Update: This article was originally published in the spring of 2022. The crash in value in cryptocurrency and NFT values over the following months has born out many of my doubts about the viability of NFTs in their current form. It will be interesting to see if the NFT market recovers and stabilizes into a more sustainable model.
Why I Bought an NFT
Over the last year or so, I’ve received an increasing number of questions about NFTs from readers of RedDotBlog and from the artists with whom I interact. While some of my readers are deeply involved in the NFT market, minting and selling artwork on the blockchain, most are only vaguely aware there is something out there called an “NFT” and have heard some artists are getting rich creating and selling them. This vague knowledge can leave artists feeling uncomfortable, wondering if they are missing out on a significant opportunity to further their art career and cash in on a new trend in the art world.
I understand this unease because I have felt it myself. I pride myself on keeping up with both the art market and technological advances, so the advent of NFTs seems like something that should be right in my wheelhouse. This being the case, I have to admit I feel just as mystified by the whole business as many of my readers.
For the last several years, I’ve been fending off questions about NFTs with a mystified shrug. “I don’t understand the fuss,” I would say, and “NFTs are interesting, but they have nothing to do with my business.”
However, I’ve come to realize that sticking my head in the sand and resting on an ignorance defense is silly. I try to take a reasoned approach to understanding every aspect of the art market, and it’s time to understand better NFTs and their potential impact on the art world.
I’ve spent the last several weeks diving into NFTs and cryptocurrency, and today I want to share what I’ve found. Spoiler: I remain highly skeptical of the viability of NFTs for most artists, but I now feel I can better articulate my skepticism.
So if you’ve wondered about the NFT market, read on, but you better strap in; this is going to be a wild ride . . .
What is an NFT?
First, we need to understand at a basic level what an NFT is, and from my perspective, this isn’t necessarily an easy concept to grasp. You can think of NFTs as titles of ownership of digitized assets at a basic level. These digital titles get stored on the blockchain.
Okay, that actually might not make it any clearer.
Let’s approach this from a different direction and try to understand it from the perspective of the real-world art market. Imagine that you have created a piece of artwork, a painting, for example, and decide to sell it. You place the artwork in a gallery where a client sees it, falls in love, and decides to purchase it. They pay the gallery for the artwork, the gallery owner writes a receipt, the client takes the artwork home to enjoy it, and the gallery owner sends you a commission check. A sale has occurred! The client has the artwork, you have received payment from the gallery, and the gallery has retained a percentage of the purchase price for acting as the vendor.
A client may have several reasons for being willing to pay hundreds, thousands, or tens of thousands of dollars for the artwork, but the main reasons are that the client is attracted to the imagery in the painting and is excited to own an original work of art. Even though the client could have paid far less to purchase a print of your artwork, the client finds value in owning the original.
Suppose the client decides, in the future, to re-sell the artwork. In that case, the receipt the client received from the gallery could help prove ownership of the painting, but even if the client has lost the receipt, possession of the original work of art will, to an extent, serve as its own proof of ownership.
We can all understand this model because we are accustomed to this process, even if there is some mystery involved in figuring out what art is worth and how a buyer might resell the artwork in the future. At the end of the day, if someone is willing to pay the price, the artwork receives an implicit value, and a sale occurs.
Digital art has made this equation complicated. When a traditional artist creates a work of art, the original works of art are fundamentally unique. While the artist might repaint the same image, the resulting artwork will never be identical to the original. Sculptors who mold and cast their work can reproduce their creations in an almost identical form. However, due to the physical limitations of mold materials, sculptors limit the number of castings they produce.
Digital artists face no such limitations. A digitally created work of art can be recreated and copied precisely, and an infinite number of copies can be created and disseminated with no discernible difference from the original.
The traditional art market has built value around the exclusivity and scarcity of original works of art. While some artists have successfully created value around their work despite the theoretical lack of scarcity of digital artworks, conveying ownership of digital artworks has always presented a conundrum.
Enter the NFT, or non-fungible token. While anyone may copy a digital file, an NFT is a block of code that exists in a publicly accessible ledger (called the blockchain) and is not reproducible due to its complexity. The blockchain ledger records NFT creation and ownership transfers. By associating a digital work of art with an NFT, the owner can essentially sell ownership of their digital creation to a willing buyer. Additionally, NFTs can be set up so that each time they change hands, a portion of the proceeds go to the original creator – a great potential source of ongoing income for artists!
Conceptually, this idea of providing a mechanism to allow digital artists to monetize their creations and create scarcity around their work should open an entirely new market for digital creators, and indeed it has. Not only have digital artists begun selling their work as NFTs, but the market has also gone crazy over them, generating some eye-popping sales.
Before we talk about some of the hysteria in the NFT market, it’s worth noting that NFTs are not limited to visual art or, really, to digital creations. Enterprising individuals create and sell NFTs associated with music, manuscripts, and physical goods.
Anything tangible or digital can be associated with a non-fungible token and sold on the blockchain. It’s important to remember that it’s not the actual items being sold (though the article can also change hands); what is selling is a kind of digital title to the thing in question.
On to the NFT frenzy.
The NFT Market is Crazy
On March 11, 2021, Christie’s auction sold the digital collage “The First 5000 Days” by Beeple (artist Mike Winkelmann) for 69.3 million dollars. Beeple is a well-known, prolific digital artist who has millions of followers on social media and has seen NFTs of his work sell and resell for multiple millions of dollars. Still, the venerable auction house’s sale of “The First 5000 Days” brought new attention to the NFT market from serious art collectors and investors.
This sale also captured the attention of popular culture, bringing the term “NFT” into the common lexicon, even if it did leave the general public scratching its head.
NFT sales had totaled $82.5 million in 2020 but increased more than 200 times in 2021 to $17.7 billion!
That’s a lot of money!
While only a tiny percentage of NFTs sell for multi-million dollars, stories of artists generating tens of thousands of dollars during NFT “drops” pop up online and in news stories with increasing frequency. Online communities have sprung up for enthusiasts to share their excitement, trade tips about new hot creators, and resell NFTs community members have collected.
