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NFT art: what is it, how it works and what it means for the creative industry

• 11 min read
• Art & illustration
• Web & digital design

If you haven’t yet heard of NFT’s or NFT art, I suggest taking a look at your wifi connection. In the last 4-5 months, NFT talk has literally broken the internet. From platforms like TikTok and Twitter to CNN News, the trending topic has left millions wondering, what is it and how can it work for me?

Its recent rise in popularity has promised to revolutionize the creative industry. As a graphic designer and artist, I’m here to ask, “What’s in it for me?” Let’s begin with a definition.

What is NFT art? —

An NFT is a digital asset that exists completely in the digital universe—you can’t touch it, but you can own it. An NFT can be any type of digital file: an artwork, an article, music or even a meme such as “Disaster Girl”, the original photo of which sold for $500k earlier this year.

NFT stands for ‘Non Fungible Token’, but what does that mean? Well, it helps to first understand what a ‘Fungible Token’ is. If we think of it in terms of money: a 100 dollar bill can be swapped for five 20 dollar bills and still hold the same value, which means a 100 dollar bill is a fungible token.

If this 100 dollar bill is signed by Banksy, it becomes a totally unique product. Its value is then much harder to determine, as it’s no longer simply worth five 20 dollar bills. This means a Non Fungible Token cannot be swapped for any equivalent value. It also means that, like any investment, its value can increase or decrease in the future depending on the circumstances.

What we’re particularly interested in is: how will this new, digital means of selling art affect creators and the creative industry?

What do NFTs mean for creators? —

1. ownership of digital art.

Prior to the existence of Cryptocurrency, we never really got to own something that was completely digital. We passed around videos and motion graphics, repurposing and reposting them, but there wasn’t this current opportunity to automatically assume complete, concrete ownership over a digital file or artwork. The rise of NFT’s changes this, allowing creators the authority to rent digital artworks out, to sell them or display them how they wish.

In order to sell them, designers need to get some kind of ‘legal’ ownership of their work. So, after NFT art is created, it’s ‘minted’ or tokenized on the cryptocurrency service, Blockchain . The Blockchain is a digital transaction system that records information in a way that makes it very difficult to hack or scam, which means it’s extremely useful for tracking copyright ownership and maintaining records of creation. Theoretically, any digital masterpiece you create and mint will lead solely to you.

Ultimately, this process should allow digital artists to gain formal recognition for their work, similarly to how a painter like Gustav Klimt is credited with his infamous painting, The Kiss. The issue surrounding this very new concept is that although Blockchain does have contracts in place to support the legalities of minting and copyrighting cryptoart, none of these have yet been tried or tested in court.

Artists have already come forward with the news that they have had their work fraudulently minted and sold by scammers.  But without relevant protection by the law or any preexisting legislation on this topic, it remains speculative as to what these artists will be able to do about this.

2. A novel way to generate income

NFT art is a totally new way of categorizing digital artworks that enables designers to monetize their work. It’s supposed to be a quicker process and a more accessible way for designers to produce work and reap the rewards for their creativity. There’s no chasing clients for payment, there’s no preparing files for print and there’s no waiting to hear feedback or changing and editing your work to suit a client’s needs.

Some NFT art comes with royalties to the artist, meaning every time the artwork is sold on, the artist can receive 8-10% of all future sales. This depends upon which platform the artist is using; Zora , for instance, is an NFT platform with the “Creative Share” option, meaning users can buy and trade artworks immediately.

NFTs can’t stand alone

Another thing that’s affecting the design industry hugely by the outbreak of NFTs is value. How do you value a physical artwork in comparison to a virtual work of art. Also the value of NFT’s and CryptoArt is solely based on the value of Cryptocurrency. Because NFTs are sold on the basis of Ethereum, and that’s translated into monetary value, for example an NFT sells for 2 Ethereum, which is translated to us as about $2,255 dollars. But if the value of Ethereum were to drop, then so does the value of the artwork: its value is continually dependant upon the cryptocoin.

3. A global reach

Previously, the exclusive, illustrious world of art collecting and selling has been something that’s generally happened in physical spaces concerning physical artworks. Designers and artists made money from IRL events like exhibitions and markets until recent world events meant that many of these avenues were stopped. The rise of NFT trading means that art collecting has been able to move online, opening it up to many artists, on a global scale, who may not have previously had the chance to sell their work to buyers.

Similarly, for many graphic designers it can be really difficult to hold down a steady means of income without doing odd jobs or unrelated work. Stability is a slow bloomer and can be found in loyal clients or through a consistent, timely turnover of projects. But, if you’re not already well-established it can be tricky to find your feet in this competitive industry. So, the immediacy in which an NFT can generate income could, theoretically, open a tidal wave of opportunity for a huge number of creatives, especially those who are less privileged.

Like social media, NFT platforms grant designers immediate access to global audiences. And, often, having a pre-existing online following will help artists gain exposure in the NFT market. The tricky part for designers is working out how to convert their audiences into buyers. Like any other brand, you must find your audience and learn how to establish an emotional connection with them. This means that you’ll need to investigate brand strategies to find what works for you. If you don’t have much of an online presence already, also take a deeper look at your approach to marketing .

Inclusivity versus exclusivity

The art sector of NFTs professes to create an inclusive, protecting environment for digital artists to make money. Anyone with access to a computer can make an NFT and have the potential for it to blow up: whether your niche is realistic, 3D motion graphics or blocky pixels like the Nyan Cat video (which sold for $600,00, might I add). This has the potential to be life-changing for millions of creatives worldwide.

The hypnotizing Nyan Cat

Yet, one point to be aware of is how expensive the minting fee is. Designers must outbid each other to get their artwork ‘minted’ on Blockchain. Prices fluctuate, depending on time and network, but it ranges from anywhere between $80 to $1000. This fee doesn’t guarantee sales for designers, but without paying it they cannot list their artwork on the market.

4. A hefty ecological footprint

One controversy surrounding the world of NFT artworks is the impact it’s having on the environment. French artist Joanie Lemercier recently made news after his NFT sold out in 10 seconds, making thousands of dollars. Pretty incredible, right? Well, what he also could not foresee is exactly how much energy this transaction would consume: the equivalent of how much his studio uses over a full 2 year period, which is 8.7 megawatt-hours of energy.

His seller then resold the piece, which used the same amount of energy and horrified the artist who had looked to sell work online as an eco-friendly alternative to transporting physical work around the world’s museums. Lemercier went on to release a statement documenting the lack of transparency he faced from cryptoart platforms when investigating their energy consumption.

Joanie Lemercier’s NFT that consumed 8.7 megawatt-hours of energy.

Unsurprisingly, the fact that NFT artworks are so resource-heavy is hugely alarming for many designers. But this issue isn’t exclusive to trading cryptoart; it’s part of a bigger issue involving the digital mechanism, “proof of work”. Since its emergence in the early 90s,  proof of work has evolved to be used largely in cryptocurrency mining to create and mint tokens like bitcoin and ethereum. Highly powered computers essentially compete to get the most bitcoin and need to source a huge amount of electricity to do so.

Developments of greener alternatives are ongoing, but while bitcoin continues to dominate cryptocurrencies, this process that is so harmful to the environment is proving unavoidable for any designers wishing to sell their art as NFTs.

Does the NFT art industry have longevity? —

Well, the answer is we’re not too sure! April saw NFT prices shudder to a slump of 70% , yet with so much potential it seems unlikely that NFT art will run out of steam anytime soon.

I personally don’t think this is a fad, I believe we have been heading into a majority digital age for the last decade and this is just the next thing to become comfortable with. As a graphic designer myself, most of my work is made and prepared for some sort of print, however all my work is created digitally, so it feels a bit of a wasted opportunity to not create an NFT. I think this will be the same for many designers. The NFT world has too much potential to not see itself through.

How to actually create an NFT —

The first thing designers need to do on their way to setting up an NFT to sell is create a “Crypto Wallet”. This is going to store the Ethereum, which you will need to pay the minting fees. Then you will need to connect your Crypto Wallet to one of the NFT marketplaces.

NFT marketplaces allow designers and artists to upload their digital artwork and list it for sale online as an NFT. You can imagine them to be like Ebay or Etsy—except they’re purely for NFTs! The most popular ones include: Raribl e, OpenSea , Mintable , KnownOrigin and SuperRare .

One thing to keep in mind when uploading your artworks onto these is how many you’re going to provide. You can choose to put it on as 1 of 1, meaning there will only be one artwork to exist and be sold, or you could decide to upload a collection of the artwork with multiple copies. This is quite a huge decision to make because—like traditional art forms—the number of original editions and how rare a piece is will directly impact its value.

NFT art: to sum up —

The selling of crypto or NFT art holds the potential to transform the entire creative industry; its emergence is only the beginning of something that’ll feel mundane to future generations. Yet, the early world of NFT art fails to stand up as a reliable, inclusive environment to sell digital art upon. Our eyes are peeled to see what happens next—and we hope the tide turns in favor of designers.

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How NFTs Transformed The Art Market

Artsper’s best sellers

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Created in 2017, Non-Fungible Tokens (NFTs) invaded the art world, especially digital art. But how have they made it possible to buy or sell a unique work? How has this dimension revolutionized the NFT art market ? And why has it generated such speculation, coupled with an ecological disaster ? Artsper gives you the key to understanding NFTs and its stake in the art world.

NFTs and uniqueness: A fundamental principle

In order to understand the NFT art market, we must first understand what a non-fungible token is. “Fungible” is a specialized word in finance and economics, meaning: “easy to exchange or trade for something else of the same type or value”.  Non-fungible things are not possible to exchange. For example, a photograph of the Atlantic Ocean is fungible, while the ocean itself is unique and absolutely non-fungible. The NFT works on this principle: to propose a unique object that is not exchangeable with something similar.

The NFT art market, a revolution in the art world

While digital content was in essence duplicable, NFTs have made it possible to number and make each work unique. The “token” in NFTs represents a specific amount of digital resources one can own, buy, sell or trade. For the first time, digital works could gain rarity and obtain a certificate of authenticity. It became possible to sell a digital work as an original. Thanks to this system, the NFTs brought about a revolution on three levels in the art market. First, for the digital artists , who finally found a way to get paid for their work. Second, for the art world, because the purchase of art has become more democratic. And finally, for the global market, because a new parallel market has opened its doors to art collectors and resellers. The NFT art market, which until recently had very limited legitimacy, has now rocketed exponentially.

The explosive phenomenon of NFTs

In just 2 years, the impact of NFTs has increased the value of the digital art market by a factor of 10. By 2020, the NFT took off, generating up to $10 million per day by 2021. The first digital artwork to hit the headlines was the 9 CryptosPunks from Larva Labs, which sold for $16 million. Then it was Beeple’s turn to break all records in February 2021. Everydays: the last 5000 days sold for $69.3 million at Christie’s auction. Then, in November, Beeple created the first 3D NFT sculpture , Human One , which sold for almost $29 million.

At the same time, NFTs are also taking on classic masterpieces. In May 2021, the Uffizi Gallery in Florence collaborated with Cinello, an IT company that reproduces masterpieces into digital art, to reproduce and sell the first digital copy of a Michelangelo painting , the Doni Madonna . This NFT painting was purchased for €140,000. Yet the most expensive NFT work today is The Merge by digital artist, Pak. It was purchased by 28,983 people, for a total value of $91.8 million.

