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NFT meets the traditional world: how do outsiders view the NFT boom?

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Some say it is "not art" at all, but as NFT supporters like to say: "The same thing has been said about Andy Warhol."

How Nfts Became Art, and Everything Became an NFT How Nfts Became Art, and Everything Became an NFT

Originally written by Jeff Wilser

Pascal Boyart is a Parisian street artist. In January 2019, he painted a graffiti in a working-class neighborhood that was inspired by Eugene Delacroix's "Liberty Leading the People," with a modern take on it. Boyart refers to the rebels who overthrew King Charles X in France in the 19th century as the "yellow demonstrators." Some people think they are fighting for justice, while others think they will only stir up emotions to cause riots and burn down the city. The French authorities did not like the work and soon sprayed the graffiti with grey paint, as if it had never existed.

"Now, the physical graffiti doesn't exist. But the NFT version is still there, and it's valuable." "Boyart told me in Paris. "That's great."

Boyart has minted 100 copies of his graffiti into NFT at a price of 0.5ETH, with more to be minted and sold later. In the past it was very difficult for Boyart to make money from his street art, because it was very difficult to sell graffiti on the wall, and very few street artists can make as much money as Banksy. But with NFT, street artists have a way to sell their work to fans. On February 26, Boyart NFT art "Contemplations of the Red Jester" sold at the price of 75 eth, or about $112000 at the time, this is by far the largest of his income.

Boyart isn't the only artist to make money on NFT. It seems to sell for astronomical NFT prices every day, like Beeple's 10-second video, which sold for a whopping $6.6 million, and he became the first artist to sell digital art at Christie's.

Pascal Boyart

With hundreds of thousands of NFTs being born every day, it can be difficult to keep track of the latest developments, so here are a few examples: cartoon frog Hamerpepe sold for $320,000; Grimes' series of NFTs sold for as much as $6 million; One tweet from Mark Cuban sold for $952...

NFT is no longer the very niche market it once was. According to one report, NonFungible NFT trading more than $250 million in 2020, and 2021 years up to now, than NFT popularity and a higher level in 2020. And that figure doesn't take into account the nearly $230 million in sales of NBA Top Shot packs, which once would have been astronomical, with nearly 200,000 people queuing up to buy each pack.

Looking for an NFT with LeBron James' dunk record? One just sold for $208,000. Mark Cuban is also working on NFT, and things are moving at lightning speed. Less than two months after he announced he was exploring NFT, Cuban said in an interview with USA Today that he sees NFT becoming one of the top three revenue streams for the NBA within the next decade.

NFT could be art, NFT could be music, NFT could be collectibles, real estate, sports, fantasy football, games, etc. Maybe this article will become an NFT, and maybe a wedding will be cast as an NFT. Recently I heard some very "philosophical" discussion about NFT in Clubhouse: can NFT be cast as NFT? Can we play rock-paper-scissors with NFT?

It begs some questions: what is driving the NFT craze? Why is the NFT craze coming now? Is this just common hype in the crypto world? Is it a bubble destined to burst or does it really create more value for creators or collectors?

After all, when most people want to see highlights of LeBron James' tomahawk dunk, they go to YouTube and watch it for free. So why on earth do we pay millions of dollars for a virtual cartoon frog?

Why is the NFT boom starting now?

Let's start with some basics. NFTs are easy to visualize. They are very specific, such as a work of art, a song, and even digital real estate in the collective. These are things that people who don't know much about cryptography can learn easily, and they are what makes NFTs so attractive.

Explain what is the hardest part about NFT is probably the name itself, its abbreviation (NFT) and full name (Non - Fungible Token) sounds very difficult. But all you have to do is explain that an NFT is a digital asset that can't be copied or counterfeited, and people will understand what it is.

Much of crypto technology is abstract and complex, requiring an understanding of technology, programming, and economic theory. Try explaining "fluid mining" to your grandparents and see if they understand. But NFT is different, open the door of NFT and you will find a very interesting world, which attracts a lot of new blood to join.