The Art Market is Getting in on NFTs
Mainstream art galleries are also beginning to take notice of NFT sales, with some offering sales of digital artwork NFTs alongside physical works of more traditional art media.
Galleries focused exclusively on selling NFTs have also sprung up, both in the bricks-and-mortar spaces where they display digital artworks on large screens and online.
So I Bought an NFT
With all of this buzz, I decided it was time to understand the NFT market better, so I decided to research the market and dip my toes into the water by purchasing an NFT to share some first-hand experience with you.
Buying an NFT wasn’t particularly challenging, but it wasn’t straightforward either. The first step was converting some money into ether, one of many cryptocurrencies. Most NFTs use the Ethereum blockchain, and most NFT marketplaces only accept cryptocurrency as payment for an NFT.
I used Coinbase to set up an account to purchase ether, about $100 worth, and then a crypto-wallet to be able to spend the ether to buy the NFT.
I next navigated to OpenSea, the largest marketplace for NFTs, and began scouring the site for an NFT that seemed appealing. With all of the hype around NFTs, I didn’t imagine this would be too hard. I was wrong.
OpenSea offers several ways to view NFTs, including featured collections, search, and categorized exploration. I started with the featured collections, tried a little search, and then ended up on the Explore page. The site classifies NFTs into several categories, including art, collectibles, music, photography, and others. I selected art and landed on a page of images I struggle to call art.
Many of the featured NFTs are, and I don’t mean to sound like a snob here, not great. The art establishment and general public have long been slow to recognize new art forms and movements. I know I’m falling into a well-established trope by questioning the artistic value of NFTs, but you can visit the art page on OpenSea and decide for yourself if I’m being overly critical.
Many of the NFTs on the art page are collections of digitally-created thematic avatars designed to serve as entry into an online community or online game. The best-known of these kinds of NFTs might be the Bored Ape Yacht Club. The creators of the Club have created 10,000 unique ape characters that they have sold to collectors who become members of the Bored Ape Yacht club, which the creators describe as
unique digital collectibles living on the Ethereum blockchain. Your Bored Ape doubles as your Yacht Club membership card and grants access to members-only benefits, the first of which is access to THE BATHROOM, a collaborative graffiti board. Future areas and perks can be unlocked by the community through roadmap activation.
Bored Apes are selling at incredible prices, and the concept is interesting, but I’m not sure that the artistic merit of the Apes is their primary appeal.
The success of the Bored Apes (their current market value is estimated at nearly $1,000,000,000) has led to a host of similar listings. While creative, I don’t find the concept particularly appealing, so I quickly had to learn how to ignore these kinds of collections.
I quickly learned that another category of NFT art is by creators I consider to be more interested in the idea of NFTs than the actual art with which the NFTs are associated. These NFT creators take whatever digital raw material is available to them and mint it into NFTs as quickly as possible, with little regard for any aesthetic or cultural value. I wouldn’t want to disparage anyone’s particular creation by pointing to a specific example here, but again, a quick visit to the art category on OpenSea will illustrate the point.
Finally, after scouring dozens of OpenSea pages, I decided I would simply buy the next NFT I ran across that was within my budget (I gave myself $100 to work with for this article) that didn’t seem to be too much of a gimmick.
This decision led me to happytree#0051 by user HoonyHoney. The image appears to be a digitally created nightscape. I’ll let you decide if it’s incredible art. Great art or not, the image fit my self-imposed criteria, being not too gimmicky and was priced at .001 ether, or about $3.00, well within my budget.
So I began the purchasing process. Having made countless purchases online over the years, I didn’t anticipate any complications with the purchase. I clicked the “Buy Now” button and . . .
I was greeted by a message asking me to sign in to my Coinbase wallet on my phone, and . . .
I was asked to agree to the terms and conditions of the sale, and . . .
I was informed that the network fees were currently high and that I should expect to pay between $44.00-$65.00 in network fees . . .
Wait. What? To complete the purchase on the blockchain, a purchaser has to pay a “gas fee” to the crypto miners to process the transaction. This fee seemed more than a little bit outrageous, but I’ve since seen fees range from $30 to over $600 per transaction.
I thought about scrapping the purchase but decided I couldn’t write this post unless I had indeed experienced a purchase and had become an NFT owner. I completed the transaction and spent $3.50 + what ended up being $40.20 in fees, or $43.25 to buy happytree#0051.
I suppose the fees wouldn’t have felt so ridiculous if I had been purchasing an NFT worth several thousand dollars, but no matter how you look at it, the blockchain-related fees will add up if you are actively trading NFTs.
So I Own an NFT. Now What?
And so, I own my first NFT, which leads to the question, now what? I can hop into my digital wallet whenever I desire and see the NFT listed there, and I can open the JPG file and gaze upon my happy little tree. While I suppose I can undoubtedly draw satisfaction from this ownership, it seems a bit anti-climactic after all the hype I’ve experienced around NFTs.
It seems pretty clear that the interest in NFTs isn’t primarily driven by the excitement of owning a digital artwork but rather by the speculative prospects of seeing an increase in value in the NFT and then reselling. I suspect my $3.50 NFT won’t be doing much appreciating, and here, I believe, is the rub for artists who are trying to decide if they should get in on the NFT craze. I suspect that for most NFT creators, it’s going to be very hard to find buyers and create the energy needed to drive up the value of their NFTs.
Problems I See With NFTs
I see several additional challenges for artists considering entering the NFT market.
Hype is unlikely to match results for individual artists
First, most artists dipping their toes into the NFT market will be, I suspect, disappointed. While some creators and collectives are raking in large sums, the numbers don’t add up for the average artist coming into the NFT marketplace for the first time.
The headlines highlighting artists who are generating eye-popping income from the sales of NFTs are proliferating headlines, but we’re not going to get stories about the thousands of artists who are jumping in to create NFTs and aren’t seeing significant sales. This makes sense, as those headlines wouldn’t be very sexy.