NFT art and speculation: A weighty innovation

Even if NFTs have allowed digital art to take open up a new world, it is also a market that weighs heavily on us, especially on the environment . When we say NFT, we mean crypto-currency, we mean computers, we mean very, very, very complex lines of code. And unfortunately, these digital puzzles consume an astronomical amount of electricity. Digital artist Memo Akten, for example, calculated the carbon footprint of a typical NFT. The result is overwhelming: it requires about as much as a month’s worth of electricity for an average EU resident. The same goes for the Ethereum crypto-currency, which consumes as much as a country the size of Libya. It’s a level of energy consumption that the world can’t afford to expend or to waste.

Is the party over for the NFT art market?

If NFT art has reached heights, it is mainly because it has seduced many investors and artists. It opened the doors to a new market and made possible the speculation of digital works of art.  While keeping the economic model used for the physical pieces, these are subjected to the same fragilities as the institutional market. The result? Many specialists feared a speculative bubble, which ended up bursting in May 2022. While the NFT price peaked in August 2021, it was worth 10 times less in July 2022. A plumet as furious as its rise. What will the future hold? It is still very difficult to predict.

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About Artsper

Founded in 2013, Artsper is an online marketplace for contemporary art. Partnering with 1,800 professional art galleries around the world, it makes discovering and acquiring art accessible to all.

Quantum leap: how a decade of NFTs has changed digital art

Two books take a look at the past and future of the non-fungible token. once seen as the creature of market hype, the nft now promises the first shared technical standard for the digital art world.

“This idea has refused to die”: Kevin McCoy, Quantum (2014), the first non-fungible token (NFT), a 179-frame screen recorded loop from a code-generated animation. From Robert Alice (editor), On NFTs (Taschen, 2024) Courtesy Kevin McCoy

The 10-year anniversary of a once-controversial new form of digital art, and disruptor of the art market, NFTs (non-fungible tokens), falls on 2 May.

In the lead-up to that anniversary, two important new publications combine to provide the first comprehensive history of a form that the art historian and critic A. V. Marraccini calls “a commodity, a provocation, a para-medium, a shibboleth, an inscribed artefact of capital at speed". On NFTs , edited by the artist and writer Robert Alice and published by Taschen, and a collected volume of essays drawn from the website Right Click Save , come with two complementary kinds of authority.

On NFTs is substantial in size and price—£750 for its cheapest first release (a general trade edition will follow later)—and has the feel and rigour of a catalogue raisonné. Its editorial aspiration, marked by that “On” in the title and each of its component essays, comes rooted in the grand tradition. “The title On NFTs is inspired by the art-historical and cryptographic tradition of the treatise," Alice writes, "exemplified best by the Renaissance artist, art historian, and cryptographer Leon Battista Alberti’s ... two treatises De Pictura/On Painting (1450) and De Cifris/On Ciphers (1466). Before the advent of blockchain, there exists no one individual in history who has furthered the dual fields of art and cryptography in equal measure.” Alice tells The Art Newspaper that he sees On NFTs as “a slow look at a fast art”.

Robert Alice breaks new ground with auction of generative art NFTs on Christie's 3.0

Right Click Save is witness to ideas taking flight as NFTs exploded, imploded then rose again. Writing in the introduction, Alex Estorick, editor of both the book and the online magazine, says the book's purpose is to create “a series of new media genealogies — what we termed 'crypto histories' — that situated ongoing developments within an expanded understanding of art.”

Both books are serious and compelling in their attempts to align NFTs with a wider perspective of the art market and art history. But looking back is only half the story. As NFTs begin their second decade it is important that their history is understood. Equally—as both books make clear—here is a compelling story still forming in a rich, complex artistic and cultural ecosystem around NFTs and the wider technologies of the blockchain and Web3 that they emerged from.

Robert Alice, On NFTs (Taschen 2024), showing the opening spread of the "NFTs are" section and the slip cover and stainless steel case for the Hard Code edition of the book, which was offered to the first 10 buyers at the auction sale on Christies 3.0 in March of Alice's related generative art series SOURCE [On NFTs] Courtesy of Taschen and Robert Alice. Photograph © Mark Seelen

Artists are adopting NFTs in their practice and leading museums have recently adopted them as part of their visitor experience. New kinds of cultural and public institution are forming around the blockchain technologies that NFTs are based on. And the sales market itself is in a new phase of growth after the wild explosion and near collapse of 2021 and 2022.

At a time when digital art is capturing public attention in numerous domains, now is a good moment to ask again why NFTs matter, and what they tell us about the future of art in a digitising world.

The Origins of NFTs

On 3 May 2014, the artists Jennifer and Kevin McCoy were attending the Seven on Seven conference organised by the the “born-digital” art non-profit Rhizome in New York City.

During a live presentation, they set out what they describe now as their, “vision of how blockchain systems could bring uniqueness to digital artworks and how such a system could create provenance, verification and markets in a natively digital way”.

The artwork they used to demonstrate this process was called Quantum , a 360x360 pixel, 179-frame screen recorded loop from a code-generated animation, minted on 2 May 2014. It would become the first NFT. From this simple beginning, the McCoys tell The Art Newspaper , “over the last 10 years this idea has refused to die and it is now bigger and more pervasive than we could have imagined.”

Three years later the idea of collectible, tradable, digital assets registered on the blockchain began to take off. The Ethereum blockchain offered a more flexible development environment than Bitcoin or other early blockchain platforms, and its launch in 2015 had given birth to the early NFT art movement by 2017.

That movement began with Curio Cards developed by Travis Uhrig, Thomas Hunt, and Rhett Creighton and released in May 2017. Soon followed by Cryptopunks and CryptoKitties , it established a style for early NFT art—simple illustration, sarcastic humour and pop-culture references —that seemed more an outgrowth of the depths of memes and social media culture than anything with a pretence to “art”. ​​

Seemingly self-contained within its own edgy, sarcastic universe, NFTs and NFT culture grew over the next three years, but it was with the Covid pandemic that NFTs exploded into the mainstream and created their own strange detonation of the contemporary art market.

Icarus rising—NFTs in 2021-22

The NFT bubble of 2021-22 showed how digital markets and digital media frenzy are inseparable in the crypto domain. Whilst the $69.3 million that Beeple’s Everydays — The First 5000 Days sold for at Christie’s in March 2021 remains astonishing, it is the aspirations behind its purchase which seem ambitious even three years later.

Beeple’s collection of his work, popular on Instagram but barely known beyond it, was bought by a crypto-fund called Metapurse. For them it was an asset that would help build a financial ecosystem through the launch of their own crypto-coin, B20—a coin which offered fractional ownership of what was now one of the top three most expensive artworks in the world. Around the B20 coin, Metapurse built digital museums and signed licensing deals—at pace they were constructing not just a new world-famous artist, but also a new kind of financial and art market from that artist. There was little comparison for this, and it was happening so fast it was hard for anyone to keep up.

But people were buying. In 2021, NFT trading—conservatively—reached $13 billion. The NFT was everywhere, and in the depths of a Covid pandemic, it still came as no surprise when "NFT" was named as Word of the Year by Collins dictionaries.

But for Metapurse and others, it could not last. The bottom fell out of the market in 2023. In the wider crypto space, many Towers of Babel were falling all at once with the collapse of Sam Bankman-Fried’s FTX just the most notable of series of disasters that were closer to the avant-garde farce of Thomas Pynchon than the ubermensch fantasy of the books by Ayn Rand so beloved by Silicon Valley.

The birth of a shared ecosystem

It was hard to turn away from the remarkable ascent, and then dramatic crash of the NFT from 2021 to 2023.

Digital markets have been prone to boom and bust driven by what the economist Robert J. Shiller calls “narrative economics”—online noise driving a hype-and-crash cycle of extreme speed. But whilst the world was watching, elsewhere, quietly and patiently, new organisations and institutions were building connections between NFTs and the wider Web3 and blockchain culture with art galleries and museums; significant artists were both adopting and emerging from the medium, and threads between NFT art and art history were being tied.

Making connections between NFTs and wider contemporary art and art history has been advocated by the website Right Click Save . Founded in 2021 by Jason Bailey, and edited by Estorick, Right Click Save has pursued three ideas: “to encourage healthy debate; to celebrate digital art for the vital cultural contribution it makes; and to blend the rigour of traditional art scholarship with a form of radical inclusivity that rejects elitism on the basis that art can be made and enjoyed by everyone.” The Right Click Save book, published by Vetro, is an elegant testimony to that purpose.

If Right Click Save has been the storyteller, then Diane Drubay, founder of We Are Museums and the WAC Lab has been its most successful connector. WAC Lab, launched at Art Basel in 2021, is an innovation programme and accelerator. Now in its third cohort, it guides museums and cultural institutions through a structured multi-week programme of understanding Web3, NFTs and blockchain. Each participant develops an early stage prototype project with a specialist blockchain start-up.

Paris's Centre Pompidou breaks new ground by acquiring 18 NFTs

Their first notable success was with the integration of NFT collectibles into the digital artist Ian Cheng’s show Life After BOB (September 2022) with the Light Art Foundation in Berlin. Forty-four institutions have so far participated. In its second season, the Musée d’Orsay, in Paris, marked, as Drubay says, “another significant milestone”. After participation in the program, says Drubay, “the museum embraced a bold Web3 strategy, introducing digital souvenirs by Keru and collaborating with the artist and musician Agoria to offer a captivating artistic experience. ⁤⁤Visitors were invited to participate in a contemplative artistic experience, blowing into their phones to generate live artwork inspired by the museum’s collection, subsequently minted as NFTs.”

The Musée d’Orsay is one of the largest museums to have shown significant and nuanced adoption of NFTs into its visitor offer. Also in Paris, the Centre Pompidou in February 2023 made a major acquisition of NFTs (and recently acquired a piece by Robert Alice, editor of On NFTs ).

Mail art meets NFTs for all in the ‘MoMA Postcard’ programme

In New York, the Museum of Modern Art (MoMA) has also explored different ways NFTs might become part of its visitor experience. In just a few short weeks in October and November 2023, they launched an NFT collectible as part of their staging of Refik Anadol’s Unsupervised project, and then their Postcards project, which allowed you to create and share simple digital postcards through an NFT wallet. At a point when the SEC was clamping down on the commercial trading of crypto-currency, MoMA acted to show the non-financial way NFTs could be traded on values of friendship and sharing.

Even Beeple, the original renegade outlier of the NFT market, has started drawing threads between his work and the wider art world. After opening a 50,000 sq foot studio in Charleston, South Carolina, in 2023, he has begun working in partnerships with the Gibbes Museum in the city and others. Everywhere now, new connections are being made that tie NFTs to the contemporary and to wider culture, recasting them as another part of art’s rich story.

Radical friends—alternative cultural institutions

Playing nice between the world of NFTs and the contemporary and institutional art world is all well and good, but it risks overlooking the crypto-world’s radical roots.

Whilst these bridges are being built, elsewhere NFTs and the blockchain have inspired entirely new visions for what artistic practice, galleries and museums might look like in a Web3 world, rewriting institutional rules and behaviours of cultural institutions for a digital world.

