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Cryptoart in a floating box

The Bizarre Practice of Buying Cryptoart

An expensive link to a digital art File

Cryptoart has evolved from “what the heck is it?” in 2014, to developing a market, to creating an aesthetic and movement all its own. An astounding single sale punctuated this digital art scene earlier in 2021. The maker, going by the pseudonym Beeple, sold a digital art piece for $69 million. That is for a digital file in a blockchain vault, not something to take home and put on the wall.

As an occasional artist, both in real life and digitally, that price tag caught my attention. 

The creation of cryptoart
For those of us who don’t live and breathe crypto, here is a brief primer on how a piece of cryptoart comes to be, as I understand it. 

Cryptoart is a way to make a piece of digital art unique. First, the art needs to be created, and that can be done by various means, including using programs to render images, sometimes using 3D modeling, animation or other digital tools. To be original, one unique piece is created on a computer by the artist. However, this type of file is easy to duplicate, so cryptoart is a way of making it one-of-a-kind using blockchain technology. 

Blockchain is a distributed database across a network of computers. The artist attaches the original digital art piece to the blockchain using a token with a unique ID number, called an NFT, or non-fungible token. The database is arranged in blocks, each block belonging to its own network, and connected to the next block, like a daisy chain, hence the name blockchain.

Whenever an NFT transaction occurs, the data is time stamped and then has to be validated across the entire blockchain, which contains a history of every transaction ever made with that specific NFT. Since the database is distributed, it means there’s no central location where the data can be easily changed, and every computer in the chain must agree with every other computer that the transaction is valid.

The artist makes only one of these tokens for the original piece of art. When you buy the work, you get to say that you own it. No one else can. However, there is no legal basis for the claim, nor is there any enforcement. The value proposition comes from creating scarcity—there is only one, and it is unique. As long as the assigned blockchain continues, anyone can read and access it, see who the registered owner is, and no one can change the record. 

You own the work and can look at it on the web, but don’t get a physical copy or even the copyright, just an entry in a public database. You could copy the image and display it as a print or motion graphic on a device, but then so could anyone else.

Cryptoart of a paintbrush and pallet

Why would anyone buy cryptoart?
Why does anyone buy any type of work of art? A person may purchase a painting or sculpture for décor in their home, but they could also hold acquisitions in a museum, where anyone can visit and see it, just like visiting cryptoart online. Or, an artist may make an original photograph, but all you ever see is a reproduction in a book or prints. 

No matter where the original piece physically resides, including on a computer, buying it still represents a person’s tastes and interests. The fact that one owns it gives them bragging rights, and cryptoart is quite a conversation piece! Even though $69 million may seem like an astounding price for cryptoart, you can draw the same parallels to a more traditional piece of art, like paying $90 million for a Koons metal balloon animal sculpture. You could buy such a metal piece for a few hundred dollars, but wouldn’t be able to say you own a Koons. There is also the classic “art piece” of a banana duck taped to the wall of a gallery, which artist Maurizio Cattelan sold for six figures on two occasions. The buyer could not take the original piece home—it is the social construct of the story behind the piece that has value.

Some people are just compelled to collect things. “Collecting is intellectual stimulation, it’s social bonding, it’s organization,” says Dr. Shirley Mueller, a neuroscientist and collector whose book “Inside the Head of a Collector: Neuropsychological Forces at Work.” Mueller also connects the pleasure center in our brain feeding off dopamine that is released when an individual buys something, especially if it is rare and unique.

The market for cryptoart
Anyone can buy cryptoart, but there are also “cryptopatrons” where the digital art is collected by the “cryptorich.” These are savvy technologists and investors who got into cryptocurrency early. Just like buying a painting by Picasso, the act is partly social. At some point they may be at an art auction at Sotheby’s or rubbing elbows at a high-end charity event or their own private gathering, talking about who bought what. 

Others may buy cryptoart as an investment. Like any hot commodity, one hopes the value will increase. Beeple’s sale made headlines because it was unique. Most cryptoart sells for much less, in the tens and hundreds of dollars, supporting a large community of artists. Because cryptoart is popular right now, some resale values have gone up. 

However, determining if there will be a cryptoart “bubble” is hard to predict, and investment seems risky. Consider that while cryptoart has been growing over the past few years, it did not boom until the pandemic. We’ve been cut off from each other and on our computers. There is no travel involved in creating, selling, buying or viewing cryptoart. Will interest remain high when our mobility changes?

Support for artists
Cryptoart finally creates a platform where natively digital art can effectively be bought and sold. Artists can participate from all over the world, connected by the internet.

This is probably a good time to point out that Beeple is a real person named Mike Winkelman, an accomplished artist with a technology background. He developed his $69 million piece by creating and posting a unique work of digital art every day for over 13 years, then combining them into a collage aptly titled “Everydays: The First 5000 Days.” You can see more of Winkelman’s digital art on Beeple-crap.com

One doesn’t have to be a Beeple to create cryptoart. Everyone can participate, no matter what their background and skill level. Using blockchain technology frees artists from being tied to a gallery or asking permission to take part. Artists can also remain anonymous. This can be very freeing, especially when creating art that reflects contemporary social issues. There are financial benefits too. Blockchain platforms often take little or no remuneration from artists. 

The cryptoart I have observed online has a certain potency of expression that seems to spin a story and be more off beat and wildly creative than other pieces I have observed in galleries around the world. But that could be in part because these digitally constructed iterations have not had widespread exposure as art until the past few years. 

In our connected world, it seems time that what we craft with pixels to share as creative expressions deserves attention, and cryptoart its place within the definition of “what is art?”

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