"A lot of people may not care that much about what de-centralised finance (DEFI) is... but the average person probably really likes basketball." Messari analyst Mason Nystrom, who studies NFT, said, "A big draw like this could appeal to all the people who didn't care about encryption before."

Nystrom estimates that Defi's total user base is somewhere between 1 million and 2 million. That's not a small number, but it's nothing compared to the 42.7 million NBA fans on Facebook. Many of those 42.7 million people will be curious about the NBA Top Shot, or, as Zack Seward puts it: it's attracting interest from people outside the typical crypto nerd community.

And why did it take until now? Why not at the birth of NFT in 2017 or 2018? There are five simple reasons:

(1) The rapid development of NFT and the birth of trading platforms -- OpenSea, NiftyGateway, SuperRare, Mintbase and other platforms have been born. Compared with 2017, NFT trading is more intuitive and easier to understand for novices.

(2) The cryptocurrency bull market has made investors a lot of money.

(3) During the COVID-19, creators and collectors were trapped at home, looking for something to do.

(4) Both NFT and physical collectibles (such as star cards) have gained wider attention.

(5) High-impact celebrities like Cuban are joining the field, creating a virtuous circle that gets more people interested in NFT.

Beyond that, there may be a deeper reason for NFT's growth. "I think everyone should be concerned about the macro trends that are taking place in human society." Whaleshark, a well-known NFT collector, said he claims to be the second largest NFT collector in the world, with a collection of nearly 210,000 NFTs.

"More and more people are spending a lot of time checking their phones and surfing the Internet, and the way we live our lives is moving from physical to digital." WhaleShark said. Most of us stare at two, three, or even four digital screens every day, especially during the COVID-19 epidemic.

Whaleshark says that when we want to own something, we increasingly like to look at pictures, videos and so on on the screen. It's natural. Life in the digital world is becoming more and more like our real life, or rather, what it is. Then he went on to describe another trend. Even before NFT was born, the younger generation of collectors were used to putting real money into a digital ecosystem like Fortnite, which is not new to them, which is why the super collector says: I don't think NFT is difficult at all.

NFT: Reinvent ownership

Blockchain technology's potential to "reinvent ownership" has long sounded like bragging rights, but NFT is putting it down to earth. Take Eve Sussman, a well-known mixed-media artist (film, sculpture, photography) whose work has been exhibited at both the Museum of Modern Art and the Smithsonian.

In 2004, she created a 12-minute video for the Whitney Biennale, 89 Seconds of Alcazar, which re-enacts scenes from Diego Velasquez's classic Las Meninas from 1656. Critics raved about it. New York magazine called it a "masterpiece" and it was so revelatory that "you get a sense of what the final form of art really is."

Sussman's video is getting a second life at NFT. She works with a company called Snark.Art, a blockchain-savvy institution that works with artists to create innovative Art forms, such as engraving videos into a 2,304-slice grid. Collectors can purchase a tiny fragment as an NFT. Each of these "atoms" is only 20 pixels by 20 pixels and can be watched as a small movie. They called the new form "89 second atomization."

This is similar to the way Boyart divided his street art (yellow graffiti) into 100 pieces. But Sussman didn't settle for piecemeal ownership, and went a step further. If you buy one of Sussman's 2304 atoms, you'll see only a tiny part of the work that needs the other atoms to fit together to make sense.

In the blockchain space. Thanks to the smart contract (the code that determines ownership in the NFT), you can "borrow" their NFT from all the other NFT owners who are "atomized in 89 seconds," and when they lend you all their pixels, you can see the complete work. "We were thinking about what ownership could look like in a digital world." "Said Misha Libman, co-founder of Snark.Art.

"Very expensive art for most people is completely can't afford to buy. But if you break it into pieces, and sold at the price of $100 each to pieces, you gave is not so wealthy collectors a chance, let them become a part of the community, have a real famous works of art, at the same time also become an active participant."