Of the different ways to do this, the blockchain and the Decentralised Autonomous Organisation (the DAO) offers the most potential. It presents a system for alternative hyper-democratic forms of digital governance on which new organisations can grow. Ruth Catlow, founder of Furtherfield, brilliantly explored this in her book Radical Friends (2022), which looks at the different ways in which DAOs could lead to inclusivity, equity and eco-social change.

In London’s Hackney Wick, one model of how DAO’s might shape tomorrow’s art institutions is taking shape: ArtSect Gallery . ArtSect offers one glimpse of an alternative future. But perhaps the key decentralised museum project is Arkive , which emerged out of the mainstream West Coast crypto community. Arkive describes itself as “a museum curated by the people", with a mission to build “the most expansive and representative collection of culturally significant art & artifacts”.

What Arkive represents is a serious, well-funded attempt to build a digital-age museum around the principals of the DAO—and then place it in the middle of the contemporary art world. Founded by the tech industry-veteran Tom MacLeod, Arkive has very rapidly built a community of real action and system-changing potential.

Core to what Arkive does is collective acquisition of art and artefacts—building a collection that, whilst still in its early stages, represents a search for objects that reflect, embody, and witness turning points in art or culture driven by technological advances. From Nam June Paik to Lyn Hershman Leeson, to key video from the Black Lives Matter (BLM) movement, the community-curated acquisitions are building a collection of significance and with a real point of view.

What Arkive is doing is building leverage. As Arkive grows it will lend its collection. A virtual institution with a collection of real value holds some power to influence change, making new rules that others may need to bend to. It is an example that will inspire others and deserves close attention.

Where next? Towards an integrated digital art market

Where will this lead us? What will NFTs, Web3 and blockchain look like when they are 20, 30 or 40?

At a point where digital art is becoming hyper-visible through the rise of what, in February 2024, The Art Newspaper called “the immersive institution” , it may be that what we are seeing is the coming into being of an integrated digital art market which has both end-points where new work by major artists can be both seen by—sometimes—millions of people, and bought by collectors.

Tipping point: how new immersive institutions are changing the art world

That possibility has opened doors for artists of a previous generation of digital art for whom the fragmentation of digital art has meant both creative opportunity but also a terrible fragility in the preservation and market-access of their work.

Auriea Harvey is one of this wide body of artists who’ve worked across web and net art. The retrospective of her work now on show at New York’s Museum of the Moving Image brilliantly captures her experiments in 3D printing and other physical, preservable digital technologies. But a body of her work is absent—the net art, websites and games she has made which over the last 25 years have depended on obsolescent technologies—and are now a sad list of increasingly inaccessible links on her website.

This ultimately is why NFTs matter, and why we are at a transitional moment. As the McCoys saw right back with Quantum , NFTs and the permanent record they create are a chance to document, preserve and build a viable market for digital art that the earlier decades of experiment lacked. They are a common technical standard from which a medium can grow—the closest thing we have to canvas for digital art—in the permanent certification they provide to images, video and other digital formats.

Out of that commonality, the rest of the NFT’s and the blockchain’s rich promise may begin to be realised. As Diane Drubay says, “With blockchain, decentralisation, immersive experiences, and AI advancements, we face a seismic shift in content and culture creation as well as in distribution and ownership. More than the technologies and their applications, it is a redefinition of roles, timelines, and spaces.”

The first ten years have been just the start of the NFT journey. There is much more to come.

• Robert Alice (editor), On NFTs (Taschen, 2024)
• Alex Estorick (editor), Right Click Save (Vetro Editions, 2024)

interview: robert alice's 'on NFTs' is the largest art historical survey of blockchain-based art

On nfts: an art historical catalog of the medium.

While the buzz around NFTs might have seemingly quietened down alongside volatility and crashes in the crypto market, Robert Alice reminds us of the thriving art scene within its cultural sphere. On NFTs, edited by the London-based artist and published by Taschen, is the largest art historical survey on blockchain-based art to date. Spanning the entire NFT ecosystem – from algorithmic art to avatars – On NFTs seeks to demystify all facets of this medium that has been shrouded in misconception in the realm of contemporary art since it found its footing almost a decade ago.

A compilation of ten academic essays from pioneering voices in art and the blockchain including Hans Ulrich Obrist; extensive essays exploring ideas such as Sol LeWitt’s influence on artistic algorithms; glimpses into the creative processes of the likes of Beeple and Refik Anadol shape the book. Illustrated profiles of 101 key and emerging artists that have shaped the scene from its peaks to its troughs are authored by expert curators, critics, artists, and even AI to present an extensive glossary of terms, and a comprehensive exhibition history and timeline of the digital art canon. Unlikely, yet thought-provoking connections across art history are also charted, putting works by artists like Rembrandt up with CryptoPunk avatars. Through this, Alice examines crucial processes including the use of AI and blockchain as a medium. The book materializes the evolution of its virtuality in print, surveying its context in history to contemplate its future: ‘Building bridges with history helps us to understand how NFTs fit within the wider art historical narrative, and create surprising connections that reframe the context for a wider general public,’ Robert Alice tells designboom.

Read on for our full conversation with Robert Alice, NFT artist and editor of On NFTs, as we discuss his compilation of the catalog and views on demystifying the craftsmanship behind digital art while beginning to distinguish NFT art from the wider financial crypto market. ‘The media has done a good job of creating clickbait news items that have put NFTs and $ in the same headline, but not exploring the deeper significance of the art being made,’ says the artist.

interview with nft artist and editor, robert alice

designboom (DB): Can you introduce us to your practice as an artist, writer, editor, curator. How has your career evolved?

Robert Alice (RA): I make work that investigates blockchains and their histories, whatever is the best medium to do that — whether it is making art which is my primary focus, or curating. I trained as an art historian so I have always had an interest in writing, and much of the artwork I make is text-based. Blockchains at their core are history machines. Satoshi actually originally called them timechains. They are the biggest breakthrough in the history of publishing since Gutenberg. Being part of a community that has really exploded on the global stage has provoked an interest in not just making work, but telling the wider contextual history that I am fortunate to be part of as an artist. It is rare that you get to lay down a history as it is being made.

DB: With On NFTs, what drove you to compile such a comprehensive exploration of the digital art medium, and how do you aim to demystify all the various facets of the NFT ecosystem?

RA: On NFTs is really a primary history. It’s the first of its kind, and joins an art historical network that is now coming online with increasing speed. NFTs are one of the most exciting areas of contemporary art today, they are this divisive medium, often misunderstood, that carries a rich history that is largely unknown.

Publishing is the foundation of art history, and the blockchain while it will always be the primary source, is limited as just an economic ledger. It tells you not just who (pseudonymously), but what, at what time (down to the second), and at what price (down to the smaller unit of account). But in doing so all the important cultural and socio-political history, the context that gives art its soul — this is where books come in.

Publishing is also something that the public and art public feels comfortable with. If you read, you have had that feeling of sinking into a book. NFTs are a fast art, and books slow you down. It’s easier to pick up a book and engage in the subject, than creating a wallet address, purchasing Ethereum, and transacting with an NFT contract. Books are a good place to start.

‘building bridges with history’

DB: As it catalogs this rich network, On NFTs also draws unlikely connections across art history, putting works by artists like Rembrandt up with CryptoPunk avatars. How do you see these connections contributing to the discourse surrounding NFTs and their place in contemporary art?

RA: With new technologies, there is always the initial instinct to see them as a radical rupture with the past. It is a less conventional narrative today to look for the ties with the past in a way to understand history as a continuum. So much airtime has been spent on discussing the blockchain and NFTs as a disruptive technology, but in many ways they are more an old way of doing new things, resurrecting older models such as the patron-artist relationship, the idea of the guild as a community structure.

Building bridges with history helps us to understand how NFTs fit within the wider art historical narrative, and create surprising connections that reframe the context for a wider general public.

DB: In light of recent market fluctuations and the ‘crash’ in the crypto world, how do you perceive the ongoing relevance of NFTs — what has changed and how do you see their intersection with art and technology evolving?

RA: The first is to say that art and the market is relevant, but only from an economic purpose. The media has done a good job of creating clickbait news items that have put NFTs and $ in the same headline, but not exploring the deeper significance of the art being made.

NFTs are still being minted, the real artists have stayed. And when you have been around the volatility of the crypto space for some time, it’s more important to look at the bottoms than the peaks. You have to remember that only 5 years ago, there was $0 of art being traded on the blockchain, and now, despite a 80% drawdown, the blockchain is host to billions of $ of art transactions per year. That is quite remarkable.

DB: How do you think artists can navigate this volatile space moving forward?

RA: Focus on the work. Like all great artists have past and present.

DB: Are there any particular developments that you believe will inform the future trajectory of NFTs and digital art?

RA: It’s important to share the craftsmanship that goes into making digital art. Often that there is the perception that digital art is easy to make as it uses automation, code, and disturbs our traditional notions of craftsmanship as rooted in the hand. Digital artists working today are some of the most technically advanced craftspeople in contemporary art. But importantly, the book is a celebration of a wider community, the collective over the individual. So rather than focusing on key artists, key processes include the increasing use of AI, the blockchain as a medium, the creation of infinite time based art, the use of game theory, traits, art that evolves, the idea of community art, the role of the collector as co-creator, and long-form generative art are all idea-spaces that are incredibly exciting.

project info:

name: On NFTs

editor: Robert Alice

publisher: Taschen

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The New Online Art World in the Post-NFT Era

As part of the offerings in our digital magazine, we’ve launched Dispatches From the Art World , a series of guest essays that investigate the latest and most fascinating opinions and trends shaping the industry. This essay by Anika Meier , the Kunstforum columnist, art historian, and expert on digital art and NFTs,    focuses on the changing landscape of the NFT art scene. 

Edited by: Chris Erik Thomas , Digital Editor of Art Düsseldorf.

What is an NFT besides an NFT?

Ever since the hype surrounding NFTs began, artists have had to answer one question over and over again: Why pay money for it? And then so much. 69 million for an image file that you can download with one click on the Internet? It has been explained over and over again that NFTs are digital certificates of authenticity. While 69 million people can download an image file and share it on social media, only one person, if it’s a 1/1, can own and resell that image file.

The excitement was great, the lack of understanding even greater, because this was supposed to be the great revolution in art. And, no matter how irritated one is by the three letters NFT, it can no longer be ignored or denied that, just under a year after the hype began, a new online art world has emerged that has little to do with what the old offline art world has to offer. New artists: Beeple, Pak, XCopy, Fewocious, Justin Aversano. New Marketplaces: Nifty Gateway, SuperRare, Foundation, Quantum, OpenSea. New magazines: Right Click Save, Outland.

And of course, it seems a bit whimsical, the new online art world that doesn’t care much about the old offline art world. Beeple’s auction record at Christie’s should make it clear that something is moving. It was a bang that couldn’t be ignored. And then, a little over a year after the historic event, Beeple, aka Mike Winkelmann, is delighted on Twitter that he’s been able to “add value to NFTs through physical art and airdrops” and make something like a subscription to a single work of art out of it.

