomania craze sweeps the world of art

InsidePadua’s Arena Chapel, a series of fabulous frescos by Renaissance painter Giotto adorn the walls. In one, banker Enrico Scrovegni can be seen kneeling in front of the Virgin Mary, begging for forgiveness. 

He is said to have commissioned the entire set of works to atone for the great sin of charging interest on loans, which was then frowned upon by the Church. But while our attitudes to lending have changed, the symbiotic relationship between money and art continues. 

The role of patronage may even be enjoying something of a renaissance for the digital age, thanks to new technology (depending on your point of view). 

Mike Winkelmann’s huge collage of images, called ‘Everydays: The First 5000 Days’, was sold as a computerised asset, for £50m

For with the spread of ‘cryptomania’, artworks are increasingly being tracked using digital ledgers and sold with tokens to ensure their authenticity. 

So popular is this trend that a completely digital work by Mike Winkelmann, the graphic designer known as Beeple, recently sold for more than £50million when it was auctioned by Christie’s. 

The huge collage of images, called Everydays: The First 5000 Days, was sold as a computerised asset, to be downloaded into the digital ‘wallet’ of the successful bidder. It marked the first time Christie’s had sold a completely digital piece of art in its 250-year history.

The auction house also accepted payment in ethereum, the second most popular digital currency after bitcoin. 

Crucially, the Beeple artwork was tied to a so-called non-fungible token or NFT. This is a unique crypto-graphic token, essentially a computer file that demonstrates proof of authenticity. 

Token art: Works such as Banksy’s Girl With A Balloon (left) can now be sold as a computerised asset

Token art: Works such as Banksy’s Girl With A Balloon (left) can now be sold as a computerised asset

NFTs exist on the blockchain, the digital ledger system that can be viewed publicly, and traded freely. 

Somewhat confusingly, the owner of an NFT does not hold the copyright to a work, but rather proof it is an original and the ability to sell it on. 

That has not put off enthusiasts, though. Twitter founder Jack Dorsey sold an NFT of the first ever tweet for £2.1million, while others have included the newest album by Kings of Leon and a host of artworks being sold on online marketplace Opensea. 

But nothing has taken off quite like NFT art, which has generated sales of £140million in the past month, according to market tracker Nonfungible.com. 

Supporters say the technology is a real breakthrough for the art world, allowing sellers and buyers irrefutably to prove authenticity, something that has long been a t ricky issue for an industry where famous works can disappear from view or reemerge sporadically.

Beeple - whose real name is Mike Winkelmann - sold his artwork tied to a so-called non-fungible token or NFT - essentially a computer file that demonstrates proof of authenticity

Beeple – whose real name is Mike Winkelmann – sold his artwork tied to a so-called non-fungible token or NFT – essentially a computer file that demonstrates proof of authenticity

In the past week alone, a single piece of pixelated work that is part of a series called Cryptopunks – one of the more popular NFTs – sold for more than $1million. 

Artists and collectors are also beginning to securitise collections of artworks and sell shares in the musing NFTs. One example is a collection being launched by London-based investment platform Artcels, featuring works by Banksy, Kaws, Damien Hirst, George Condo and Jeff Koons. 

The price of a single share in the portfolio – called Millennials – is $1,000, with up to 250 shares being made available. 

Buyers will be able to attend viewings of the artwork multiple times a year at galleries in London, Los Angeles, Mykonos in Greece and Shanghai. Artcels co-founder Elio D’Anna, of Mayfair-based House of Fine Art, said it is being aimed at young people who want to invest in high profile art but may previously have been priced out. 

Buyers can fill out paperwork the old-fashioned way or simply obtain a share certificate digitally, in the form of an NFT, which is stored in a digital wallet. 

This means they can be freely traded afterwards as well, with any transactions recorded on the blockchain. 

D’Anna says NFT sales have ‘exploded in the last few months’, mostly for completely digital works – those you can never hold in your hands. 

Artists and collectors are also beginning to securitise collections of artworks and sell shares in the musing NFTs

Artists and collectors are also beginning to securitise collections of artworks and sell shares in the musing NFTs

And although his gallery offers to send buyers high resolution, digital copies of the works they purchased, most people aren’t even bothered. ‘Some people do not care about that at all,’ he explains. 

They just want the tradable value of the token – they believe in owning digital assets, the collectible part.’ He is convinced NFTs can be a force for good, because their ability to be written as digital contracts means artists can continue to receive royalties indefinitely, every time they are sold on. 

Middle-men and other parties can also be written in. 

‘That is amazing and it is going to create huge liquidity for the art market, because the creator of the media will get an ongoing royalty forever,’ D’Anna added. 

However, even supporters have their doubts. Robert Norton, boss of digital art verification firm Verisart, has branded the NFTs craze ‘a moment of collective hysteria’. 

And after the Christie’s auction, Beeple himself converted his haul of ethereum into cold hard cash, saying in an interview later: ‘I think it’s a bubble.’ 

He added: ‘If it’s not a bubble now, I do believe it probably will be a bubble at some point, because there’s just so many people rushing into this space.’ 

Yet that has not put off artists around the globe – Damien Hirst among them – from gearing up to mint thousands of their own digital tokens. What Giotto would have made of all this is anyone’s guess.

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