“Extra, extra, read all about it; artist enticed by hype to create NFTs doesn’t sell anything!”
I suspect this headline would represent the experience many artists are having as they begin minting their artwork into NFTs.
I’ve found it difficult to find statistics on NFT sales for the broader market, but taking some sample data from NonFungilble.com, an online reporting service that tracks NFT activity, we can see that on a sample week the week ending May 3, 2022, there were $369M in total sales.
That’s a lot of green!
We see that those purchases were spread out over 98,000 transactions. So the average purchase price was about $4,000. That’s not bad, and if I knew I could generate $4,000 for each NFT I produced, I wouldn’t be writing this article; I would be minting NFTs!
However, those numbers seem to obscure what’s happening in the NFT market. Those sales include primary sales, the sale of an NFT by the original creator, and secondary sales. More importantly, much of the value listed here is generated by what I consider to be hype NFTs – Bored Ape Yacht Club, Moonbirds, Crypto Punks, etc. The top 20 sellers generated $359M worth of sales over 11,479 transactions.
Transactions outside the top 20 sellers generated an average of $210.21 per sale. Not quite as motivating. Even less so if you were to calculate in the top 100 sellers. Beyond those top 100, the average sale is negligible.
And we haven’t even considered all of the NFTs minted but not finding buyers. Despite scouring the internet for statistics, I couldn’t discover how many NFTs are created each day, but if you want to watch NFTs being born in real-time, you can hop onto opensea.io at https://opensea.io/activity?search[eventTypes]=AUCTION_CREATED . While I was watching, during the middle of the day on a Tuesday, hundreds were minted every minute, thousands every hour. Most list for a few dollars, and many, I suspect, will never sell.
The market is sure to cool
While advocates of NFTs are bullish on their future, I’m skeptical that the runup in values we’ve seen over the last few years will continue. NFTs are experiencing a boom that is partially driven by their novelty. The NFT market provides a fun new way to achieve a sense of ownership over intangible digital goods.
The proverbial fear of missing out may also drive it. We’ve all heard the stories about early investors in cryptocurrency and NFTs becoming fabulously wealthy. Current buyers are likely trying to take advantage of early adoption. Investors could continue to see increases in the value of their NFTs as more investors enter the marketplace. Still, there are a finite number of potential NFT buyers in the world, and as we get closer to that number, investment is going to start to slow. Once investors realize appreciation is declining, we could experience a significant decline in the NFT market, with the value of many NFTs crashing. Like any other good, an NFT is only worth what someone is willing to pay for it.
We get a hint of this danger in the tale of the NFT created with Jack Dorsey’s first tweet. In 2021 Sina Estavi, a crypto entrepreneur bought the NFT for $2.9M. A year later, Estavi tried to sell it for $49M, promising to donate half of that to charity. The NFT was offered at auction, but by the time the auction closed, the highest bid for the NFT was 0.09 ETH or about $277 at the current exchange rates.
A lot of money is pouring into the market, and that may continue for the foreseeable future, but if resale prices falter, I anticipate buyers will become more cautious, and sale prices will come back to earth.
The NFT market favors hype
NFTs offer an excellent mechanism for digital and traditional artists to tap into a global audience and sell digital originals or digitized versions of their art. A quick perusal of the top-selling NFT collections will show that classical and contemporary art aesthetics have very little to do with what is selling. Don’t get me wrong, some intriguing artists are generating NFT sales, but are Bored Apes and Moonbirds art? You’ll have to decide that for yourself.
Whatever our opinion of the artistic quality, I found very little imagery that struck me as artistically exciting while exploring OpenSea.io. When I found interesting artwork, it didn’t seem to be garnering bids or generating sales.
Finding buyers/market saturation
Ultimately, it seems advocates for NFTs are promising something that they will have a hard time delivering for NFT creators. The implicit promise appears to be that it’s easy to create NFTs, and artists will find a new source of sales and, potentially, fabulous wealth.
Who doesn’t want easy money? Whenever I see someone promising it, however, I become very skeptical. I see a disconnect between the promise and reality of the NFT market. While the mechanism for transacting the purchase of a digital good and the record of its ownership is novel, the marketplace for selling digital goods is reminiscent of many existing online marketplaces that sell physical artwork. In this regard, selling an NFT is just like selling any other good – you have to have a willing buyer who feels that the value of the good is in line with the price.
As the NFT market launched, there was an imbalance that favored sellers. Excited buyers poured money into the market and chased after a limited number of NFTs. This activity drove the value of those NFTs up, sometimes astronomically, leading to the headlines. The resulting enthusiasm was understandable, but it has shown, it seems to me, that the NFT market is becoming saturated with creators/sellers. Because these sellers can produce digital artwork or other goods much more quickly and at a lower cost than required for physical goods, the number of available NFTs has exploded.
The biggest challenge for a creator new to the NFT marketplace is drawing attention to their work from qualified buyers. Anyone who has tried selling traditional, physical artwork online will understand the challenge.
Underscoring this point is a recent Facebook comment on one of my posts. Under the heading “I think painting is dead,” the commenter wrote
digital & Nft’s are taking the stage. It’s just another medium, without the mess. While buyers of paintings might still exist, but many artists will switch. It takes few hours to generate thousands of generated Nft’s, list them and sit back and relax. And that market is hot(I still couldn’t sell my first- but working on it).
The parenthetical in the last line reflects the experience many fine artists have in the NFT market: They think the market is exciting and intriguing, and they are breathlessly awaiting their first sale.
Time will tell how long they wait.
Finally, we can’t talk about NFTs without discussing the environmental impact of creating and selling them. I’m not a climate expert, so I can’t speak to the exact ecological downside of generating NFTs or their carbon footprint. Still, a quick search online will point you to many articles with scientists decrying the energy usage required to mint NFTs.
Consensus is emerging that NFTs are bad for the climate, but I suspect that the environmental issue is a bit more complicated than some are making it out to be.