To me being able to add additional utility to NFTs through both physical art and airdrops that allow them to almost act as a subscription to a single work of art that can continue to evolve over time is something very exciting and unique to this new medium. 🙏🙏🙏 — beeple (@beeple) March 26, 2022

"Crypto Kiosk“ curated by Kenny Schachter. With works by Kevin Abosch, Olive Allen, Sarah Friend, Rhea Myers, Kenny Schachter, and Theo Triantafyllidis. Galerie Nagel Draxler. Art Basel, 2021. Photo: Simon Vogel.

"Metaverse“ curated by Kenny Schachter. With works by Kevin Abosch, Olive Allen, Sarah Friend, Osinachi, DotPigeon, Anna Ridler, Kenny Schachter, and Theo Triantafyllidis. Booth Galerie Nagel Draxler, Art Basel, Miami Beach 2021. Photo: Dawn Blackman.

Wait, there was something. The story goes like this: NFTs enable digital art to finally be sold in the same way as the classic media of painting and sculpture, because the blockchain regulates who owns such an NFT. Among other things, Beeple said in interviews : “I do view this as the next chapter of art history. Now there is a way to collect digital art.”

The market exploded. For months we heard about record sales: Nyan Cat ($590,000), Fewocious ($19 million), CryptoPunks ($23 million), Ix Shells ($2 million), XCopy ($7 million), etc. etc. Then the setback. In December 2021, the online magazine Hyperallergic summarized the results of a study that took a closer look at the NFT market .

Democratization? Revolution? The numbers say otherwise: the NFT market reproduces the dynamics of the art market: 10% of collectors are responsible for as many transactions as the remaining 90%. The average selling price of 75% of NFTs is only US $15. Only 1% of NFTs sell for more than US $1594. Another study was published in February 2022 that looked at networks in the NFT scene using the example of the NFT platform Foundation. If you want to sell NFTs on Foundation, you need an invitation from an artist who has already sold on Foundation. This study also shows that the NFT art market works in a similar way to the traditional art market: a large number of artists offer works, but only a small number actually sell, including artists who were early on the platform. So it’s again about the right network and standing ou t , be it with a story or with innovation.

NFTs have become better stamp cards, like those you know from the supermarket or the coffee shop on the corner.

Even Jeff Koons, who probably still feels (like everyone else) that he’s a bit late with NFTs, had to come up with something. Ai Weiwei launched a virtual currency with Irish conceptual artist Kevin Abosch back in 2018 to spark a discussion about the value of human life. With his NFT drop “Currency” in 2021, Damien Hirst also pursued the goal of promoting the debate about values, albeit with an eye on art. Collectors must decide whether they want to keep the NFT or have the physical version of the currency.

Tom Sachs turned his NFT drop into a rocket factory. The three rocket parts (nose, body, and tail) were randomly sold as NFTs. If you wanted, you could combine the individual parts that did not belong together into a “Frankenrocket” or trade three matching individual parts on the secondary market to get a “Perfect Rocket”. The individual NFTs were then burned and the rocket was minted as a new NFT. And it goes even further: if you want, you can get the right physical rocket and a launch date for the rocket. Well, since it’s not a real rocket, such a launch can only fail: the physical individual parts are then put together again and sent to the owner together with video documentation. Together with the digital rocket, these three components form the Holy Trinity, as can be seen on the project website. Or in other words, “a singular transdimensional NFT, and it is yours to keep.”

Of course, Jeff Koons didn’t have much left. He actually has to go to the moon with his art and the NFTs because all other attention-grabbing and conceptually strong topics seem to have already been occupied: soul on the blockchain (Rhea Myers), DNA on the blockchain (Rachel Rossin), and shared artistic practice on the blockchain (Jonas Lund). Has anyone actually been waiting for Jeff Koons’ NFTs?

While artists from the traditional art world seem keen to get involved when it comes to NFTs, $69 million for Beeple and $91.8 million for Pak (“The Merge”) probably sound attractive, artists from the new online art world have already arrived in the post-NFT era. What does that mean?

Skye Nicolas. "BUT WE CAN CALL IT PARADISE", 2022. NFT. Courtesy PRISKA PASQUER, Cologne.

From the early beginnings of computer art (including Herbert W. Franke, Vera Molnar, Frieder Nake, and Manfred Mohr) to the NFT hype. If you’re less generous with the timing, from the beginnings of the blockchain to the introduction of the Non-Fungible Token Standard in early 2018.

From the launch of the Non-Fungible Token Standard in early 2018 to the end of the NFT hype year of 2021, with Pak’s NFT drop “The Merge” on Nifty Gateway.

With Beeple’s tweet at the end of March 2022, answering the question about the utility has become a matter of course.

Skye Nicolas. "TO FILL THIS SPACE OF EMPTINESS", 2022. NFT. Courtesy PRISKA PASQUER, Cologne.

What is an NFT besides an NFT? A ticket to the Metaverse (Clone X, Fewoworld), a membership card for a community (Bored Ape), and an entitlement to future mints and airdrops (e.g., Refik Anadol). Basically, NFTs have become better stamp cards, like those you know from the supermarket or the coffee shop on the corner. And of course, it’s about more than a free broccoli cuddly toy or a few euros saved when buying a pan.

Above all, post-NFT also means that NFTs and thus the interest in digital art have become so commonplace that NFTs and digital art also want to be experienced in physical space. This sometimes gets a bit spectacular: the NFT platform Aorist set up a huge screen by Refik Anadol right on the beach for Art Basel Miami Beach. For three weeks in April, Bright Moments presents the NFT Art Berlin event in Berlin at the Kraftwerk. The numerous names listed on the poster probably mean nothing to regular visitors to the Gallery Weekend and Berlin Art Week. The new online art world shows itself there, with immersive experiences and live minting, with CryptoBerliners and Crypto Artists. Vellum LA and Superchief Gallery NFT like to display NFTs on large screens in public spaces.

Artblocks now has a location in Marfa, Texas, a house showcasing generative art, and Quantum will soon be opening its first location in Los Angeles. Nagel Draxler has opened another gallery location for NFTs in Berlin with the Crypto Kiosk, and Priska Pasquer is showing NFTs at Art Düsseldorf. And Beeple, yes, he is showing an exhibition of paintings and prints at the Jack Hanley Gallery in New York entitled “Uncertain Futures”.

The Art Basel and USB Global Art Market Report has just been published, and for the first time, NFTs were also comprehensively taken into account. 74% of high net worth collectors bought art NFTs in 2021. And while almost all high net worth collectors, 88% of those surveyed, would like to buy NFTs in the future, not even half of the galleries are interested in selling NFTs. Of the high net worth collectors who have already bought NFTs, only 8% use an NFT platform, the vast majority trusting galleries and auction houses.

This finally answers the question of what you still need galleries for. For the presentation of (digital) art at fairs and in galleries. For the mediation and contextualization of the work. And for selling NFTs to traditional art collectors.

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• Published: 17 February 2022

Quantifying NFT-driven networks in crypto art

• Kishore Vasan 1 ,
• Milán Janosov 2 , 3 &
• Albert-László Barabási 1 , 3 , 4  

Scientific Reports volume  12 , Article number:  2769 ( 2022 ) Cite this article

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The evolution of the art ecosystem is driven by largely invisible networks, defined by undocumented interactions between artists, institutions, collectors and curators. The emergence of cryptoart, and the NFT-based digital marketplace around it, offers unprecedented opportunities to examine the mechanisms that shape the evolution of networks that define artistic practice. Here we mapped the Foundation platform, identifying over 48,000 artworks through the associated NFTs listed by over 15,000 artists, allowing us to characterize the patterns that govern the networks that shape artistic success. We find that NFT adoption by both artists and collectors has undergone major changes, starting with a rapid growth that peaked in March 2021 and the emergence of a new equilibrium in June. Despite significant changes in activity, the average price of the sold art remained largely unchanged, with the price of an artist’s work fluctuating in a range that determines his or her reputation. The artist invitation network offers evidence of rich and poor artist clusters, driven by homophily, indicating that the newly invited artists develop similar engagement and sales patterns as the artist who invited them. We find that successful artists receive disproportional, repeated investment from a small group of collectors, underscoring the importance of artist–collector ties in the digital marketplace. These reproducible patterns allow us to characterize the features, mechanisms, and the networks enabling the success of individual artists, a quantification necessary to better understand the emerging NFT ecosystem.

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Introduction.

Despite the important social, cultural, and historical role art plays in the society 1 , 2 , 3 , the evolution of the art ecosystem lacks transparency, being driven by largely invisible interactions between artists, institutions (galleries, museums), collectors and curators. In other words, artistic success is controlled by gate-keepers and informal networks 4 , 5 , that rely on information that is available only to those with privileged access 6 . In contrast with science, whose main output, the research papers, are publicly available and catalogued in databases, we lack systematic data on the list of works (products) and the transactions that shape the evolution of the art ecosystem. Consequently, while a new discipline called the science of science 7 , 8 has emerged to explore the quantitative patterns characterizing science, artistic careers have largely resisted quantification 9 . This has changed recently with the emergence of crypoart, and the cryptocurrency-based digital marketplace born around it, in which all transactions are open and visible. The resulting transparent art ecosystem is accessible to all participants without formal gatekeepers and barriers 10 , offering unprecedented opportunities to quantify and understand the forces, mechanisms, and hidden networks that shape its evolution.

A Non-Fungible Token (NFT) is a permanent and certifiable online record that connects a digital artwork, often called cryptoart, to its owner. Most NFTs are listed on an Ethereum monitored decentralized cryptocurrency platform that utilizes blockchain technology, normally used to power millions of transactions across the globe for multiple applications 11 . Each transaction pertaining to an NFT and the associated artwork is stored in a ledger via a Proof-of-Work (PoW) mechanism, enabling easy and fail-proof transfer of digital assets, and verifiable ownership of art 12 , 13 . Hence, NFTs 14 offer a mechanism for artists to create digital works of art and validate their work as unique, eternal, and worth collecting 15 , 16 , and offers collectors the ability to showcase their collections on digital platforms. Driven by this technological innovation, digital art experienced $2.5 Billion in sales just within the first two quarters of 2021 17 .

The trading of cryptoart is mediated by trading platforms like OpenSea, NiftyGate, SuperRare, Foundation, and others. Previous research on cryptoart has focused on one of the earliest platforms, SuperRare, which is a curated, invitation based cryptoart gallery, exploring the evolution of the marketplace 18 , co-ownership patterns 19 , evaluation by expert art curators 20 , and re-sale dynamics 21 . Here we focus on Foundation ( https://foundation.app ), launched in February 2021, a rapidly growing artist-driven platform, focused on highlighting the art of recognized artists. In contrast with platforms like SuperRare and NiftyGate, where new artists are accepted slowly through an application process, Foundation is an open platform, meaning that any active artist or collector can invite new artists. This decentralized access has turned Foundation into an organically and rapidly growing marketplace whose evolution mirrors the demand and interest in cryptoart. Given its open architecture, through Foundation we can trace the dynamics of creating, bidding, buying, and selling art, allowing us to map out the complex interconnected network that govern the relationships between artworks, artists, and collectors. Further, it allows us to investigate artistic careers, the emergence and influence of social networks between artists 9 , 22 , their multiple stakeholders 23 , 24 , and the patterns that govern the success of individual artists.

