Art NFTs Aren’t Dead, But They’ll Never Be The Same
…and despite the industry being on life support, blockchain will prevail.
Art NFTs are dead. NFTs are dead. Art is dead. Everything, at some juncture, is widely regarded as dead, and its state of living really isn’t relevant to that.
Whenever something is proclaimed to be dead, it’s usually as a result of profound change; music is dead whenever a new sub-genre offends the ears, chivalry is dead because gender roles changed, and NFTs are dead because the bubble has burst. And yet, music is as important as ever, there are still chivalrous human beings, and NFTs are going nowhere.
How we perceive NFTs, however, will never be the same.
The NFT Bubble
Art NFTs confused the world, including me, and on paper, I ought to be the least confused of all. I have a background in the arts and I work full-time in Web3.
Nevertheless, 10,000 algorithmically-generated cartoons each selling for the price of a house mystified me as much as it did the Web3 detractors.
This isn’t to say that blue-chip collections didn’t justify their price to a degree; the demand was not only overwhelming, it came from some of the wealthiest and most famous people on the planet. The issue for me was that too many without cultural significance were selling for fortunes to speculators, and it was wholly unsustainable.
2022 saw the collapse of these exorbitant prices, gargantuan trading volumes, and the perpetual influx of new and valuable NFT collections. Even Beeple, who has sold one of the most expensive NFTs of all time at $69 million, was confident the NFT market was in a bubble, and last year, the bubble burst.
There have been lots of bubbles throughout history, with the housing market and the Dot Com bubble being recent, infamous examples. Without any sort of background in economics, I can still safely observe that a bubble existing and even bursting is not indicative of no value, just inflated value. That is, houses are still valuable and so are websites and internet organizations.
For some reason, NFTs are treated differently in this regard – despite internet organizations suffering a similar fate in the ‘90s.
The Problem In Art
The issue with new technology bubbles is that without time for the tech to embed itself into modern life, it can feel that once the unsustainable attention levels fall away, there was nothing worth looking at to begin with. But, like the internet, blockchain has high utility and thus, high potential value.
The preachers of blockchain’s utility – a camp I’m firmly in – may scoff at art NFTs as a poor application of the technology and that we will have far greater uses of it going forward. They are both right and wrong.
Yes, blockchain will affect and improve many industries, some more “important” to society than art, but art NFTs are not dead, nor will they die in the immediate future. Why? Because NFTs solve a persistent problem for the art industry.
You will have likely heard some TEDx talk or TikTok influencer harping on about solving problems being the root of a good business, and that’s provably true. If there’s a pervasive problem in an industry and you solve it, your palm will be crossed with silver.
For several decades, art has had a problem that hadn’t been solved: digital ownership.
Damn-near every sector of business, every facet of life, has become digital to varying degrees. Inevitably, art has too, with the rise of digital art, and that extends to photography as much as drawing on a tablet. The issue with digital art is that it isn’t marketable in the same way as physical art because ownership was broadly impossible.
Although digital art has been around for years (listeners of The Mint One Podcast will know my teenage digital art is still on DeviantArt!), it’s struggled to find its place in the art world. The issue was that the art couldn’t be owned, in the same way you’d own a physical painting. This issue was muddied with photography and the ownership of negatives, but as photography went digital, the digital art problem only got bigger.
“Right-click save” is a running joke in NFTs, but it was the state of play for digital art; why would somebody pay to own an image they like when they can download it for free?
Yes, you could argue that “true fans” wouldn’t do this and the artist ought to cultivate a loyal following – a discussion that’s re-emerged regarding NFT royalties – but that still isn’t a water-tight business model.
If you strip away the wild inflation of NFT prices – outside of some blue-chips that still warrant massive price tags – there’s a solution to a multi-decade old problem.
The foundations of NFTs are true, verifiable, digital ownership. Whether the NFT is one of 10,000 AI-generated cats that can’t find a buyer, or a one-off composite of 5,000 hand-made pieces of art selling for $69.3 million at Christie’s, the fundamentals remain the same: they’re both utilizing the wholly new possibility of truly owning something that’s digital.
Where We Are Today
NFTs today as like websites in the ‘90s – annihilated by the bursting of the bubble, but still useful and thus valuable, albeit not all to the same degree. The vast majority will perish, a percentage will persevere (largely because it’s the best way for a digital artist to release work), and a handful will remain.
I will be as bold as to say that we will never see art NFTs reach the peak trading volumes and prices we saw at the height of the bull market, but that’s positive. Instead, we’ll see expensive NFTs that warrant their high prices through talent, cultural importance, and rarity.
Art NFTs, like the rest of the crypto industry, are reeling from the crash, but art NFTs will only be as “dead” as art is – which is to say, demonstrably not dead.