NFT can take many forms. Sometimes they're just a digital version of a physical object, but that's an improvement. They will make physical assets more innovative. Perhaps nowhere is this more true than in art, such as Boyart's street graffiti. Ordinary paintings are static, as every kindergarten child knows, and paint doesn't move. But in NFT, artists can use GIFs, audio, AR to inject more life into their images.

In Boyart's Raft of the Medusa, his NFT is animated and the Raft is rocking in the water. In the Contemplations of the Red Jester, dollar bill (or euro) eerily floating on the floor, a clown to lie down on the chair, looked bleak.

To be sure, techniques like this have long been possible in digital art, but they haven't solved the problem of scarcity. NFT solves this problem, and smart contracts allow artists to program future changes to their work. For example, Boyart is now working on an NFT whose layers will change over time. NFT art can be programmed to show different images triggered by real-world events, such as the weather, or Christmas morning, or who won an election.

NFT is attracting artists from traditional fields outside the blockchain world. Take Elizabeth Meggs, an oil painting artist from Brooklyn, New York. Every week she talks to Zoom with other artists in her studio, and they talk more and more about NFT.

As Marion Maneker told Artnews: "The first unspoken rule of art conversation in Clubhouse is that all talk eventually turns to NFT obsession." There's a reason artists got into this field earlier than others. "Artists often discover amazing things before anyone else, like renting a studio on a block before the rent has skyrocketed," Meggs says.

Meggs is excited about making her own NFTs and how creative they are, especially as they also make the art world more inclusive of women and people of color. She points out that 87 percent of the collections in mainstream museums in the United States are male, and 85 percent are white men. NFT can make it fairer, by connecting creators and collectors directly before they do, thereby eliminating a bias that has never disappeared in history.

"I want to do is making art," Meggs said, "not with my life and psychology to fight a severe bias system, in this system, I have to rely on the so-called key collectors, such as those that exist in the incredible bias art institutions, otherwise there is no chance of success. And NFT let me as if in a world that is full of all kinds of possibilities, all roads lead to Rome, no one will cut your way."

Meggs isn't overly optimistic -- she understands that the crypto world has historically been as male-oriented as the traditional arts, but she remains hopeful. "I'm in the middle of inviting every female artist I know to do NFT," she said. "It's a once-in-a-lifetime opportunity!"

Upending the traditional field

Another feature of NFT is the incentive for artists: the ability to collect royalties. This is something that does not exist at all in traditional art. For example, let's say you're a very young artist and one of your paintings sells for $1,000. But you think it's worth more. When you become famous years from now, say, 30 years from now when the painting sells for $30 million, how much royalty do you get? In traditional art, you don't get paid a cent. (The actual situation varies from country to country. "Also known as artist resale rights, offering resale fees to artists or their heirs...... is very common in many countries internationally, especially in Europe. Unfortunately, we don't have this provision in the United States." Meggs said.

NFT is different. Royalties can be programmed into your work through smart contracts, so every time your painting is sold, you earn a portion of the income -- forever. When Boyart's Contemplations of the Red Jester "in 75 the eth resale price, he can also receive a 5% royalty income.

The same concept applies to music. For example, Vandal, a Canadian rapper and producer, released a song called "Rap Crypto" in 2017.

At the time of the interview, he wore a small red hat and a gray goatee. When Vandal first heard about CryptoKitties, he was unimpressed: "What the hell is this? Why collect cats?" But after that, he saw greater potential for NFT. He began to explore NFT music and became fascinated with the DAO, and soon he formed DAO Records, which has signed 100 musicians and released about 50 music NFTs. (Vandal says he's not the first musician to make music NFT, and he thinks Connie Digital is the "OG" of music NFT.)