Data collection

Each artwork (NFT) minted on Foundation contains a unique contract address followed by a unique identifier for the artwork (also indexed through tokens). For example, one of its early adopters, NyanCat , sold a viral animation of a cat on February 19, 2021, for 300 Ethereum (worth over a million USD today; https://foundation.app/NyanCat/nyan-cat-219 ). NyanCat’s art can be found on the Ethereum network as contract address 0 x 3 B 3 ee 1931 Dc 30 C 1957379 FAc 9 aba 94 D 1 C 48 a 5405 and token id 219, two pieces of information that allow us to identify all of the artwork minted on Foundation. We used the public open-source Graph API ( https://thegraph.com/ ) to extract the metadata about the artworks, identifying the creator of the artwork, minting and listing time, all the bids (monetary offers to purchase it), allowing us to reconstruct the selling (primary market) and re-selling (secondary market) history of each artwork. This data extraction mapped 50,723 minted artworks, of which 48,059 (94.7%) are listed for sale, and 15,279 (31.7%) have been sold. The listed artworks have collectively received 37,013 bids from 7787 bidders. We find that 1928 (12.61% of all sold) artworks have been re-listed for sale on the platform, and 138 (7.15%) have re-sold. This indicates that Foundation is predominantly used for primary sales, compared to SuperRare, which has a more robust secondary market 19 , 21 . As a result, we focus only on the primary market, i.e. the listing of the artwork by the artist and its first purchase by a collector.

The artists and collectors on the platform have a unique etherscan wallet id that they use to list and bid for art. We used this id to extract the profile metadata of each user, together with the list of followers (i.e. other users that follow that artist on the Foundation platform), links to social media sites like Twitter and Instagram. We extracted metadata information about 15,366 artists and 5534 collectors on the platform and the twitter metadata for 13,487 (87.7%) artists, including profile address, the number of followers and following. To control for the changing monetary value of Ethereum tokens, we map the ETH bidding amount to its USD price at the day of sale ( https://etherscan.io/chart/etherprice ). The dataset, extracted on June 18, 2021, is available on a Github repository at https://github.com/Barabasi-Lab/crypto-art , along with the code used to crawl the data.

The rise and the fall of the NFTs

To understand the temporal and historical dynamics of cryptoart, we begin by investigating the patterns of activity of the Foundation platform, focusing on new artists (Fig.  1 A), art listed (Fig.  1 B) and sold (Fig.  1 C), and the arrival of new collectors (Fig.  1 D). The data indicates that the adoption of digital art exploded in late February 2021, peaked during March, and found a new steady state around May 2021. This pattern is particularly obvious if we inspect the arrival of new artists, indicating that the platform attracted an exceptional number of new artists in mid March and April, following Christie’s attention-grabbing auction of Beeple’s art for $69,346,250 25 . However, early May the number of new artists briefly dropped back to its early-March level (Fig.  1 A), raising again to reach a new steady state. This rise and fall is also well documented by the number of art sold and number of first-time collectors on the platform (Fig.  1 C, D), curves whose temporal trends strongly correlate with the number of new artists.

The timeline of NFT adoption on foundation. ( A ) Number of new artists listing art, indicating that many artists joined the platform in March and that adoption reached a new equilibrium following a decline in May. ( B ) Number of new art listed on the platform. ( C ) Number of artworks sold on the platform. ( D ) Number of new collectors purchasing art. ( E ) The daily listing and selling price of art, indicating that despite the changes in NFT adoption rate, the economic value of art has remained unchanged. ( F ) The earnings of innovators, early majority, majority, and laggards, showing that early artists have enjoyed higher earning than late joiners. ( G ) The list price of art in the four artist groups. ( H ) The selling price of art grouped by selling date. ( I ) The spending of collectors within each group, indicating that early collectors have been higher spenders than the late comers. ( J ) The selling rate of art within each artist and art group, showing that artworks listed in early groups have sold at a higher rate than in the late stages. Error bars show the standard deviation.

This adoption timeline allows us to investigate the patterns of success within each group, defined by the time when each artist/collector listed/bought art on the Foundation platform. While new artists and collectors continue to join the platform, they do so in smaller numbers, and the desire to purchase large number of artworks within short periods of time has faded, allowing the system to reach a new steady state activity level. Note, however that the decline in the adoption of new artists and new collectors in May does not imply a return to the pre-March attention to NFT’s as there are 13 times more artists and 12 times more collectors on the platform on June 1 than there were on March 1. Rather, the saturation of the adoption process suggests that most artists and collectors that intended to adopt in the first wave of the NFT art movement have already joined the platform.

First movers’ advantage in sales and valuation

Innovation research classifies the adoption of new technologies into five temporal stages 26 , 27 : (1) Adoption by innovators (or initial adopters), which in our case corresponds to the first 2.5% artists/collectors who joined the platform (from 21 January, 2021 to 22 February, 2021); (2) Arrival of early adopters (or early majority), representing the next 13.5% (from 23 February to 10 March); (3) Emergence of majority (34%) and late majority (34%) between 11 March to 18 May (4) Adoption by laggards, representing the final 16% (19 May to 18 June). The earnings of artists and the selling price of art in the different adoption stages helps us understand the advantage of the early adopters. Indeed, we find a monotonic decrease in total earnings with adoption time, indicating that artists who joined the platform later have earned considerably less than the artists that entered early (Fig.  1 F).

Similarly, collectors who joined the platform later have spent less than the early adopters (Fig.  1 I). These trends, however, may only represent a cumulative effect: those who arrived at an earlier time had more opportunities to sell or purchase art. Yet, if we normalize by time on platform, the first movers’ advantage persists: initial adopters have earned more than the early majority, which in turn earned more than the laggards, a pattern characterising collector spending as well (SI Fig.  S2 B, F). Early artists have also sold more art for a higher average price than the late comers’ (SI Fig.  S2 A, C, Normalized: D), and early collectors have invested in more art at a higher price than new collectors (SI Fig.  S2 E). This indicates that early adopters have established themselves as successful digital artists and collectors, benefiting from a first-mover advantage 28 , 29 .

Interestingly, the rise and the decline of interest in NFTs (Fig.  1 A–D) has not affected the average listing or selling price of the artworks: the daily listing and selling price has stayed remarkably stable over the explored five month period (Fig.  1 E; for grouped counts see Fig.  1 G, H). In other words, the value of the art has remained largely unaffected by the major influx of artists and collectors in the NFT space, and the complex temporal dynamics of the platform. Furthermore, the time it takes to sell an artwork also remained unchanged in this period (SI Fig.  S4 ). What has changed is the likelihood that a listed artwork does sell, measured as the fraction of the sold inventory (Fig.  1 J): 74.1% of the art released during the innovator period has found a collector, but only 13.3% of the art released during the laggard period sold.

Overall, we find that new artists have a diminished ability to sell art due to two connected factors (1) there is a considerably large inventory on the market, making it difficult for new artists to attract the attention of collectors and (2) the urge to buy digital art has stabilized. It is rather remarkable, however, that this complex market dynamics has not affected the listing and the selling price of art.

In-platform followers shape valuation

On Foundation, collectors can keep track of their favorite artists and their new art by following them, hence the number of followers of an artist captures the collective interest in an artist’s work. Most artists are also present on Twitter, and many of them regularly tweet their new work released for sale on Foundation. This raises several important questions: to what degree does visibility on social media, like Twitter, translate into visibility on the Foundation platform, as measured by the number of Foundation followers? Does external (Twitter followers) and internal (Foundation followers) visibility affects the value of the art and the likelihood to find a buyer?

To answer these questions, we measured the number of followers an artist has on the Foundation platform (internal) and the number of followers on Twitter (external). To test the effect of this visibility on sales, we quantified the impact of the number of followers on an artist’s earnings (see SI 4). We find that the total artist earning grows as \(N_{followers}^{\beta }\) with \(\beta = 0.792\) (CI [0.768–0.816]), capturing a strong sublinear growth with the number of Foundation followers (Fig.  2 A). We find a particularly strong correlation with the maximum price an artist receives for his or her work (Foundation \(\beta = 0.935\) ). For example, NyanCat with 5530 followers on Foundation has sold 5 artworks for a total of $1,078,247. At the same time the Twitter follower count is a weaker indicator of artist earning ( \(\beta = 0.305\) ; CI [0.288–0.322]), indicating that visibility on Twitter doesn’t translate into earnings on Foundation (Fig.  2 B). In other words, prestige and the earning power of an artist is derived primarily from his or her visibility on the Foundation platform.

The impact of follower count on artist earnings. We measure the number of followers on Foundation (internal) and Twitter (external) for each artist to measure the role of visibility on artist earnings. ( A ) The number of Foundation followers vs the total artist earning, finding a sublinear scaling with exponent \(\beta = 0.79\) (CI 0.76–0.81; \(R^2 = 0.41\) ), indicating that the more foundation followers an artist has, the higher the auction price of his/her work. Unsurprisingly, the top earning artist on Foundation, NyanCat , also has the most followers on the platform. ( B ) The number of Twitter followers and the total artist earning, finding that Twitter is a weaker indicator of artist earning, with a sublinear scaling of exponent \(\beta = 0.31\) (CI 0.28–0.32; \(R^2=0.18\) ). These results indicate that artist success depends on both platform and outside visibility, but measures of external following have weaker impact compared to the internal on-platform following.

The social network of the artists

Foundation is an organically growing platform, as it allows artists who have listed art on the platform and collectors who have purchased art to invite new artists. Information of who invited whom is displayed on each artist’s page, allowing us to map out the social network that fuels the adoption of the platform by new artists. Defining a node as an artist and a directed link marking who invited the artist to the platform, we obtain an artist network with 14,706 nodes (artists) and 14,066 links (invitations), which is fragmented into 640 isolated components (artist clusters) with an average community size of 22. Each artist cluster forms a tree, and we find that 594, or 91% of the clusters have emerged within the first 100 days of the platform, each containing on average 16 artists (SI Fig.  S6 ). These early artist groups initiated the subsequent growth of the platform (SI Tab S2 ), inviting further artists (Fig.  3 A).

The artist social network. ( A ) The first 100 days of artist adoption through invites. Each node corresponds to an artist and a directed link connects an artist to the artist who invited him or her to the platform. We show all clusters with more than 10 artists, resulting in a total of 13,010 nodes and 204 clusters. The top 20 artist clusters in terms of number of artists are colored and nodes are sized based on the number of artworks sold. The largest component (purple) consists of 941 nodes. To characterise the artist clusters, we perform two types of randomization, the first involves shuffling the node attributes and the second involves degree preserving link randomization. ( B ) The distribution of average earning per art per artist cluster, finding the emergence of poor and rich clusters, both extremes absent in the random reference data. ( C ) The distribution of number of art sold per artist per cluster, finding that artists in some clusters sell a lot more art than expected by chance. ( D ) Number of Foundation followers per artist per cluster and ( E ) Number of Twitter followers per artist per cluster, finding the existence of low and high popularity within communities, extremes absent in the random reference set. Red line indicates the average value of each of the empirical distributions.

