THE BIRTH OF CRYPTO ART

By Eduardo Dias & Stephanie Wruck

In the last year, the COVID-19 pandemic caused an unquestionable protagonism of work inside digital environments. As well as other production sectors, artistic making has undergone several adaptations during this period. We at Coletivo Amarelo have proposed in the last two weeks a historical investigation of the relations between art and the Internet, suggesting reflections related to the first experimentations with technology to the interventions of the NetArt movement in the 90s, which were often predictive of the performance of artists in an increasingly digitized world. The previous texts are available on our blog under the tag "Internet". Click here to read our latest post on the Net.Art movement.

In the first months of 2021 we witnessed what seemed to be the trigger for a new era in art and internet relations. NFT issues invaded social media and art groups immediately after the traditional Christie's house auctioned off a completely digital artwork for $ 69 million (or R $ 382 million).

"Everydays: the first 5000 days", by contemporary digital artist Beeple, won for $ 69 million in the last Christie’s Auction House auction. The work is a collage of the daily illustrations that the artist made for 5000 consecutive days (Image: Beeple / Christies available on BBC.com)

 

What happened? Where did it come from? Is this a new trend?

   After nearly two decades of unstable speculation, cryptocurrency wallets such as Bitcoin, have skyrocketed especially in the past year. The value of just 1 Bitcoin jumped from $ 0.34 in mid-2010 to around $ 50,000 (or approximately R $ 280,000 - Google quote: Morningstar and Coinbase, consultation 23/04/2021).

   However, not every type of product received the same possibility of introduction into the cryptocurrency market, this is because the monetary trading happening in the tech world began to demand a safer structure, since the whole transaction is made in a currency that does not exist in the real world. The Blockchain online system was created out of this need. It is a platform that acts as a cryptocurrency exchange and serves for exploration, tracking, monitoring and registration of complex transactions.

   In Blockchain, each trade is encoded as an immutable link, and therefore other objects that would need non-interchangeable value in safer transactions have now been introduced into cryptocurrency trading, such as works of art.

   But what does "objects with non-interchangeable values" mean? Imagine two situations:

  1. You are in a store and your purchase totaled $100. You have the option to pay using two  $50 bills, 5  $20 bills or 10 $10 bills, etc. Therefore, the common currency is mutually interchangeable (or fungible).
  2. Let's say you are the owner of three houses located on the same street, one that is worth $500,000 and two others that are worth $250,000 each. Although their price is close, if hypothetically the two houses that are worth $250,000 are grouped, they will not necessarily have the same stipulated value of the house that is worth $500,000, no matter how the combined unit values ​​result in an equivalent amount. This is because each house is unique and has its own characteristics, that is, they have mutually non-interchangeable (or non-fungible) values.

   In this sense, Blockchain allows objects with non-interchangeable value to be traded by cryptocurrency, maintaining a key aspect: uniqueness. For this, each object will be linked to an immutable link engraved on the Blockchain. These immutable links are called NFT (Non-fungible Token). NFTs are also able to sustain another essential aspect for the art market: the concept of scarcity, responsible for valuing the piece taking into account how many units identical to it exist or not. In addition, NFTs offers a new type of registration for artists, since the immutable links recorded on the Blockchain can contain all the information and technical specifications of the work produced in a "Smart Contract" format.

   In short, the new revolution in the world and in the art market allows works to be sold 100% digitally, forming a new segment: Crypto Art. Each image, video, sound, text or software file, even if it is unique or of limited edition, becomes an NFT registered on the Blockchain. As a result, each NFT will be priced and sold in Cryptocurrency.

Still from NFT video work by American graphic designer Kii Arens based on a real house in California. Bidders will make offers on this NFT, with the winner also receiving the physical property at 221 Dryden Street.

 

   After this process, the NFT has a traceable contract with more credible, safe and innovative copyrights. For example, until the emergence of Crypto Art, an artist would not receive a percentage of the profit corresponding to resales of his work. With Smart Contract, a clause can link a mandatory percentage of transfer to the author of the work if the NFT is resold. Noah David, an expert responsible for the first NFT auction that took place at Christie's, declared that "the potential imposed by NFTs to break with the traditional model of art auctions is immense".

   Still, they are still digital files, so is anyone able to have them? Theoretically yes, in practice, no, because only those who own the NFT own the work. The rightful owner will be insured in the Blockchain registration. 

   It's worth keeping in mind that Crypto Art is highly influenced by video games (in fact, a niche in visual design that has recently gained the deserved post of production with artistic content). In other words, the featured appearance has futuristic features that even refer to NetArt's predictive interventions.

“Gods in Hi-Res”, by Canadian artist Grimes. The work has a futuristic look inspired by games. The NFT was auctioned off for $77,000 (Image: Grimes / Niftygateway)

   Finally, it is in this context of congruence exercised by a technological environment of infinite possibilities associated with a global situation of digital protagonism, that a new era for art and internet takes its place. Crypto Art proposes a reintegration of the avant-garde of the 90s. A reboot. It is up to us, artists, to reflect on our own conservatisms related to the advances of art with technology. Crypto Art establishes itself not only as a trend, but as a movement. It is naive to believe in the illegitimacy of the movement solely based on the fact that this art "does not exist" in real life. After all, if the digital exists it's because we have created it, making it part of our reality. As a result, art  fulfills its catalytic role for new readings of these realities.

 

REFERENCES:

Venda Extraordinária - BBC New Brasil

JPG File Sells For 69 Million - New York Times

NFT Artwork Being Sold With Physical House In California - Dezeen