The truth about NFTs – Part III

The truth about NFTs and what we artist can learn from it - Part III

This is the third and last part of my NFT blog series. Part I was explaining what triggered the NFT hype and gave insights on how artists can be part of it. Part II gave insights into the benefits and downsides of NFTs. And this part will explore what NFTs will look like in the (near) future and what we can expect to happen next.

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What about my physical artwork and NFT, can I connect them?

The short answer is no or not yet at least. At this point, NFTs can only be attached to a digital asset and there are no ready-to-go solutions to link them to a physical object. What I have seen artist and galleries do is create a digital version of the physical artwork often adding new digital attributes such as animation or colour alteration to it. Some sell both physical and NFT together, some sell them separately or they destroy the physical artwork so only the digital NFT version remains. The fact is that none of the NFT platforms allow you to track NFT ownership through a physical object. 

However, if looking at other markets that already harnessed blockchain technology to their advantages we can see the possible solution strategies for the NFT art market. Recently the apparel and luxury brands took interest in blockchain too. Last year September, MCQ, a technology-driven label and platform by Alexander McQueen, launched their first blockchain-based collection. Using NFC labels (Near-field communication same technology that is used for contactless payments) MCQ enables people to interact with physical garments and claim ownership of it through a blockchain. Additionally by entering the labels native digital platform MYMCQ  consumers can see historical information of a garment, access behind-the-scenes content such as interviews with collaborators and other creatives. 

Maybe this is the solution the art world is looking for. We could connect the physical and digital identities of an artwork by incorporating NFC, QR codes or other smart labels/tags on the physical object. To identify the ownership of a physical artwork we would simply need to scan the smart label and instantly directed to its NFT counterpart on our mobile phone. With this solution not only the ownership of an object could be recorded on the blockchain but also insights into the creation process, artists notes and even instruction for long time conservation. 

What does the future hold for us?

Well, I do not own a crystal ball but I have spent the last days reading plenty of articles on NFT and what will happen next. So here are some of my favourites. 

First, there will be a big market crash similar to the 90s internet bubble and the 80s baseball cards boom (if you’re too young to know what baseball cards are google it). The supporters of this theory argue that because the people aggressively mining as many NFTs as possible to cash in on the hype, the market will be shortly oversaturated and crash the moment the demand decreases. At the moment, the entire NFT market is extremely speculative and resemble the wild west moments of the internet. Additionally, as the NFT market is unregulated and without any quality control, many times buyers overestimate the worth of the NFT art they purchase. To quote NFT pioneer Beeple: “Things will have value, and a bunch of things will not have value. So again, that’s where people really need to get that just because something becomes an NFT does not magically give it more value.”  I guess there will be a lot of disappointments after the NFT bubble bursts.

The second theory, and one of my favourites, is that the NFT market will be dominated by Instagram one day. Thank god, another social media platform I could not handle. But here is the initial story: On March the 23rd, Nifty’s, Inc. announced the rapid development of the first NFT-focused social media platform that will bring together publishers, brands and creators with collectors, curators and fans. Wait, another social media platform and this time only for NFT art? Let’s be realistic here for a moment. Over the years, I heard, got advertised and invited to many ‘new trendy social media platform only for artist’ that will replace Instagram. How many of these I am using? None. And why should an artist start a new social media account after spending thousands of hours to grow his/her/theirs Instagram? Moreover, Instagram has already an enormous number of potential buyers who browse there every day. How many of these potential buyers do you think will go and create a new account just for NFTs? 

Instead, let me give you my vision of the future: You wake up, take your phone, look through all the overnight notifications from your friends and family, what else is there?, oh – look an artist you follow just dropped a new NFT, let’s check it out, nice, let me buy it, select payment: card, PayPal or Bitcoin, paid, post my new NFT #mynewnftart, done! Siiri, what is the weather forecast for today?  

Do you need any more convincing? You do? Okay, I’ve got one more. The billionaire Mark Cuban (who is also an investor of Nifty’s) reportedly is building a digital art gallery called lazy.com for NFT art only. The platform will allow users to show off their digital art and collectables and make it easy to share them on social media platforms. Yes, we could that, or we could directly save an NFT collection (something like a guide or saved folder) on Instagram. I’m sorry but I’m just a lazy millennial who wants everything to be in one place and quickly accessible as possible. 

Final words

Like any new technology, NFT can be scary and complicated at first but I am sure the technology will advance and find its integration into our existing online habits. Though one has to be careful and critical when dealing with it, trying to look beyond the hype and always remember that blockchain technology is only as strong as its weakest link. Once entered, false data will keep circulating so we need to be smart about it. 

Artists always stood at the frontier of new developments but we also need to stay tuned with what is best for our art. Simply following a trend and put a bad version of your artwork might not be the best option for your career. Adding a new fashionable feature to your art will not automatically increase the value of your art. This is something collectors and investors need to keep in mind as well. 

But it is also a great opportunity to change and democratise the market. In the future, not only visual but performance and video artist, musicians and sound designers, writers and poets, filmmakers and actors could use NFT and blockchain to monetise they art. The Best-case scenario is that we finally get a chance to apply the terms of the Artist’s Reserved Rights and Transfer Agreement which included more than 15 per cent royalties for secondary sales. It also stated how long royalties would last and what to do in case a gallery/dealer was involved in the initial sale (e.g. royalty commissions for the dealer). Moreover, it pointed out the artist rights for future exhibitions of the sold artwork, artist share in case of a rental, reproduction rights and consultation in case of repairs. 

All these things are still relevant today and maybe even more. During my search, I have seen many galleries selling art in the NFT market and I immediately wondered who will receive the future royalties of the NFT if any, the gallery, the artist or both? In theory, smart contracts can be programmed to include both artist and the gallery/dealer royalty. But I have not seen a real-life case yet. It is important to incorporate galleries and art consultants as they give insights and value to the art market even though there are many black sheep out there. To know our rights as artists we need to understand the technology and take part in the conversation as it is our future that is in question here. 

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