For example, the largest artist cluster has 941 artists (9.26% of all), initiated by the artist sergeposters , who listed his first artwork on February 6, 2021, and invited 10 other artists, which in turn invited 43 others, who then invited 86 others, and so on, resulting in a cascade of adoptions. The resulting artist cluster collectively is responsible for $1,661,173 in sales from 867 artworks, raising the question if the artists’ success in selling art depends on the cluster she joined. We therefore measured the distribution of the average earning per art per artist in each cluster, finding it to be skewed to the right, indicating the presence of a few clusters whose earnings is much higher than expected if the artist clusters formed at random (Fig.  3 B). Indeed, in the empirical network, the maximum earning cluster collected $2,703,171 (with a mean of $6766), while in the randomized reference, where we shuffle the node attributes and conduct a degree preserving link randomization, the largest earning cluster has $901,796 (with a mean of $2684). Such high-earning clusters continue to persist if we disregard the highest earning artwork within each cluster (SI Fig.  S8 ). In the opposite limit, we also find evidence of “poor clusters”, i.e. clusters whose artists earn less than expected by chance. Taken together, we observe a segregation into both rich and poor artist communities, extremes absent in the random reference data. The differences between the artist clusters are also captured by multiple measures, from the number of artworks sold (Fig.  3 C) to the number of Foundation followers (Fig.  3 D), and the number of Twitter followers (Fig.  3 E).

Finally, we find that the differences between artists and their invitees in terms of earnings, number of art sold, and followers to be minimal, evidence of a strong homophily at the individual artist-invitee level (SI Fig.  S7 ). In other words, the earnings of a new artist tend to be similar to that of its invitor, offering evidence that the social network of artists is built through a unique combination of perceived reputation and follower base, that leads to a self-organized emergence of clusters that subsequently determine the success of individual artists.

Patterns of artist success

In the classical art market, the price of the artworks and the number of sold works grows with the artist’s increasing reputation. Some of this growth is maintained by galleries, who hold the price of art even when demand drops. As the NFT space lacks galleries as gatekeepers, we were curious if reputation effects have naturally emerged. We ask therefore, what is the impact of the previously sold art on the future price of the work by the same artist. Interestingly, the price history of the top selling artists fails to indicate an increasing trend in the art price (Fig.  4 A). Rather, it is not uncommon to have significant differences between subsequent sales (SI Fig. 12 ). For example, a high selling artist Allo sold his/ her fifth artwork for $2028, while the subsequent works fetched only $274, $332, $647, $818 respectively, while the tenth art selling again for $2178. Similarly, bosslogic sold his/ her eighth artwork for $27,987, but the subsequent works found lower sales of $18,165, $14,443, $11,082, until the twelfth work sold at much higher price point of $39,708 (Fig.  4 A, green).

The emergence of artist reputation. ( A ) The price of subsequent art sales ( i ) for three artists, bosslogic , pixlpa , and madmonk . The lines indicate the average sales price for each artist. ( B ) We grouped artists who sold more than 5 artworks based on their max selling price, allowing us to distinguish high reputation (green, top 5%), medium reputation (yellow, middle 75%) and low reputation (red, bottom 20%) artists. ( C ) The evolution of the selling price of an NFT as a function of the art item number for high, middle and low reputation artists. Symbols indicate the true observations while the shaded area indicates the random reference, obtained by randomizing artists careers (95% confidence interval). ( D ) The growth in the cumulative number of collectors ( \(N_{bidder}\) ) bidding for the work of three artists, paulsnijder , tfmstyle , and jeff.kraus . ( E ) The growth in the number of bidders ( \(N_{bidder}\) ) for different artist groups, highlighting the differences in growth rates based on artist reputation. Symbols indicate the true observations and the shaded regions represent the randomized careers (85% confidence interval). ( F ) The inequality curve (Gini coefficient) of investment by different collectors for the work of the same three artists as in ( D ). We quantify the linear growth in the collector base by measuring the slope of the rise in cumulative number of bidders ( \(m_{bidder}\) ) and collectors ( \(m_{collector}\) ). ( G ) The density function of \(P(m_{bidder})\) signalling bidder growth rate. ( H ) The density function of \(P(m_{collector})\) showing collector growth rate. ( I ) The Gini coefficient distribution of artists for different artist groups. The coefficient ranges from 0 (perfect equality) to 1 (perfect inequality), demonstrating that the investment by collectors for high reputation artists is highly unequal.

Despite these fluctuations, we also observe a certain degree of stability, finding that for most artists the sales price fluctuate in a well-defined range. For example, bosslogic repeatedly attracts sales in the range of $10,000 to $30,000 (Fig.  4 A, green), while pixlpa sells art in the range of $1000–$2000 (Fig.  4 A, blue). In contrast, for madmonk the sales prices are regularly much lower, in the range of $250–$350 (Fig.  4 A, orange). In other words, while sales prices do show considerable variability, they fluctuate within a predictable range that defines the reputation of an artist (SI Fig.  9 ).

To quantify the role of reputation in the NFT space, we categorized all artists into three groups based on their highest individual sale price: the bottom 20% (low reputation, top sale being less than $1254), the middle 75% (medium reputation, top sales between $1254 and $18,510), and the top 5% (high reputation, highest sale above $18,510) (Fig.  4 B). The three artist groups are also separated based on number of followers indicating that reputation correlates with popularity (SI Fig.  10 ). We find that artists within each of these groups experience only nominal changes in their sales patterns, i.e. high performing artists continue to receive higher number of bids for new art (SI Fig.  11 ) and repeatedly attract high prices for their new art, while low reputation artists have difficulty demanding higher prices (Fig.  4 C). In summary, the sales price of the art by the same artist shows a degree of stability over time, indicating the emergence of reputation effect in crypto art, similar to those observed in scientific careers 30 .

The impact of sustained artist–collector ties

In the traditional art space, collectors discover new artists through gallery and museum exhibits. In turn, gallerists work with curators to create opportunities for emerging artists to showcase their work, both in the galleries and in museums 9 , bringing it to the attention of collectors. As the cryptoart space lacks the formal role of gallerists, curators and museums, success in this space is mediated by potential direct relationships between artists and collectors. We therefore ask, what is the role of collectors in the success of individual artists? We find that the continued activity of an artist attracts collector attention: the number of bidders interested in a given artist’s work grows with the number of sales by the artist (Fig.  4 D, E). We approximate the linear growth rate of an artist’s collector base measuring the slope of the cumulative count of bidders ( \(N_{bidder} \propto m_{bidder}*{i}\) ) and collectors ( \(N_{collector} \propto m_{collector}*{i}\) ), where i is the art item number, finding that 80% of the artists have \(m_{bidder}>1\) . The distribution of \(P(m_{bidder})\) documents the explicit differences between artist groups: for high reputation artists the peak is at \(m_{bidder} \sim 2\) , while for low and middle reputation artists it peaks at \(m_{bidder} \sim 1\) (Fig.  4 G). In other words, high reputation artists, attract bidders twice as fast than low and medium reputation artists.

At the same time, 75% of the artists have \(m_{collector}<1\) (Fig.  4 H), a slower growth rate indicating that each subsequent sale does not necessarily attract a new collector, evidence of return purchases by repeat collectors (SI Fig.  13 ). In contrast with the difference in bidder growth among artist groups, the distribution of collector growth, \(P(m_{collector})\) are indistinguishable for low, middle, and high reputation artists, indicating that new and returning collectors follow a common pattern. This similarity prompts us to ask, are there differences in investment patterns of collectors based on artist reputation?

Interestingly, we find that level of collector’s investment across artists is highly uneven (Fig.  4 F, I). We quantify such disparity using the Gini coefficient, that ranges from 0 (complete equality, when all collectors of an artists have spent the same amount on the artist’s work) to 1 (extreme inequality, when a single collector buys all of an artist’s work). We find that high reputation artists have an average Gini coefficient of 0.53, much higher than the value obtained for medium (0.34) and for low reputation (0.26) artists, indicating that high reputation artists derive their earnings primarily from a few collectors who make large and repeat investments, while medium and low reputation artists capture a more uniform spend from their collector base (Fig.  4 I).

Such artist–collector dynamics is well illustrated by the sales of PaulSnijder ( \(m_{bidder} = 3.19, m_{collector} = 0.82\) ), who has three (12.5% of all) returning collectors that purchased six of his artworks (22.2% of all), spending on them $46,842, representing 61.5% of the artist’s total earnings. The remaining 21 (87.5% of all) collectors account for only 38% of the artist’s earnings. In general, for the top 180 artists who sold 10 or more artworks, the combined 2743 artworks sold by them have collected $5,911,037 from 1264 collectors. Yet, we find that 414 (32.75%) of these collectors made repeated investment, being responsible for 1893 (69.01% of total) artworks for a total of $4,495,120 (76.04% of earnings). Similarly, one of the biggest art collector on the platform, 3FMusic , invested $5,835,379 in 316 art works from 210 artists, focusing much of their portfolio on repeated investment worth $3,106,445 (53.2%) for 155 (49.05%) artworks from 49 (23%) artists. This indicates that collectors tend to specialize on a small group of preferred artists, spending more than half of their total budget on them, at the cost of limiting the diversity of their collection.

These results highlight that artist–collector ties play a crucial role in the earnings of an artist, suggesting that the success for NFT artists rests on their ability to build relationship with collectors that are willing to repeatedly purchase art from them, rather than attracting new collectors. These strong artist–collector bonds are similar to the collection patterns observed in the classical art world, where collectors often focus on a few artists. The evidence of such close ties between artists, collectors, and artworks prompts us to systematically map out the co-bidding networks that define success in crypto art (Fig.  5 A), resulting in three maps capturing the collector network, the art network, and the artist network.

Co-bidding networks. ( A ) Schematic description of various co-bidding networks based on NFT transactions extracted from the data, capturing how a collector \(C_1\) bids on an NFT \(N_1\) created by artist \(A_1\) . As collectors can bid on multiple artworks, we use these joint bids to reconstruct the collector–collector, NFT–NFT and artist–artist networks. ( B ) The collector network has collectors as nodes and their joint NFT bids as links. The nodes are sized based on maximum investment and the top 10 collectors are highlighted while other collectors are colored in pink. ( C ) The distribution of edge weights, representing competition, follows a power law decay \(P(w_{collector}) \propto w_{collector}^{-\beta _{collector}}\) with exponent \(\beta _{collector} = 3.7\) , measured using plfit 31 . ( D ) The association of maximum bidding amount and degree, finding that highly connected collectors make higher bids. ( E ) The NFT network, where a node is an NFT, connected if the same collector has bid on both the NFTs. The node sizes correspond to the selling price and the NFTs bid by the top 10 collectors are highlighted. ( F ) The distribution of link weights, representing collector similarity, follows a fat tail decay with exponent \(\beta _{NFT} = 3.4\) . ( G ) The association of connectivity and selling price, finding that central NFTs attract higher prices. ( H ) The artist network, whose nodes are artists and links correspond to joint collectors. The nodes sizes reflect the total earnings of the artist. We color the artists based on bids by top 10 collectors while the rest are colored pink, highlighting the stratification of artists among collectors. ( I ) The distribution of edge weights, representing similar collector interest, follows a fat tail decay with exponent \(\beta _{artist} = 3.9\) .

