It has been difficult for the traditional art market to accept NFTs. While some projects have achieved financial success and critical praise, others have failed, remained unsold, and been buried beneath a mountain of visual clutter. And, just as the art world was warming up to fine art NFTs as a result of smart efforts like as Frank Stella’s geometry, the market collapsed. On the Artist Rights Society’s ARSNL platform or Peter Wu’s digital displays at Epoch Gallery, the crypto landscape looks to have collapsed, casting a chill that many worry will become permanent.
Since bitcoin’s November 2017 peak of $68,000, both it and Ethereum have lost 75% of their value, culminating in the collapse of digital currency exchange FTX, a moment deemed by many to be the worst in crypto history. relative to the “Lehman moment” As Co-Head of the Fine Art & NFT Practice Group at Cowen Debates Abraham & Shepard LLP, I am frequently asked by clients and friends whether fine art NFTs have become obsolete after the dissolution of FTX.
It’s important not to ignore the mistakes or more troubling reasons behind crypto’s dramatic crash, but it’s also important not to ignore the many ways blockchain technology could change the art world for the better.
Even though Web 3 technology is developing quickly and more people are learning about it and its potential, blockchain, crypto, NFTs, and digital assets are still often used interchangeably, especially in the art world. This makes consumers confused. The important thing to know is that both blockchain technology and NFTs use crypto to work, but it’s not the same as betting on crypto. So, using crypto as a tool to register NFTs on the blockchain is a work in progress that needs to have real value if people want to keep registering information on the blockchain. This is different from price speculation that is made up by pumping up a wishful crypto future in a careless way.
Also, NFTs are not magical things that create value where there was none before. NFTs are like empty cardboard boxes in the digital world. They can be used to package assets, utilities, or experiences. One immediate good thing that came out of the crypto winter and FTX bomb cyclone was that it showed that the packaging was oversold as having enough value on its own. Real In the long run, the value won’t change because of how it’s packaged.
On April 13, 2022, people in Yogyakarta went to the RJ Katamsi Gallery at the Indonesian Art University to see an exhibition called Indo NFT Festivals. Devi Rahman / AFP via Getty Images In the world of fine art, this means putting together meaningful art in a digital format that will appeal to both digital and traditional collectors.
Instead of focusing on a small number of commercial ventures, what is really needed is for many industries to agree on reliable standards and protocols. Even though some standards and protocols may be used in more than one market, we need more than one solution that works for everyone.
After the NFT-driven crypto-orgy of 2021, when the lines between markets became so blurry that they didn’t exist anymore, 2022 sees the return of market lines and the realization that not all NFT projects are the same or relevant to everyone. Cryptocurrencies will lose value, which will speed up the return to more thoughtful ways of doing things. It would be better to take a more vertical approach and plan everything, from individual projects to long-term business strategies, with the needs and wants of consumers in mind. Even though there may be some overlap, it turns out that people who like video games or collectibles may not be the same as people who like fine art projects or doing good things for others.
With the promotion of several digital fine art projects that will be shown at the upcoming Art Basel Miami, we can see that NFTs are not yet over in the art market—they are just getting started.
Take, for example, the interesting projects that Aorist.art, an NFT marketplace that cares about the environment, has put out, such as Sophia the Robot by Nancy Baker Cahill and a conversation with Quayola. effort du soir, Or, the partnership between Tezos and Art Basel will let people make NFTs with AI portraits of fairgoers made by German artist Mario Klingmann. That’s not even counting the many projects by independent artists that were shown in gallery booths and at satellite events.
Fine art NFTs are not dead, but the term “NFT” might need to be changed so it doesn’t make people think of Ponzi schemes and gambling. Blockchain technology still has a lot of untapped potential to make normative changes in the art world, from trusted certificates of authenticity to automatic licensing and limits on how artworks can be shown or resold. NFTs could be the rocket fuel of 2023 if there was less speculation, more real innovation, and smart advocacy for artists’ rights.
Instead, let’s focus on making market-specific conventions that can serve as the basis for long-term business practices; making more advanced, industry-specific business tools; and giving art lovers a good reason to be interested in blockchain’s potential to bring transparency, credibility, and fairness to a market that has traditionally been unclear and unfair.
Like the dot-com bust of 2000, the exponential growth of the crypto market in such a short amount of time was based on shallow, bad financial principles, and its collapse will make way for long-term growth. Also, just like when the dot-com bubble burst and the survivors built a solid foundation for online business, blockchain companies with strong values will rise from the tundra and become the foundation of future digital innovation.