If you are inside the blockchain sphere, you have been familiar with NFTs for quite some time. But, on the other hand, if you are an artist, you might have just started to learn about them. Some of your creator friends have been talking about it a lot, and one of them has even started his first digital project. You don’t quite understand how they work yet, and when your friend tries to explain it, you feel like you’re speaking different languages. Nonetheless, you are truly intrigued seeing all the debate they are raising within the art world. Why is there so much debate around NFTs though? Well, the art world seems to be quite divided about the impact they are going to have, or are already having, within the sector.
NFTs as a Threat
For some, the massive capitalisation of the NFT market, which hit a transaction volume of $10B USD in Q3 of this year, is the last step of a decades-long market transformation that changed the art world into an industry. For them, this tendency started in the late 1980s, when traditional auction houses started to sell artwork by living artists. Before, this trade was exclusive to galleries, who worked directly with the authors. When old auction houses, like Christie’s, and new auction houses, like Gagosian, entered the resale market of art by living artists, the prices skyrocketed. This had a tremendous impact in the contemporary art sphere and the business model, which attracted a lot of money, was quickly replicated worldwide. If in 1988, the Artnet Price Database tracked only 18 auction houses and about 8,300 artists, by 2018 their records accounted for 534 houses and 71,621 artists. In the past decades, bankers, financiers, hedge fund managers, promoters, celebrities, collectors, and even artists themselves, have been aggressively investing in contemporary art, particularly for its ideal format for trading and speculating. We’re now in an era where gigantic entrepots, like Freeport in Geneva, are believed to hold the biggest art collection in the world, with an estimated number of 1,2 million pieces of art stocked, and an approximate $100B USD worth. This art belongs to private collectors, who keep it safe inside state-of-the-art vaults in order to preserve their value for future speculation. This connects with NFTs because they resolve the trading problems historically related to art: its fragility and the cost and hassle of its transportation. Besides, NFTs, which are far more liquid than tangible art, enable swift, frictionless transactions and, unlike traditional sales, allow creators to maintain ownership of works and to obtain royalties.
NFTs as an Opportunity
For others within the arts sector, the enumerated characteristics of NFTs do not present a damage to the market, but, on the contrary, an opportunity. First, we must not forget that art has historically functioned as a social stratification marker. For thousands of years, in monarchies and other authoritarian regimes, both in the east and the west, rulers held the power to decide which art was good, and which wasn’t. Since Victorian times, when art left the palaces and went to galleries and museums open to the public, the bourgeoisie replaced the aristocracy, and the richest started to decide which art was legitime. There is no surprise, then, to see the art market exploding since the end of the 80s as the wealth of high-net-worth individuals grew, non-western economies emerged and contemporary art became global and trendy. What is different with NFTs is that art has not only left the ballrooms of palaces, the massive museum rooms or the top of millionaire’s fireplaces; it has entered the screens of every single person on Earth. With NFTs, the chance of completely switching the balance in the art sector is here. The chance to switch it to a world where a generation has the power to decide the art that represents them, where this art is accessible to everyone and where every creator has the same tools to reach worldwide audiences, whether they are in New York City or in the small village of Nako, in Lahaul Spiti, India.
NFTs for art2act
For us, in art2act, the fact that NFTs are community-based artistic endeavors, explains their phenomenal rise. They aren’t curated by a small group of people who decide what is excellent and what isn’t in the arts. Without any filters or middlemen, the community determines what they like and what they buy. This is why we are also deeply convinced that more people will come in and engage if we, as a community, decide to apply the same concept to the tangible contemporary art market. This entails more cultural development, new methods, increased capitalisation, and greater capital distribution. With every tool blockchain technology has to offer, art2act is here to empower artists, support in culture, improve market inefficiencies, eliminate intermediaries, and decentralise the contemporary art market. For those who wish to surf this wave and take the chance of actively participating in the transformation of the cultural sector, we are here to be the bridge they need to navigate this digital revolution without compromising their work, revenues, or creative freedoms.