Co-bidding collector network

Collectors are connected to each other if they show common taste and collector philosophy, revealed by frequent joint bids on the same art. Such bidding wars define a co-bidding collector network, whose nodes are collectors and the weighted links between them corresponds to the number of times two collectors bid on the same artwork (Fig.  5 B). The resulting network has 7787 collectors as nodes and 20,417 weighted links with an average degree of 5.2. The collectors are fragmented into 2235 components, the largest component accumulating 5223 collectors (67.07%). The number of joint bids (edge weight) determines the competition (or rivalry) between the two collectors. We find that 54.98% of the links between collectors have weight larger than one, evidence of repeated common interests. Furthermore, we find that the link weights are well approximated by a heavy tailed distribution, \(P(w_{collector}) \propto w_{collector}^{-\beta _{collector}}\) , with exponent \(\beta _{collector} = 3.7\) , indicating the presence of remarkably strong links between some collectors, corresponding to over a hundred competing bids (Fig.  5 C). We observe the highest rivalry between collectors HypnoPizza and 3FMusic , who have bid against each other on 145 artworks. Finally, we find that having a higher degree in the collector network implies higher investment in art (Fig.  5 D), indicating that the buying power is concentrated on the few hubs of the collector network who tend to make considerable investments in cryptoart.

Co-bidding NFT network

The financial success of an NFT is partly determined by its visible features like style, design, content, attracting the interest of collectors with similar taste in art. To uncover potential NFT-NFT connections, we mapped out the co-bidding art network, whose nodes are artwork and a weighted link corresponds to the number of shared bidders (Fig.  5 E). The resulting network is particularly dense with 15,338 NFTs connected via 547,566 links corresponding to shared bids. We find that 82.4% of the NFTs are part of a giant component. The link weights are well approximated by a heavy tailed distribution, \(P(w_{NFT}) \propto w_{NFT}^{-\beta _{NFT}}\) , with exponent \(\beta _{NFT} = 3.4\) (Fig.  5 F), again evidence of very strong links between few artworks. We find once again that the centrality of an NFT in this network, as captured by its degree, is strongly associated with its selling price (Fig.  5 G).

Co-bidding artist network

Two artists are connected if collectors show simultaneous interest in the work of both artists. Such repeated links may indicate formal, conceptual or stylistic similarities between the two artist’s work. We therefore reconstructed the co-bidding artist network, whose nodes are artists and the weighted links represent the number of shared collectors (Fig.  5 H). The resulting network of 6126 artist ties has an average degree of 91.97. The network has a giant component, consisting of 82.35% of the nodes. The edge weight, capturing the strength of common interest by collectors, follows a fat tailed decay, \(P(w_{artist}) \propto w_{artist}^{-\beta _{artist}}\) , well approximated by a power law with decay exponent \(\beta _{artist} = 3.9\) (Fig.  5 I). The artists zawada and PaulSnijder appear to have the highest weight link between them, having received bids from the same 833 collectors for 36 artworks. We find that the degree of an artist in the artist network shows a strong correlation with the artist’s earnings: hub artists earn more for their art (Fig.  5 J) than the more peripheral artists.

Summary and discussion

While the traditional art space is at best opaque, as prices and even the act of a sale is often shrouded in secrecy, the transparent nature of cryptoart offers a historical opportunity to quantify and understand the processes that determine success in the art space. Taking advantage of this open data, here we mapped out the history of a prominent NFT marketplace, the Foundation platform. The data allowed us to explore the auction dynamics, artist–collector ties, and co-bidding networks within this self-contained crypto art ecosystem. We find strong evidence of first movers’ advantage, in that innovators and early majority artists had higher earning than the latecomers, and collectors who joined early have also been more engaged, spending more on art.

Examining the career of artists, we find that the price of artworks remains comparable throughout an artist’s career and its range defines the artist’s reputation and popularity. Yet, there are significant fluctuations in art prices for the same artist, a striking contrast to the patterns seen in the classical art world where the price of seasoned artists increases as they gain visibility, and price drops are avoided by galleries. We classify the reputation of artists into low, medium, and high categories based on the maximum price of the sold artwork, finding that high quality artists repeatedly attract high prices for their works, evidence of persistent market-driven reputation effects.

Just like in the classical art space, we find that artist–collector bonds play an important role. Indeed, collectors tend to develop a unique taste in digital art, prompting them to make repeated purchases from a small group of artists. Consequently, the earnings of high reputation artists is ensured by multiple, disproportionate investments by a small group of collectors. In contrast, low reputation artists struggle to attract a sustained collector group, leading to low, uniform investments from several collectors. In other words, the careers of successful artists is built by attracting collectors willing to make repeated investment in their art, rather than appealing to the larger set of collectors investing in crypto art. We show that links between collectors, art, and artists affect the price of art, finding that the value of NFTs is driven by strong network effects between artists and collectors.

Our work also identified important avenues for future research. For example, many important quantities, like the number of on- and off-platform followers, are not encoded in the block chain, but are stored on the Foundation platform, hence we are unable to reconstruct their temporal evolution. For example, we do not know when a collector starts following an artist. The lack of such temporal information limits our ability to unveil causal effects, like the potential causal impact of rich artist groups on the performance of new artists, or how the number of in-platform followers drives art valuation. For such studies to be possible, either the platforms need to supply temporal information for research purposes, or the research community must launch a temporal observatory that monitors all the platform variables in real time.

It wasn’t until a few months ago that the use of NFTs to share, collect, and trade art became a mainstream phenomenon. The coming years, relying on data transparency of the sector, will help explain the influence of NFTs in shaping culture and art, in the same way that physical art are deeply embedded in narrating historical events. As the system establishes itself as a powerful medium of artistic expression, teasing out the networks that drive art prices and artist success will be of the utmost importance.

In many ways, this and other similar works 10 , 12 , 13 , 21 are only the beginning of a larger research program needed to explain the multi-faceted impact of NFTs on art and society. Many pertinent questions remain to be addressed, like the difference between single versus multiple editions of the same artwork, the role of generative art, and most importantly, how NFT artists build a community of collectors, and how do these community effects shape the careers of an artist. The underlying reproducible patterns identified here, pertaining to artists, collectors, and bidding patterns, demonstrate how data and network science tools can help unveil the processes governing the emergence of the NFT ecosystem.

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Acknowledgements

We thank Foundation (foundation.app) for making the data accessible for research purposes. We also thank Luca Maria Aiello of University of Copenhagen for useful insights on data collection and Alice Grishchenko for help in designing the figures.

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All authors conceived and designed the experiments. K.V. conducted the data collection, analysis, and created the visualizations. K.V. and A.-L.B. wrote the manuscript. All authors reviewed the manuscript and offered comments.

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Vasan, K., Janosov, M. & Barabási, AL. Quantifying NFT-driven networks in crypto art. Sci Rep 12 , 2769 (2022). https://doi.org/10.1038/s41598-022-05146-6

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NFTs are not just for digital art—and their popularity is growing

Now the economist is experimenting with an nft, to raise money for a good cause.

O NE CANDIDATE for the Oxford English Dictionary’s “Word of the Year” for 2021 will surely be “NFT”. Non-fungible tokens —cryptocurrency chits which represent digital images or videos—have been around since 2014, but they took off in popularity in March this year when Christie’s, a British auction house, sold an NFT of “Everydays—The First 5,000 Days”, a work of art by Mike Winkelmann, for a cool $69m. Now The Economist is getting in on the act. On October 25th we will auction off the cover of our issue from September 18th, which depicts Alice in Wonderland embarking on a journey into the world of decentralised finance (DeFi)—a world in which NFTs form part of the foundation of the digital economy.

An NFT proves the ownership and authenticity of a digital asset that is recorded on a blockchain. The auction will be held on Foundation, a platform for digital art, and will last for 24 hours. It is open to all. Proceeds from the sale, after auction fees, transaction costs and tax liabilities*, will go to The Economist Educational Foundation , an independent charity that helps students learn about current affairs. As well as raising money for a good cause, we hope that the auction will be educational, both for us and our readers. The world of DeFi has the potential to make economic activity more efficient, transparent and fair. But it also comes with risks.

The Economist ’s auction is a leap into a frothy market . The total value of NFTs issued on the Ethereum blockchain is $14.3bn, according to DappRadar, a blockchain research company. CryptoKitties, unique digital animals that can be bred and sold, were one of the first tokens to generate large volumes of activity. Dapper Labs, a gaming company that created CryptoKitties in 2017 along with several other NFTs, is now valued at $7.6bn, roughly the same as Lufthansa, an airline.

After the sale of “Everydays”, the use of NFTs for digital art was particularly frenzied. Blockchain-based art can help artists keep a larger share of their work’s value. In the physical world, it is difficult for creators to maintain a stake in re-sold versions of their work. But NFT creators can collect royalties on future transactions by baking it into the blockchain’s code.

Some doubt the true value of a NFT. To “own” one means having your ownership recorded on a digital ledger—nothing more. The image can still be copied and downloaded by other internet users. There are signs that the market is cooling off. Trading volumes for art NFTs have fallen from their peak of about $200m in March to less than $25m in July (see chart).

Still, the world of DeFi is beguiling and evolving. People are coming up with more and more uses for the tokens. San Marino, a small country in southern Europe, has approved the use of NFTs to issue digital covid vaccine passports. Some people are using virtual land NFTs which confer the right to build properties in different virtual worlds known as “metaverses”. Trading volumes of NFTs overall have remained steady, even as art trading has slumped. Come and join us down the rabbit hole. ■

Correction (October 24th 2021) : An earlier version of this article calculated the market capitalisation of NFTs including some tokens that are used in NFT applications, but are not themselves NFTs. This was incorrect. Sorry.

*The auction platform, Foundation, will keep 15% (including value-added taxes) of the total winning bid as a fee for providing the auction service. There is uncertainty concerning the indirect-tax liability on sales of NFTs. The Economist will withhold 16.67% funds from the winning bid in the event that the firm has to settle such liabilities. The result is that we expect 68.33% of the funds to be available to donate to TEEF. However, The Economist reserves the right to withhold additional funds from the proceeds in order to meet its indirect tax liabilities in respect of the sale of the NFT, if it is required to pay such taxes by law in any country. The Economist also reserves the right to deduct any transaction costs associated with issuing the NFT from the ultimate funds donated to TEEF.

The Terms of Service and Privacy Policy that apply to the Foundation platform are incorporated by reference into the sale process for the NFT. By participating in the auction, you agree to, and acknowledge, these terms.

The buyer of the NFT will have the right to use, publicly display and copy the NFT for personal, non-commercial use and the right to re-sell the NFT. The buyer of the NFT will have no right to license, commercially exploit or prepare derivative works of the NFT or the artwork therein (the exact scope the buyer’s rights are set out in the Terms of Service ). All copyright and other artistic rights in the NFT and the artwork therein are otherwise reserved by The Economist.

By purchasing the NFT, your capital is at risk. NFTs are volatile and can lose some or all of their value. NFT trading is complex. This NFT is not supervised by any regulator.

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Guest Essay

For $800, You Too Can Sort of Be In On This Joke

By Sophie Haigney

Ms. Haigney is a critic and journalist who writes about visual art, books and technology.

A few weeks ago, while browsing the internet, I came across a dark-blue rectangle for sale: “Monochrome Bleu Numérique.” I zoomed in, then out. I stared for long enough that I wondered whether it might have been a photograph of a photograph. A moment later it appeared to have a grainy texture, suggesting brush strokes on a canvas. But mostly it simply looked like a saturated, unnatural-seeming blue. This digital artwork, stored as a digital file, was for sale online when I first stumbled upon it for 0.3 Ether — the cryptocurrency for the blockchain platform Ethereum — worth more than $800, as of Tuesday night.

