Will NFTs Revolutionize the Art Market or Repeat Its Greatest Failures? These 4 Factors Will Determine Their Fate | Artnet News

How the market addresses these four issues will determine whether NFTs become part of generational progress, or sink into familiar contours.
— Read on news.artnet.com/market/nft-revolution-four-factors-1950645

NTFs on WIKI:

A non-fungible token (NFT) is a special type of cryptographic token that represents something unique. NFTs are called non-fungible because they are not mutually interchangeable,[1] since they contain unique information, although it is possible to mint any number of NFTs representing the same object. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens,[a] that are fungible in nature.[2]

Hashmask image 15753 (1 of 6,384), by “Suum Cuique Labs GmbH” sold with an NFT on the Ethereum blockchain

Non-fungible tokens[3] are used to create verifiable[how?] artificial scarcity in the digital domain, as well as digital ownership, and the possibility of asset interoperability across multiple platforms.[4] Although an artist can sell an NFT representing a work, the artist can still retain the copyright to the work represented by the NFT.[5] NFTs are used in several specific applications that require unique digital items like crypto art, digital collectibles, and online gaming.

Art was an early use case for NFTs, and blockchain technology in general, because of the purported ability of NFTs to provide proof of authenticity and ownership of digital art, a medium that was designed for ease of mass reproduction, and unauthorized distribution through the Internet.[6]

NFTs can also be used to represent in-game assets which are controlled by the user instead of the game developer.[7] NFTs allow assets to be traded on third-party marketplaces without permission from the game developer.

If you have even a single toenail touching this mortal coil, you’ve undoubtedly heard about NFTs (non-fungible tokens) and their potential to upend the art world as we know it. But trying to determine whether they will, let alone in what ways, demands doing what few buyers plunging into this emerging market want to do: dance with the devil in the details, starting from the foundation. 

It’s helpful to think of NFTs as crypto-collectibles: tradable digital assets (in both the coding and investing senses of “assets”) whose authenticity, identity, ownership history, and sales prices are all tracked on a blockchain. 

Like physical art and collectibles, NFTs are either unique or produced in limited editions. The “non-fungible” aspect comes from the fact that each NFT has a value independent of all others, including different editions of the same work, kind of like fine-art photographs or prints. “Token,” meanwhile, is a term of art for a unique alphanumeric code recorded on the blockchain. Like an inventory number or tracking code, the token locates the actual asset within a larger system.

That larger system, a blockchain, is essentially a database maintained by a distributed network of computers rather than a central authority such as a corporation or a government. The database consists of unalterable “blocks” of transactions, verified cooperatively by the network. The idea is that you can trust the system without having to trust any individual contributor.

Once data is “on-chain,” it cannot be deleted, and it can be reviewed forevermore by anyone with access privileges and enough technological know-how. This means each NFT’s scarcity and provenance are secure, which in turn amplifies demand, which in turn builds a more confident, more robust market than we’re used to seeing for digital artworks without blockchain backing.

Not so confusing, right? 

Like any other technology, however, NFTs are much more complex than a decent elevator pitch can make them sound. Digging into the fine print exposes new possibilities and old pitfalls that will define their future.

Given the “chain” analogies, it’s fitting that the four issues below are all interlinked. On one hand, this imbues every individual factor with transformative potential; on the other, it also means that permanently anchoring any one of them will make the rest harder to alter, too. What happens from here will determine whether NFTs become a vehicle for generational progress in the art industry, or just another bubble with all-too-familiar contours.



Addie Wagenknecht, Sext (2019). Courtesy of the artist.

1. The Power of Gatekeepers

The Old Art World’s Problem:

People and institutions with long histories, fat pockets, and/or pre-existing industry connections wield enormous influence over who gets to participate in a fundamentally hierarchical system.

The NFT Difference:

New, decentralized marketplaces can welcome artists and buyers independent of the art establishment’s approval. While some NFT platforms (such as SuperRare and Nifty Gateway) will currently only accept artists by invitation or application, others (such as Rarible) allow any interested creator to start selling in their marketplace.

Ameer Suhayb Carter—an experienced designer and consultant in the crypto space gearing up to launch the Well Protocol, an NFT platform, archive, and support system with a special focus on BIPOC and LGBTQIA artists—represents the most revolutionary potential of the blockchain art space.

“In a lot of cases these are people who can’t even safely make work where they’re from. We’re giving voice to the voiceless,” Carter, who also works as an artist under the alias Sirsu, told Artnet News.

“The goal is to make sure they can build the communities they want to build as they see fit. I give them the tools to give them agency. I won’t build for you, I’ll build with you.”

The Roadblock to Revolution:

Yet decentralization is not always what it’s cracked up to be. As blockchain-fluent artist and developer Addie Wagenknecht told Artnet News: “The glitch is coming to terms with the mythology that distributed systems lead to disrupted power.” 

While the crypto economy thrives on utopian rhetoric about freedom and democratization, she noted, the underlying technology is complicated for a layperson to even understand, let alone use on their own.

“Instead, what we are seeing unfold in real time is that complexity makes the majority of people buying and selling NFTs dependent on platforms,” she said.

Those platforms vastly simplify the process for users, but extract concessions—sometimes significant ones—in exchange.

“We have seen this a million times before,” Wagenknecht continued. “Facebook won because learning to host your own sites, chat clients, and blogs was too much work. So what is happening is the same people who disrupted banking or technology or the web in the Valley are now claiming that they have changed the world again, when really it’s just the same people making the same stuff for the same people to get rich from.”

What to Watch:

What matters now is how much of the NFT market consolidates on the most prominent marketplaces, and how many grassroots platforms can emerge and sustain themselves.

“You can’t rely on the technology, and things built on this technology, to be inclusive,” Carter added. “It takes human work and active choice. What we’re going to do as a community, as an organization, is be on the lookout, assist, and uplift when we can.”



Beeple, Everydays – The First 5000 Days NFT, 21,069 pixels x 21,069 pixels (316,939,910 bytes). Image courtesy the artist and Christie’s.

2. The Values of Collectors