There is no doubt that the server farms employed to store and process NFT data are consuming significant amounts of energy from non-renewable sources, but this doesn’t take into account the fact that creating traditional art also consumes energy and resources. Think about the wood harvested to manufacture stretcher bars, the fuel consumed to cultivate and harvest cotton or linen, and the carbon emissions created as supplies make their way to artists’ studios and finished artwork from studios to galleries or clients.
It’s unclear if an artist transitioning from creating physical artwork to digital artwork is increasing or decreasing their environmental impact. As NFTs become more popular and widespread, we can hope that developers will also be able to make them more efficient and environmentally friendly.
Should you Create NFTs?
With all of this in mind, you may be wondering if you should consider getting into the NFT market. If you are interested in exploring the possibility, my advice would be to learn as much as you can about the process and the market before jumping in. Unlike the stories of instant sales and fabulous income, I suspect you will have to work hard to develop a market for your NFTs and cultivate buyers.
The NFT/digital art market is in its infancy, and I think artists will be able to build successful careers on the blockchain. I also think it will be a lot more work to do so than many blockchain advocates are suggesting.
So if you are interested in building an art business around NFTs, by all means, pursue it! I encourage you to do so with your eyes wide open and your expectations tempered.
Xanadu Gallery is not Developing an NFT Strategy at this time
As I’ve examined the NFT marketplace, I’ve decided to take a wait-and-see approach. I won’t rule out the possibility that, at some point, Xanadu might launch a digital gallery and retail NFTs. Still, at the same time, I am very comfortable saying that, for the present, I love the business of selling hand-crafted art to collectors who will enjoy the art in their homes for many years to come.
In other words, NFTs are interesting, but they have nothing to do with my business.
Are You Selling NFTs?
Have you jumped into the NFT market? If so, we would love to hear from you. Please leave a comment below describing your experience.
Have other comments or questions about NFTs, or did you enjoy this post? Leave a comment below.. I look forward to hearing from you!
I follow you as an artist. I think your articles and comments are very valuable
and very inciteful. I’ve been following NFT’s also and for the most part only see stupid cartoons with different expressions and backgrounds. However, I found something different. I am older so I thought what could people find more valuable than a cartoon? I came across vintage baseball cards dating from the late 1880’s to the early 1900’s (I wish I was able to upload a sample to your blog, but don’t think I can),
I think these could be quite the thing. What I’ve be doing is coloring the black and white ones and making them appear as 3-D images. I haven’t minted any because I want to be like the gold rush people, I want to supply them with picks and shovels as tools so they can find the gold, Bob Filderman
It’s a bad idea. Has anyone noticed that when filing your tax return the feds are asking if you engaged in crypto currency? Who knows what the ultimate bottom line will be.
Wouldn’t that be violating the copyright of the baseball cards?
Thank you for this, Jason!
Great article! We have an actual art gallery in Maryland(Hopkins Original Art) and we have an NFT Lounge in it. We sell NFTs and tangible art. Most still do not know about NFTs so I have to explain, which isnt that simple! I may give them this article! Anyway, we have sold Grafskulz and Davidigis from Open Sea. In order to bridge the learning gap, our artist decided to include the canvas original with the NFT. We seem to be educating more than selling right now but maybe that will pay off later?
If the buyer has the canvas with the NFT, what happens to the person who buys the canvas from him but doesn’t know about the NFT? And the next person. Eventually one person owns the NFT and another the canvas – is that a problem? If not, how does the NFT owner benefit?
Maybe within the code itself it could be written that any sale is to include both? At least then, the buyer and the seller, ” down the road,” will know that something is missing. Just a thought.
I was recently invited to apply to be chosen as an artist for an NFT to raise $ for Ukraine. I have been giving 100% of the net proceeds of any sunflower reproduction on my site (sent to World Central Kitchen) so why not? However I was not chosen. I was not at all surprised since my work is in no way political or especially cool either…So… I was prepared for all proceeds to go to charity so I am sorry it didn’t go further as a learning experience. My general lack of hipness is now confirmed.
Thanks for this article. I am very puzzled by NFTs and you have given me a grasp of what they are.
Thank you for taking the time to research and share this information. After reading I still have the question, “Why would someone buy an NFT?” I’m assuming it is to reproduce digital images? But, then how does the original artist make future sales if someone else owns the NFT and is reproducing images? You own “Happy Tree”. What are your rights and what can you do with your NFT other than selling it in the future? As you can see, still confused at what makes value and how does original artist reap reward – just multiple hopeful sales? If multiple images sold if NFT, doesn’t that dilute value?
That’s my question too, what can you do with it? Unless you download and print and frame it and put it on the wall …
You could download it and put it in a digital photo frame or as a screen saver on your TV
That’s about the best analysis of the NFT market I’ve seen. I spent some time checking it out too, but didn’t bother to get as far as you did (actually buying an NFT), because when I saw, what in my opinion was the tidal wave of dreck being offered there, I decided from my point of view it was just a good way for anyone good at luring sheep over a cliff to make a “killing”. If you are an artist with half a million followers, then you can make some more quick bucks, getting them ( I won’t say “conning them” – but my personal opinion is: it’s close to that) to buy from you. When the tulip craze was going on in Holland, if you tried to talk against it, people branded you an absolute fool, but really it was the people that, at one point, were paying more for one tulip bulb that for an entire 5 story brownstone house in Amsterdam that were obviously the fools – of course if you, having bought the tulip bulb for merely the price a two good horses, were the one that sold it to that fool for more than the price of a house, you came out thinking it wasn’t so bad after all.
There is good are being minted as NFT’s but it’s probably less that 1/1000 of 1%. As a serious artist, unless you are already famous or have a huge online following (that doesn’t mean 10,000 followers, that means more that 1 million followers) you most likely won’t make any money at all – less than you currently make now, by whatever means you presently sell you art currently
Thank you for your article, being clearly more in depth than my experience – but
I think we have pretty much the same conclusions about NFT’s
Excellent article. I have seen some NFT’s and wasn’t impressed. I felt almost sad to think people are creating these images and thinking they will make a quick crypto. I feel this fad has cheapened art. Quantity not quality.
