by L. Kent Wolgamott via the Lincoln Journal Star
Last year, “Everydays — The First 5000 Days,” digital artwork by Mike Winkelmann, also known as Beeple, sold for $69.3 million, the third highest auction price ever for a living artist.
What was sold wasn’t a video, photograph or series of images; it was an NFT, the hottest new product in the art world and a rapidly growing form that has moved into music, gaming, film and sports.
Total NFT sales are estimated to have exceeded $2 billion in the first quarter of 2021, a dramatic jump from the $250 million in sales in 2020.
For most not on the cutting edge of the digital art and cryptocurrency worlds, the rise of the NFT has been a baffling phenomenon that raises all kinds of questions — what is an NFT? How are they purchased? Exactly what is being purchased, and why?
To answer those questions and more, video artist Michael Burton and Kiechel Fine Arts have created an exhibition of NFTs and will hold a panel discussion about them later this month.
“We’re trying to break it down for the art consumer who doesn’t spend every day trying to figure out what an NFT is,” said gallery owner Buck Kiechel.
Let’s start with the name: NFT is an acronym for non-fungible token.
And what exactly is a non-fungible token? They are digital assets that represent real-world objects like art, music, in-game items and videos that are bought and sold online, usually using cryptocurrency.
How does that work? Burton’s exhibition provides an illustration.
Burton has “minted” eight NFTs of his Nebraska-inspired animation, all on view on video screens on the gallery’s third floor, along with a large, room-filling video projection of the combined NFTs and other animation that isn’t for sale.
Those NFTs can be purchased for $350 each by, first, creating a digital wallet and purchasing cryptocurrency, then opening an account at OpenSea.io, a peer-to-peer platform that offers “rare digital items and collectibles.”
View Michael’s exhibition online at https://kiechelart.com/exhibition/michael-burton-floor-of-the-sky/ and his NFTs are currently available on opensea.com.
From that account, you can browse, then purchase the NFTs.
Exactly what are you buying?
“You’re actually sold the rights to the work,” Burton said. “It’s not the intellectual property but close to it.”
That creates “digital scarcity,” making the NFT a one-of-a-kind asset. That, then lets a market develop for the work that can create the massive sales, like those for Beeple NFTs.
“If you develop the market for it, NFTs provide the opportunity to buy, sell and trade,” Burton said. “That happens on a couple levels, there’s the ‘volume’ level, like Cryptopunks, which makes these unique characters. They’re the equivalent of what Garbage Pail Kids were. They’re constantly buying them and trading them. Then there’s the ‘artist’ level.”
Artists like Burton sell a single NFT. That can put the asset on the market via its purchaser. But the artist will benefit from any resale of their NFT.
“The advantage for the artist is if the consumer buys it and then sells it in the market, the minter will receive 15 to 20% of the sale,” Kiechel said. “On the secondary market, in the auction market, artists don’t get anything from the resale of their work. So that could be big for the artists.”
The NFT also provides provenance, that is the record of ownership of the work, and security for the buyer and the artist.
“What’s going to stop someone from copying it and minting it themselves?” Burton asked. “If that ever happened, if I’m that big of a deal and somebody’s trying to sell my stuff fraudulently, there’s a record in the blockchain to say I already minted it. That will end the (fraudulent) sale before it can even happen.”
Not that a copy is likely. Most NFTs are encrypted with software similar to that used to protect cryptocurrency.
Purchasers, of course, will get a USB copy of the NFT or, in the case of sales through the gallery, can get a monitor/video player that can be mounted on the wall to show the NFT in their homes or offices.
For Burton, an assistant professor in the University of Nebraska-Lincoln College of Education and Human Sciences and director of the Robert Hillestad Textiles Gallery, NFT’s represent an opportunity to expand the market for his work by offering it to collectors who are already familiar and comfortable with video art.
“The NFT thing is another way to get your video work out to the public,” Burton said. “I’ve been a part of that (video art) for a long time. … The trick is finding people who are interested in owning the video and showing it in their home. With NFT’s, you don’t have to explain video art the same way you usually do.”
Burton’s show is the region’s first NFT exhibition and one of the first such gallery shows in the country.
For Kiechel, the major goal for the exhibition is education, creating understanding of NFTs and how they work for local art connoisseurs and collectors.
To that end, Kiechel and Burton are putting together an open forum to talk about the emerging form that will include cryptocurrency and NFT market experts and creatives like New York video artist Sean Capone, who will join the discussion via Zoom. The 5 p.m. Sept. 22 panel will be held in the gallery and will be available online as well.
“I don’t know what the future (of NFTs) is going to be, but it’s emerging on the scene now,” Kiechel said. “We’re trying to kind of push the envelope, if you will by doing the show and trying to explain what NFTs are and how they work. This is the first generation of something we want to try to grow and make even cooler.”