The Guardian view on cryptoart: caution is necessary
NFTs – non-fungible tokens – are being grandly hyped in the art market. There were headlines globally when a digital artwork by Beeple (real name Mike Winkelmann) was sold by Christie’s in March for $69.3m, along with an NFT – effectively a token proving ownership, which is stored on a blockchain. Blockchains, unalterable and unhackable “digital ledgers” that are also used to store the ownership records of cryptocurrencies like bitcoin, are seen as a solution to the problem of how to own, buy and sell digital art – by its nature reproducible and plentiful rather than rare and precious, qualities that traditionally add value to a physical artwork. When a buyer purchases an NFT on the cryptoart market, they purchase something akin to a certificate of authenticity; it is this, not the work itself, that is the rare and precious thing, rather as if they were buying a signature instead of a painting. The image itself may still circulate widely.
Debate rages about NFTs’ surging popularity (Sotheby’s is getting in on the act too, holding a “curated NFT sale” in New York next month). On the one hand, they are seen as indicating a route towards a sustainable income that has so far proved elusive for many digital artists. Use of blockchain technologies ideally cuts out the art world’s middlemen and traditional, often highly excluding structures; offers artists a direct route to buyers; ensures transparent records of ownership history; and improves artists’ resale rights. It is a utopian vision rather like that offered by the early proponents of cryptocurrencies, who have argued that blockchain technology, by removing the need for banking institutions, is fairer for those traditionally underserved by centralised systems.
However, there is also scepticism. Blockchain technology is itself far from politically and morally neutral, being governed by its own techno-libertarian underpinnings. And, crucially, artists rightly worry about the vast quantities of energy required to produce NFTs, a result of “mining”, the energy-gobbling process by which the network is secured. The context is pressure on the globalised art world’s environmentally damaging practices in general, whereby – at least before the pandemic – a significant proportion of its personnel would have been found on planes whizzing between meetings and shows, with artworks similarly in transit from fair to exhibition to biennial to collector. NFTs initially seemed to indicate a more environmentally friendly means for work to circulate, digitally instead of physically. Artists, however, have recently been disabusing themselves of this notion. One calculated that releasing six works of cryptoart consumed as much electricity in 10 seconds as their entire studio did for two years.
Ethereum, the second-largest cryptocurrency after bitcoin, has said that it is months away from shifting its underlying technology to a fresh model that would reduce its carbon emissions a hundredfold. Equally, the problem may be solved on its own. The current art world obsession with NFTs is inextricably linked to the recent enthusiasm for cryptocurrencies – which this week took a huge tumble, in part because of concerns over their environmental footprint. At the moment, at least, it is too soon to tell whether the cryptoart market is part of the future, the latest art world fad – or just a speculative bubble.