Who are the buyers of this art? Age range,, location? Curious to who has that much $$.
I’m glad your not plunging in to this Jason. Like my mama used to say, When in doubt, don’t!
I, too, have tried to understand it. What I really don’t understand is why would someone consider it an art purchase if you can’t hang it on a wall and enjoy it every time you walk by.
Thank you for such great research Jason. It has confirmed my doubts that I should get into this market. At least not until I’m a bit (lot) more famous than I am now, and can be in that top 100.
Thank you so much for sacrificing your money and time to investigate this and share your findings with us.
This article was very informative and helped me better understand the world of NFTs.
Just a great article! I needed your real-life example to better understand the process. NFT’s sound like hype and trendy stuff. But these days you never know what it might lead to.
THANK YOU for an explanation that actually makes sense! Just yesterday, someone was trying to convince me to make my mountain paintings in NFT’s. It just doesn’t seem worth the effort after reading your post, so thanks for saving me the stress!
I saw an ad on Facebook several months ago inviting artists to participate in some show/sale involving NFT’s. The sponsors were based in NYC, of course. When I looked at the NFT’s that were being created and sold at the time all I saw was what looked like cartoon characters on LSD, and it seemed to me a collector interested in that wouldn’t be interested in my nature paintings. Long story short, I never got involved.
THANK YOU Jason…I appreciate allll the research you have done for me/us.
I too will Wait and See.
Thank you Jason Horejs, this was good and informative article.
As an artist that have worked and created photographic digital collages images, for many years, I was very curious about the NFTs but have not got into it yet.
Your article convinced me to hold on and wait.
I have read about the elements and process that involves the searching of the areas that one can buy the NFTs in and they definitely do not prefer or recommend fine Art. So your experience was right on!!!!!!
I am personally very bothered, with the copy right factor of original art that seams to be handled in a strange way that make it easy to be ignored, I think!!!
Thank you for an excellent article, Jason. I finally understand what an NFT is (I think, maybe…) but all the hype and crazy expectations brought Holland and tulip bulbs immediately to mind. Good luck to all who venture into that market but I’ll stick with my brushes and paints!
Yes, the only way to learn is to plunge in and do the research. Thank you for taking the time to do that. I will forward this article to a friend who is presently developing some digital art. I still prefer the old fashioned way with a sojourn into abstraction… Have you investigated the cryptocurrancy market too. I have had some unhappy dealings with that venue. Wish there were more honest people like you in the world.. Thanks again Jason.
Your looking in the wrong place with the wrong searches to find the art nfts. There are truly amazing nfts on Opensea and on other platforms— look on nifty gateway or super rare.
Look at my collection on Opensea! NFTs are just anther layer of creative expression.
There are also cheaper and more environmentally friendly nfts using polygon or solans instead of ethereum
The work is nice, but I noticed there have been no sales yet. How long have you been on Opensea, and how are you promoting the work?
It’s been there for a week. Yes, this is the problem, my work is floating around with a million other NFTs on Opensea, which is not a curated platform. It’s the Wild West out there— lots of shilling on social media.
Great article. I also saw that Damien Hirst is selling 10,000 works of art – all looking very very similar, but with varying titles. It’s all a game. He made this game even more interesting by having the buyer decide later if they want the original on paper, or the NFT. The option not chosen will subsequently be burned! The NFT ecosystem for this is called Palm and apparently it is more artist-focused with lower gas prizes and more eco-friendly (which would be a very good thing).
Thank you so very much for going through the trouble of researching this subject. I kept reading about it and to me it felt like reading about Martians. Hence my asking myself, “what’s that got to do with me”, a crafter of paintings as traditional as Da Vinci and Michelangelo (but as good). Still, “the times they are a’changing'”. However, unless traditional painting dies completely, I am not planning to go NFT any time soon – or ever.
Thank you Jason for a particularly helpful post. So like you to have a go and buy one, all in the name of research. That’s why we so appreciate you, your clear explanation, willingness and experience. It was just as I suspected, so I am grateful for your confirmation of my gut feeling about this.
My favorite title on your blog so far. Thank you for taking the time to do this and effectively explaining what I already suspected was a hype-based market. NFTs are, unfortunately, another way for people to try to make a quick buck at the expense of the creative process. Pride of ownership is one of the reasons we buy but NFTs, at least to me, have an inherent “who cares?” quality to them that prevents me from taking this seriously. I have no plans to participate in them and I agree with your suggestions that this “art” isn’t really art at all. Looks more like amateurish illustration to me. Most alarming is the environmental impact that this will have and unfortunately this is another dangerous aspect of the ‘wait and see’ nature of the NFT market.
Thank you for commenting on this Jason. I have also been studying the NFT market with interest because I have not found galleries that accept digital creations and thought the NFT market would be a good outlet. However, I, too was disturbed by the digitally-created thematic avatars. That is not the focus of my artwork. I was a landscape oil painter who switched to painting digital landscapes through the Adobe Fresco App and then add a little motion which displays well on large digital wall frames like Nimbus. I have not found a gallery that will accept my artwork because all they display are traditional paintings. My art is “hand crafted” landscapes and not those silly avatars. However, I don’t think galleries have figured out how to control the potential of duplication with a digital piece of artwork which is why there is not an acceptance by galleries for digital artwork creations. If you learn about galleries that have overcome this issue, please let me know.
THANK YOU for doing what you did! The analysis was much appreciated, especially in breaking down how much “money” is involved with how many NFTs. Like anything else new, it’s a pyramid with a lot of base supporting only a few winners.
One of my former students who has done well in the arts-entertainment field in Europe has gone into NFTs. A while ago, he suggested some of my digitals would translate well and offered to assist me if I wanted to do this.
A couple of my artist friends in Europe do NFTs as a side issue. They don’t say much which is typical. One develops new NFTs from previous ones so the same image is out there (like a print edition).