“Monochrome Bleu Numérique,” which was made by a Vienna-based artist who goes by the name Demian Thirst (he declined to provide his real name), is being sold as a “non-fungible token,” or NFT. NFTs are unique virtual certificates of sole ownership that serve as financial assets and can be attached to everything from famous online videos to a virtual three-course meal . Like an autograph on an otherwise one-in-a-million sports jersey, an NFT offers an assurance of authenticity.

This certificate of ownership is verified by blockchain technology — the decentralized public ledgers that record all the financial transactions of participants in the network, somewhat like a massive Google Doc or Google spreadsheet. In 2021, fueled by rising cryptocurrency prices, NFTs have captured the imagination — and bemused ire — of both the art world and the general public.

Somewhat puzzlingly, owning an NFT doesn’t mean that you own the given image or thing to which it’s connected, or own the copyright to it. Many NFTs can be downloaded, duplicated, “screenshotted” or simply found elsewhere on the internet.

Buying an NFT, then, is not so much about buying something as it is buying the concept of owning a thing — which feels like the logical endpoint of a society obsessed with property rights, and finding new ways to buy and sell almost anything.

So it’s natural that online opinion and news headlines have been incredulous: Someone paid more than $69 million at auction for a JPG image that you could simply download on the internet? A New York Times column that was turned into an NFT sold for more than half a million dollars ? Why would someone pay $500,000 for a digital house ? (There is a special absurdity to a house you can’t inhabit that’s worth more than most houses).

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Articles on NFTs

Displaying 1 - 20 of 36 articles.

Bitcoin: four reasons why the price should surge in 2024

Andrew Urquhart , University of Reading and Hossein Jahanshahloo , Cardiff University

Are NFTs really dead and buried? All signs point to ‘yes’

John Hawkins , University of Canberra

Five emerging trends that could change our lives online

Theo Tzanidis , University of the West of Scotland

NFTs in the art world: A revolution or ripoff?

Nathalie Casemajor , Institut national de la recherche scientifique (INRS)

3 ways cryptocurrency is changing the way colleges do business with students and donors

Nir Kshetri , University of North Carolina – Greensboro

From GameStop to crypto: how to protect yourself from meme stock mania

Larisa Yarovaya , University of Southampton

Investing in crypto-assets : How to limit the risk of being exposed to fraud

Annie Lecompte , Université du Québec à Montréal (UQAM)

How we describe the metaverse makes a difference – today’s words could shape tomorrow’s reality and who benefits from it

Tom Boellstorff , University of California, Irvine

New rules for crypto assets will protect consumers and innovators

Aaron M. Lane , RMIT University

NFTs: how top brands like Nike and Prada are using them – and what could go wrong

Achilleas Boukis , University of Birmingham

What is the metaverse, and what can we do there?

Adrian Ma , Toronto Metropolitan University

Cryptocurrency price collapse offers hope for slowing climate change – here’s how

Peter Howson , Northumbria University, Newcastle

Curious Kids: what are NFTs – and why are they so expensive?

Francesc Rodriguez-Tous , City, University of London

Can you truly own anything in the metaverse? A law professor explains how blockchains and NFTs don’t protect virtual property

João Marinotti , Indiana University

Behind the crypto hype is an ideology of social change

Rick Wash , Michigan State University

NFTs: one year after Beeple sale, non-fungible tokens have become mainstream

Paul Dylan-Ennis, University College Dublin

Super Bowl ads turn up the volume on cryptocurrency buzz: 6 essential reads about digital money and the promise of blockchain

Eric Smalley , The Conversation

NFTs: WWF tried raising money with digital art but backtracked – environmental charities should follow suit

Cryptocurrency, NFTs and the metaverse threaten an environmental nightmare – here’s how to avoid it

Iwa Salami , University of East London

Why are people calling Bitcoin a religion?

Joseph P. Laycock , Texas State University

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Historic Sites in Nizhny Novgorod, Russia

Nizhny novgorod historic sites.

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1. Boat Hero

2. Clock Tower

3. Gruzovoy Avtomobil GAZ - AA

4. The Estate of M. N. Shhelokov

5. Revenue House of N.A. Bugrov

6. Nizhegorodsky Ostrog

7. Presences

8. House D.V. Sirotkina With the Old Believer House Church

9. Women's Diocesan School

10. House of the Shipping Company Kavkaz and Mercury

11. Tombstone of K. Minin

12. Mariinsky Institute for Noble Maidens

13. Nazarevsky shelter

14. Memorial plaque to R. Vagapov

15. Bank office - Kremlin police station

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Nizhny Novgorod: A ‘Russian Detroit’ from 19th to 21st centuries (PHOTOS)

Dmitrievskaya Tower through the centuries.

Founded in 1221, Nizhny Novgorod (260 miles east of Moscow) is still one of the most visited and populated Russian cities (it has more than 1.2 million inhabitants). Its ancient kremlin, cozy paved streets with centuries-old buildings (a regular city plan was adopted after Empress Cathrine the Great visited the city in 1767) and scenic views of the Volga River warm the hearts of locals and tourists. By the way, many people confuse it with Veliky Novgorod (established in 859) in the north-west of Russia. In Russian, the word ‘Novgorod’ literally means “new city” and, luckily, there are only two in the whole country: ‘Lower new city’ and ‘Great new city’. One of the oldest and largest automobile plants that produces GAZ cars is still located in Nizhny (Russians often omit ‘Novgorod’) - and that’s why the city is often known as the ‘Russian Detroit’. In Soviet times, it bore the name of main Soviet writer Maxim Gorky , who was born there.

And despite its steel and metal history, today, Nizhny Novgorod has the poetic epithet of the capital of sunsets. We compared some vintage and recent photos of the city.

Dmitrievskaya Tower in 1913 and in 2021.

The stone citadel of Nizhny Novgorod was built in the 16th century around the Chasovaya (Sentry) Hill. Here is the most famous view of the fortress with the Dmitrievskaya Tower. Previously, a moat was dug in front of the tower, which was filled with water. At the end of the 18th century, the moat was filled and the tower sunk about 6 meters into the ground. The tower received its a-la Rus facade only at the end of the 19th century. 

2. National Unity Square 

Skoba square, 1957 / Monument to Minin and Pozharsky nowadays.

On Moscow’s Red Square, there is a monument to Minin and Pozharsky , who were the leaders of the people’s militia against the Polish intervention of 1611. Interestingly, exactly the same monument stands in Nizhny Novgorod! And all because the militia gathered there. City official Kuzma Minin called on all residents to fight and Prince Dmitry Pozharsky was chosen as the militia head. The date of Moscow’s liberation from the Poles (November 4) has been celebrated as National Unity Day in Russia since 2005. In the same year, Nizhny Novgorod’s Skoba Square, where the militia gathered, was renamed ‘National Unity Square’ and a monument to the two national heroes was erected there, as well.

3. Chkalov staircase

View on Nizhny Novgorod kremlin, Dyatlov hills and Chkalov stairs, 1886 and now.

With 560 steps, these are some of the longest stairs in Russia! The site where this staircase was built was called the ‘Volga Downhill’ and was very popular among locals, since it had one of the most picturesque views of the Volga. The stairs, named after a pilot named Valery Chkalov, connect the upper and lower embankments in the historical center of Nizhny Novgorod. Among the architects was Lev Rudnev , who worked in the Stalinist Empire style and designed the Moscow State University and the Palace of Culture and Science in Warsaw.

4. Kremlin funicular

Kremlin funicular in operation... and in ruins.

Amazing: At the end of the 19th century, in the center of Nizhny Novgorod, two funiculars operated near the kremlin. They literally worked on water. Imagine a water tank in the car: filled at the upper station, empty at the lower station. When one car went down, the lower one went up under its gravity. They would move at the same time. The funiculars were abandoned in the 1920s, when a tram line was completed. Today, only ruins remain in place of the historical funiculars, although the city administration has already promised to recreate this type of transport. There still is one funicular operating in Nizhny Novgorod, which connects it with the city of Bor on the other side of the Volga River.

5. Bolshaya Pokrovskaya Street 

Bolshaya Pokrovskaya street in 1880s and 2021.

The main street of Nizhny Novgorod has undergone many changes over the centuries. Before the revolution of 1917, it was the favorite area of nobles to settle. Along the street, you can still see old stone mansions, theaters, churches. One of the most beautiful buildings is the main state bank built in Neo-Russian style. It was opened for the 300th anniversary of the Romanov house in 1913. At the beginning of the 20th century, a tram line passed there - one of the first in Russia. But, since the 1980s, the street has become pedestrian only.

6. Rozhdestvenskaya Street

Rozhdestvenskaya Street in 1890s and 2020.

A historical tram line has been preserved on the other oldest street, Rozhdestvenskaya. However, now it’s a tourist transport and it operates only in summer. The street has also preserved its appearance since pre-revolutionary times. There, you can see almost all the same buildings that were in Tsarist Russia, including the Stroganov and Golitsyn estates, the Church of the Nativity of the Blessed Virgin Mary and Blinov Passage - the first shopping center outside of Moscow and St. Petersburg.

Construction of the Burevestnik station, 1996 / Burevestnik station, 2009.

Nizhny Novgorod is one of the seven Russian cities with its own underground transport. The metro here was opened in 1985: In Soviet times, only cities with the population over 1 million residents had a subway. It consists of only two lines and sees about 115,000 commuters a day, which makes it less popular than ground transports. In the near future, there are plans to build new stations on the other side of the Oka River.

8. Referees Tower

Before and after restoration, 2021.

The Referees Tower built in the Neo-constructivist style on the embankment of the Grebnoy Canal was built in 1988 for the 2nd All-Union Youth Rowing Games. Over time, it was severely destroyed and only recently restored, for the 800th anniversary of the city. Of course, with cafes and places to relax. It’s beautiful, isn’t it?

9. GAZ automobile plant

The first car assembly plant, 1930 / Gorky Automobile Plant, 2021.

The GAZ (Gorky Automobile Plant) plant in Nizhny Novgorod became one of the first in Russia. Early models of trucks and passenger cars were produced under a Ford license. In the 1920s-1930s, American specialists also helped to build the plant itself and the socialist city for workers In the post-war years, the ‘Volga’ and ‘Chaika’ cars were the most expensive among Soviet cars - a citizen’s dream! These days, the plant still operates, but produces mainly trucks and minibuses.

10. Alexander Nevsky Cathedral 

High water in Nizhny Novgorod, 1890s/ The same district nowadays.

The Cathedral Church of Nizhny Novgorod is located in one of the most picturesque places of the city - on the arrow of the Volga and the Oka rivers. People used to call it ‘fair church’, since its parishioners were merchants who came to fairs from all over the country. It also was only open in the summertime. In the Soviet years, the iconostasis was dismantled for firewood to heat houses and then it was even planned to demolish it altogether and build a lighthouse and a monument to Lenin on the same site. Nevertheless, the cathedral was preserved (in the 1980s, it was restored by volunteers) and, in 2009, was reinstated as the city’s main church.

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