A digital artwork sold for nearly $70 million at Christie’s on Thursday, in the first-ever sale by a major auction house of a work of art that does not exist in physical form.
“Everydays – The First 5000 Days” is a digital artwork by American artist Mike Winkelmann, known as Beeple. It is a collage of 5,000 individual images, which were made one a day for over thirteen years.
The work’s sale for $69,346,250 placed Beeple among the top three most valuable living artists, Christie’s said in a tweet.
The work comes in the form of a new type of digital asset – a non-fungible token (NFT) – that is, it is authenticated by the blockchain, which certifies its originality and ownership.
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The NFT market has skyrocketed in recent months, with enthusiasts and investors using their spare savings to purchase items that exist online. Last month, a 10-second music video featuring an image of a deposed Donald Trump, also from Beeple, sold for $6.6 million on an NFT marketplace called Nifty Gateway.
“Without NFTs, there was simply no legitimate way to collect digital art,” said Beeple, who creates irreverent digital art on themes including technology, wealth and American politics.
When asked what he thought of the multi-million dollar offers on his work, the 39-year-old graphic designer, who has created concert visuals for Justin Bieber, One Direction and Katy Perry, said he was at a loss for words.
“I don’t know…maybe you can put an emoji in the story,” he said. “It’s so crazy.”
For NFTs, the artist’s royalties are locked into the contract: Beeple receives 10% each time the NFT changes hands after the initial sale.
“I really think this is going to be considered the next chapter in art history,” Beeple said.
Various digital items can be minted as NFTs and traded as assets, including works of art, sports collectibles, plots of land in virtual worlds, cryptocurrency wallet names, and even tweets. Twitter Inc boss Jack Dorsey is hosting a digital auction of his very first tweet, in NFT form.
Art NFTs account for about a quarter of all-time NFT sales volume ($415 million) according to NonFungibles.comwhich aggregates sales history data for the Ethereum blockchain, the most common ledger used to record these types of assets.
The musicians are also getting into the hype, with American rock band King’s of Leon having released an album as NFT.
Beeple says the explosion of NFTs is partly due to the increase in time people are spending online during the pandemic. Like many enthusiasts, he also believes they could represent the future of ownership.
“Stocks have been the predominant asset class for the past hundred years, or whatever. I don’t think it’s guaranteed that it will always stay that way. I think kids today hate corporations… So the idea that they’re going to automatically blindly give them their money to invest, I don’t know,” Beeple said.
But, as with many new niche investing areas, there is a risk of losses if the hype wears off. Many NFTs will eventually become worthless, Beeple added.
While NFTs can function as a legally enforceable contract, they also raise insurance, tax, and intellectual property issues, said Max Dilendorf, a cryptocurrency attorney and partner at the firm. Dilendorf lawyers in New York.
“If you’re a buyer of an expensive piece of NFT, you need to know what features and conditions you’re subject to,” he said.
“In my experience, NFT market participants don’t really think about it carefully.”
Dilendorf said he expects the entire physical art market to be digitized in NFT form within the next five years.
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