Non Fungible means each single image is unique. I could take a screenshot of it but it would not be a copy except for the image. You confirmed that what was being traded was the blockchain (or in museum language) “provenance” as I see it.
Thank you so much for taking the time to research NFTs! I was approached a few months ago by two people wanting to use my art for NFTs. Thanks to your blog I now understand what they are and am so glad I turned them down! They would have made money on the digital art and the processing fees. They were trying to convince me that the value of my original art would increase considerably and that would be how I would make money on the deal. I was also told that the person who owned the digital art would be able to change it! They showed me an example of an eyeball being added to artwork of a spaceship. They also used the example of the “Bored Apes” and how valuable it had become. Call me a snob but I don’t want anything added to my art. I’ve worked too hard to accomplish what I have at this point in my life. Until I read your blog, I had a nagging feeling that I may have made a mistake turning them down. Thanks to you I don’t feel that way anymore.
I enjoyed reading your article on NFTs. However, I think the art community might be missing a really important use for them. Since the NFT is a unique blockchain that cannot be duplicated and is on a ledger open for all to see, this opens using the NFT as the receipt that proves ownership of an original work. The artist can tie the unique NFT to a specific original artwork and transfer that to the new owner. Each owner, in turn, transfers that unique NFT to the next person who buys the work to give a world-wide notice of ownership. Should an artwork reach a high monetary value, the NFT could be split, sold in a similar manner as stock in a company, thereby establishing joint ownership of a work. This also identifies the work associated with it as authentic. It prevents people from claiming ownership who do not possess the NFT. This kind of identity of ownership would make trafficking illegally obtained art nearly impossible. If NFTs had existed mid-20th century, the ownership of paintings stolen by the Nazi regime would have been incontestable, such as in the case of the Adele Bloch-Bauer portrait by Klimt. Recently, I came across a new coin that, if my understanding is correct, is specifically designed to help artists do this: Ravencoin. I still need to do more research on this one….
A good potential use case for NFTs, and this is one approach I’ve seen mentioned online. I wonder how dedicated art buyers would be to following through with this, however. Most clients purchase a work of art and hold onto it for decades, or even generations in some cases. Will anyone remember that there was an NFT associated with the artwork thirty years after the fact?
Good point Jason. We see so many images online now that it’s hard to remember what we’ve seen. When we live with an artwork in our home for generations, it forms an indelible image in our minds over time. We fall in love with it (as you said your clients do).
I would be amiss if I were to think that my work will ever go down in art history or be sought by investors. I have friends in real life who fit that category – high investment value during their long careers. But.. just because they are making really great money on their art sales, doesn’t mean I can get my work to be as popular as theirs in a short time – especially in a crowded market place.
Even if I were to enter the NFT market, I sincerely doubt anyone would be interested in tracking my work overtime and I’m pretty sure it wouldn’t increase in value on the resale of the NFT. This may work for artists who are insanely popular or already well collected, or those who have a clever idea… but I don’t fit into any of those categories. I’m happy to sell originals and reproductions (that are physical) just like I have been for a profit. That model has worked well for me and others. Am I ever going to sell my work for $20K-$40K… nope. The get-rich-quick model won’t work for most of us. That’s why I think you’re right that the NFT model isn’t going to be worth the time for most artists.
Never heard of this. Had to look up NFT to learn that it means “Non-Fungible Token”. That didn’t help.
I skimmed your article and thought, “Wow, Jason, way to take one for the team!” Thank you for your research. When/if this esoteric subject comes up in conversation somewhere in the future, I won’t be quite as blankly stupid about it.
My take is that once again, the emperor has no clothes. This comes from someone who drives a stick shift and doesn’t own a microwave, so what else would you expect me to say? 😎
Jason, your article was very insightful. I’ve been curious about the NFT market but not enough to put any energy into it. When I looked through the art on OpenSea, I felt as if I was thumbing through a stack of children’s comics. None I found interesting or of any art value. However, there is always an audience for everything. I think at this time, I will stick with real paint.
I find the whole concept of NFT’s silly. In the architectural and design world we have sold digital products for well over twenty years. I am paid to design something and upon completion the client pays for the design, drawings or concepts. However, I own the copyright to them for numerous legal reasons, such as a liability of the design or engineering. Beyond this, I have been using digital means to render using tools specifically for it. This can include interiors of worship spaces or even the furnishings within it. It is still the same concept. From my artwork, I or someone else will develop drawings necessary to construct what I have drawn. 3DsMax is one of the tools I use. It is the same tool that many film companies use to design the CGS that you see in movies. They do not use NFT for movie rights. Sorry to be so negative but the concept of NFT, cryptocurrency and block chain is being developed by the kids in moms basement to extend the number of hands out.
Wow! What a tangled web we weave! Thank-you for all your research, monies, and lost time to inform us, your audience about NFT’s.
I’m going to still go the old fashioned way; produce my art and enter in local shows.
I appreciate all of your effort to keep us informed.
Thanks Jason, this was a fun read, informative and helpful, and I laughed out loud at times! I thought it was only at minting that gas money was due, ridiculous. I still don’t understand why anyone would buy into this, as it is I struggle to organize all of my digital media. Enjoy your happy tree#005 and do keep us up to date on its appreciation 😁
I enjoyed this post because it gave me a little more insight into trying to figure out just what the heck an NFT is and what it means to own one. I have illustrated books digitally, but the idea of leaving real materials to go back to working on my computer is not that appealing to me. I have a good friend who has illustrated numerous books digitally and she has just entered the market. Her art is wonderful and I will be surprised if she does not succeed. BTW, Refik Anadol’s ‘Living Architecture: Casa Batlló’ NFT realized $1.38 million at last night’s auction at Christie’s. I have to admit–it is pretty fabulous, even though I have no real grasp of what it is and how it is generated. You can see a replica at Rockefeller Center here: https://www.youtube.com/watch?v=f8p6V2eFcFs
Thanks Jason for telling us your story about jumping into the NFT world. Very informative. I have listened to podcasts on YouTube and keep telling myself to start the process. I love creating some of my abstract art as digital fine art paintings. But I just want to sell them as prints at this point. I too felt most of the “art” on these sites was using that term so loosely that I was ashamed to be called an artist. Maybe if someone (like you) started an NFT gallery site that was just digital fine art and had a juried process into that site for the art, I might give it a try.