For Vandal, music NFT is more than just a publicity stunt, a fad or a trendy way to make money. "The current model of the music industry is broken," he said, a problem that dates back to the days of Napster. "Then Apple came in and charged 99 cents per MP3 player. But who gave them the right to price the music? It devalued the music." Streaming services like Spotify or YouTube aren't much better either, because "they pay so little to artists and take most of the revenue themselves. And there's no way for artists to interact with their fans." He said.

NFT solves all these problems, Vandal said. Artists can price their music according to what they choose, and NFT allows artists to connect directly with fans, and you can share anything you want with fans. It's a great way to filter loyal fans, grow a community, and separate yourself from a platform you can't control.

It's understandable that artists like Kings of Leon have taken a keen interest in the NFT, and have released an album in the format. Artists can tie NFT to real-world benefits. Kings of Leon's NFT, for example, includes a "Golden Ticket" that entitles the holder to a front row seat on every tour of the band for life.

Kings of Leon isn't the only person (or organization) looking into NFT ticketing. "It's a wonderful case." Carolin Wend, co-founder of Mintbase, said she thought ticket-based NFT would make it easier for organizers of events like music festivals to split revenue with partners.

Say you're the promoter of a festival, and for every ticket you sell, you get 5% for the DJ, 5% for the reggae band, 10% for the venue provider, and so on. Payments will be instantaneous, transparent, and all confirmed and verified on the blockchain. "It's so exciting, and it gives people in the creative economy a fair share of the income." Wend said.

It may be some time before a company like Coachella or Ultra fully accepts the concept of NFT tickets, just as NFT is unlikely to completely "disrupt" the traditional art world any time soon. To put that into perspective, Misha Libman of Snark.Art says the Art market is worth about $60 billion a year. "Digital art is still less than half of that," he said. "It's nothing compared to the traditional market."

To get a sense of what the traditional art world thinks, I spoke to a traditionalist whom art lovers will surely recognize as the appraiser of PBS's Antiques Roadshow. Nicholas Lowry, known for his garish plaid suits and hand-held mustache, is also the chief auctioneer at Swann Auction Galleries, New York's oldest local Auction house.

"It was funny how almost everyone was suddenly sharing things about NFT with him, like constantly forwarding him articles about it and so on, and oh my gosh, it seemed like the whole world was talking about it." Lowry said.

So is he ready to jump on the bandwagon? "We're not a cutting-edge technology company," Lowry said, pausing. "I don't want to be the first to eat it, but I don't want to be the last to eat it."

He is in a "wait and see" attitude. Maybe it's the future, but maybe it's just a bubble. "Let's see if it flourishes when Musk doesn't buy it anymore."

NFT early experience

One reason for the boom is that it is now so easy to cast your own NFT. "Today, anyone can take a picture of their plant, cast it into an NFT, and immediately hang it up and sell it," Libman said.

So I decided to give it a try.

I recently moved to Denver, and I don't have any photos to hang on my wall. So I picked out some of my favorite photos from my travels and framed them. I chose a 30-by-50-inch photo of an Icelandic glacier to hang on my biggest wall.

Maybe I can sell this picture as NFT? If I think it has some value in real life, like as a piece of art to hang on a huge wall, maybe other people will feel the same way, right? I also wanted to experience firsthand how NFT works.

I immediately set up an account on OpenSea. The process was very simple and quick, and when I set the starting price of the auction, it told me the lowest price would be 0.4ETH, which at the time was $540, a ridiculously high number. (You can set a lower price, or you can start the auction, and the starting price of the auction is 0.4eth. Maybe I have a problem with my operation. But then again, there may be people who recognize its value. A lot of cryptocurrencies are worth a lot of money because people believe it's worth a lot of money. For example, Dogecoin has so many supporters that maybe some people will think my photo is really worth 0.4ETH.

Before I list my pricing, there's a small hitch. I need to pay a one-time Gas fee to OpenSea, after which all my sales Settings are no longer required to pay Gas fees. At the time, the fee was $91. Soaring Gas bills are a common problem in the space, which is one of the reasons some NFT platforms use different blockchains (for example, the NBA Top Shot uses the Flow chain).