There are exhibitions that are now accepting digital art submissions along with all the other mediums. I have started to submit my digital paintings to one and got it accepted. Art Fluent, Within exhibition juried in my “Seeking Shelter in My Safe Circle”. They had 575 submissions from 8 countries and choose 87 pieces. Mine was one of them. This is the way I am going. Some of the national exhibitions I have entered have listed digital art in their prospective and I think it is going to get more popular as time goes along. I think galleries will eventually have to include them in their options to clients.
Another thing that bothers me is cryptocurrency and how you exchange it for cash I can use to buy groceries. It seems all you can do with it is leave it in your wallet and no one tells you what you can do with after it is in your wallet. And its value goes up and down. I have enough to do with keeping up my budgets, checking and saving accounts for not only my personal but my art business without adding another form of accounts of money that I don’t understand at all.
Bryan, that’s pure genius. Plus it made me lmao.
…to nft or not to nft, that is the question.
Thankyou for the research. Your article and the comments attached to it gave me a sense of the ‘brave new world’ we live in more than any sci-fi book or movie that I know. It also conjured a bunch of questions about this nft market that will leave me pondering not just the art world but mankind in general.
Very good article Jason. Thank you!
It cleared up alot of questions I had.
I have a couple of questions though.
I am curious about Copyright. Does it say what you are allowed to do with your JPG file NFT you purchased? Are you allowed to download it onto your computer or only view it in your wallet?
If you’re allowed to download it onto your computer did OpenSea say what you are allowed to do with it?
Another article said you are only buying the metadata and not the physical file. So I think some of us may still be wondering why would someone pay that much money (in some NFT cases) and only own metadata? If they don’t own the actual file? Hence the artist doesn’t seem to be transferring copyright to the NFT purchaser. In which case what happens if the purchaser makes his/her own NFT from the NFT he purchased from you and sold it, for more?
Hi Jason, Thanks for taking the time to do the research, buying an NFT and reporting back to us. Your writing has really got me thinking pretty deeply/carefully about this – although I wasn’t interested in minting NFTs anyway. After reading this blog, I am sure I’m not interested.
While reading, I remembered what happened to the limited print market in the late 1990s/early2000s. There were several big print companies. The technology of giclee printing was on the horizon, but most of the print companies were using a 6 color offset process for creating prints. They carried well-known artists. The problem arose with the idea that print purchasers started buying multiple copies of limited edition prints so they could “cash in” later in resales. So businesses like Greenwich Workshop started printing thousands of an artist’s latest painting and those prints sold for the purpose of investment.
As soon as it became apparent that reproductions were not going to increase in price over time, and worse, were ubiquitous and hard to resell at all, the market essential died over the course of a couple of years. At the same time, Mike Brown – the engineer behind the new inks and giclee process for artists started a company where artists could have their own prints made on paper or canvas – a few at a time because they were digitally stored. The inks would last for 75 years without noticeable fading. I was one of those artists who worked with Mike Brown. When artists were able to afford entering the print market without the big company gate-keepers, that was a game changer.
I see a parallel in the NFT market where people are buying for the purpose to resell at a profit. You gave an example of how that fell through for a big investor.
Yeah but… then I’d hear artists at outdoors shows saying that their originals weren’t selling, so they thought they’d get some giclee prints made that they could sell for less – only problem was that there was a reason their originals weren’t selling and it wasn’t just the price. No one was interested in buying. Artists who sold a lot of prints at that shows would advise: Have reproductions made when you can’t keep up with the sales of your originals…. Sage advice to be sure.
So, I have been “painting” digitally on my IPad Pro and have come up with some images that people on social media seem to love. But I’m not interested in NFTs. One thing I’ve considered is having them made into giclee prints on canvas and stretched on gallery wrap bars. Then I’d have a physical artwork to sell. Sure, if I have more than one copy printed, it’s more like an edition of prints, but it is my original creation. I just saved a lot on paint.
I have the ability to sell Print on Demand from my website as well – and that would be another way to sell my digital creations in physical form.
At the end of the day, I’d rather have my buyers own something they can enjoy in their homes or offices without being online. I also intend on creating paintings with real media on a real substrate. I enjoy that process. If I were to get involved with NFTs, it would amount to more time online, less time in the studio, getting into the zone with my music playing.. which is the reason for my creating art. I am in love with what I paint and enjoy the process deeply. Selling the work comes well after the creation.
Photographers have their images printed by professional print shops on real media. Why can’t digital artists do that and sell IRL to people who buy for the love of the image, not gambling that it’ll be worth more on the secondary market?
Didn’t edit – not enough time…
I did not know what NFT was so I was very interested in the article. Thank you. Your bravery to tackle new fads in the art world and pass on the info is fabulous.
I am a solid fan of yours and the Gallery.
I will stagger back to my rocker and continue to work with my hands. I ride the roller Coster of fine art and craft.
And I love it.
I think you need to do more research on this excellent analysis on the true environmental impact of these which everyone seems to be ignoring. It’s not just the NFT’s impact, it’s the impact of the crypto, which is staggering. You could probably produce many hundreds of physical pieces for the impact of one crypto transaction. But we do seem be be determined to drive ourselves off a cliff. The only people who will benefit off this fad are people who can generate a ton of hype, do some quick editing of generic characters in some random software, and profit. It’s no different than buying a custom piece of clothing in Roblox, and the pixels have as much inherent worth.
Something that isn’t widely known is that artists with huge numbers of followers on Instagram were mainly able to reach such a big audience due to the algorithms that were used just after it was established. All of that has changed, and it seems almost impossible to create an audience there big enough to help generate regular art sales, and that includes NFT’s. I think the biggest change occurred when Facebook bought it, but I’m not certain about that. Those artists that achieved a large audience early have had a major advantage, but they still need to create new content on a regular basis to maintain their audience.
I think someone already pointed this out, but OpenSea is not a good place to see the best NFT artwork. Some great work may be there, but it’s likely buried under a lot of garbage. It’s best to seek out currated NFT sites. Also, digital art can include animation, and for those works converting them into NFT’s probably makes a lot of sense.
Personally, I create both traditional and digital imagery and often integrate the two, but my ‘all’ digital pieces can take several months to create, just like my acrylic on canvas works. Ultimately, it’s not about the medium and the tools, but what I make with them that matters.
I paint. Now and then one of my paintings sells. I STILL don’t clearly understand the idea of “owning” non-tangible art. Your article is generally helpful, and it convinces me that I don’t care to participate in the NFT trend. I’m happy to see my customers using my works to bring joy into their homes and lives. Thank you, again, for an informative, educational piece about another art sales mystery.
Great article following the rabbit all the way down the rabbit hole. Great similar experience and questions that got from the inside to the outside of me through your deliberate articulate path.
One value I do see for your business and mine (sculpture and painting) is the minting of the original artwork and any reproductions of those in a physical form. Giving the authenticity of the Blockchain(NFT) a back up the value of the artwork. With the digital age creating and proliferating the problem of hacks and copies of physical artworks. That’s where it seems this digital technology can solve one of its own problems of fraud and authenticating.
As an artist I have been researching this topic, still undecided about whether or not I want to join in. Climate is a big issue for me so I would avoid Etherium. There are other currencies like Solana and marketplaces that use more sustainable technologies. Sergio Gomez who has shared a lot of detail about his journey into NFTs. Another aspect is marketing your NFTs after you have created them. Twitter seems to be the place this happens, so you would need to become active there
Great article! Thank you! I did my own research on NFT for a while and was not convinced about all the hoopla around it. You clarified a lot for me.
Hi Jason, I have been minting (and buying) NFT’s. When I first got started, it was also on the Ethereum chain, but the gas fees became too high to be feasible. So I started looking into Solana and Tezos, and have minted some there too. Ethereum still seems to be the best platform for art that sells for the best prices, but Opensea is just that… an open sea. It’s like trying to find a certain fish in that huge ocean if you don’t know exactly what you’re looking for. So I hate Opensea. I love Async.art, though, and that’s where I’ve minted a few on Eth (https://async.art/u/wildozark/collection).
Tezos using Objkt.com is a great place to wet your feet minting and selling. It’s inexpensive and there’s a range of selling prices from very low to high.
Admittedly, unless you just like to look at your jpgs on your phone in their respective wallets, there’s not a whole lot else to do with them once you’ve bought any. If you’re on Twitter, it’s fun to swap out profile pics, if you’re into that. But I’m not. I just look at them in my wallet from time to time, lol.
I’m beginning to see more artists doing well with ‘real’ art. But it’s hard to get sales if you’re not going to market your NFT’s. And if you’re not networking with the other buyers and sellers, it’s hard to gain any traction.
On a closing note, the fees for transacting on Ethereum are much lower now. Ethereum is moving toward a more environmentally friendly way of business called ‘proof of stake’, as opposed to ‘proof of work’. Maybe that has kicked in, because I had been told once that happened, the value of that coin may go down, and the transaction fees would also go down. I had held off on listing one of my minted pieces at Async because it was astronomical a month or two ago. Today it was $14 to list it for sale. I’ve sold a couple of my others on that platform, but not for the exciting prices people are getting all excited about. But for a derivative of my physical work, to make a few hundred on one jpg was pretty exciting. That’s more than physical prints bring, but less than a physical original might. And it was only a 1/1 jpg, not editions where multiple sales can be had from it. However, if any ever sell on secondary market to other buyers, I’ll get a percentage of that sale.
Thank you for your deep dive. I have been to a “launch” and it went poorly in spite of the hype. I think the premise of it is nice for digital art but there in lies one of the problems. I worked as a digital painter in the 1990s and applied the same time and attention to the aesthetic and Message as I do to my analog works. I would print them on watercolor paper, canvas and tyvek but still wanted more texture. I found so many attempts at digital art were awful. Interesting to hear and see it is still that way today. I appreciate the confidence I got from your article that a wait and see policy is best.
Jason, your article was so in depth and I thank you. I tried checking out NFTs two years ago and after seeing some of the art, was left scratching my head. Trying to wrap my head around crypto currency was bad enough, but I like to keep up with the new. What I saw at first was the “smart” home with framed screens in every room showing off purchased NFTs from artists they collected. They might buy the original art as a NFT with a certificate of authenticity, , and perhaps, with the stipulation that the artist retained copyright to create a small set amount of numbered paper prints at a lower price point. After viewing what was selling and seeing the art, I felt that my work just didn’t fit, and I looked at crypto currency as invisible money for invisible artwork in that each could disappear with a glitch somewhere in the space/time continuum. I knew of another well known collage artist who jumped in, but have heard nothing on how it’s worked out. I look at this as another fad right now, and remember MySpace, then Facebook and early Etsy with trying to sell on our own. If you didn’t have a following to follow you, or few friends to share, and with the millions vying for a space to be seen, (worldwide), one would be very lucky, lottery lucky, to make a sale, unless you already were known. I think we’ve seen what’s become of the music industry, artists, musicians who used recording studios, made records, then cds, and so much we grew up with has disappeared. Yes, new work has appeared, but far less now with few radio stations that would play new artists. It’s the same with other arts, and now we have Artificial Intelligence creating art for us whether it is visual art, literature, poetry, music or a thesis paper. CBS Sunday Morning did a piece, if anyone has not seen it, and this is just one they produced. (You may find more on the app.) I wonder how copyright figures in. https://youtu.be/s11k0yAA8ZQ (skip ad). Thanks again for researching this important subject for other artists. It is much appreciated.