"The average person would never spend $50 to build an NFT," says Wend, which is why Mintbase switched to Near Chains. "I'm sure Ethereum is a good testing ground for many people, but it's not the future, it's just too expensive, it's too bloated." (Ethereum proponents, of course, have their sights set on Ethereum 2.0.)

Posting my photos suddenly became an expensive thing, but I still paid a fee. When my new NFT was cast, I watched it appear in the new OpenSea list stream. They operate all the time, like an industrial assembly line, and the speed with which they operate gives an idea of how hot the NFT space is these days.

But the NFT market is at least somewhat rational: my picture is not worth 0.4ETH. It failed to sell, so I re-listed it for 0.01ETH, which is $16, and as of press time, there was still no sale.

NFT is a status symbol

Let's turn to the buyers: Why on earth would people pay thousands of dollars for low-res art that is less advanced than Pac-Man?

I thought there were only two possibilities: aesthetic or they thought it would make them money.

Then I learned about the third explanation. I spoke with Jamie Burke, CEO of Outlier Ventures, a blockchain venture capital firm. Burke works part-time as an NFT collector and knows the community well. He has founded an invitation-only Discord channel called 100xArt, which is the largest directory of NFT collectors dedicated to creating an art block on Decentraland. Burke's theory is that people buy NFT in order to improve their status in a particular community.

"You can think of NFT as the new social currency." Burke said. In some crypto circles, they are proof that you really belong to the community. When Burke first saw early, highly pixelated NFT art, such as CryptoPunks, aesthetically speaking, he didn't like them. He even said to himself, "This is not something I want to hang on my wall."

After he talked to more collectors in the community, he quickly realized that NFT had little to do with the content itself. Ownership itself is what matters. "Having a Cryptopunk is proof that you were on the first NFT project, proof that you understood it before anyone else. On the surface, it's a digital badge of honor."

It reminded Burke of why people bought albums back in the day. Of course, maybe part of the reason you buy an album is because you love the songs and also see it as a beloved piece of art. And this piece of art gives you a higher standing in your record fan community.

"Think about what the Internet has done. Digital music has destroyed all that," he says. "Music has become something you only consume on streaming...... The concept of owning a piece of music is gone." So while NFT may be a radical new technology, in a sense they are tapping into something primitive and ancient, tapping into what Burke calls "a real human aspiration."

Or maybe splurging on NFT purchases is a way to show off how big a cryptocurrency fortune you have. Go to Twitter and ask GMoney.ETH why they paid 140 ETH (about $150,000 at the time) for a 24 X 24 pixel Cryptopunk that looks like a 1983 Atari game art.

As GMoney explained on Twitter, as he spent more time getting to know the crypto community, he realized that "being the owner of CP[Cryptopunk] is roughly equivalent to being a member of an exclusive club." Then he immediately paid for it. "When someone buys a Rolex in the real world, they're not buying it for the utility of the watch, because a regular $5 watch can have the same utility value. So people buy Rolex just to show off their wealth to other people."

GMoney purchased his digital "Rolex," but unlike a real life Rolex watch, which may be cheap knockoff, the authenticity of his Cryptopunk can be verified on the blockchain. That said, it's almost a foregone conclusion that Rolex will retain its value in a decade. But for CryptoPunks, no one is sure of that.

But even if the speculative bubble bursts, NFT has provided artists like Boyart and collectors like Burke with something more valuable, if only subjectively. They can be ways of creation, play, communication, organization, aesthetics. "When you look at the bull market in 2017, what drove things was media news that reported a huge wealth effect." Burke said. When people stop making money, people leave the industry. With NFT, he says, "it's not just about money, it's much more sustainable."

Of course, there are plenty of people who will complain that most of these NFTs, like pixelated frogs, memes, and satires on encryption, are "not art" at all. But as NFT supporters like to say, "The same thing was said about Andy Warhol."