The blockchain disruption

Last March, Christie’s organised an auction of a collage of 5,000 digital images titled Everydays: The First 5000 Days by digital artist Mike Winkelmann, aka Beeple. The digital art piece sold for US$69 million (2.2 billion baht).

“This year, the world’s top auction houses such as Christie’s, Sotheby’s and Phillips held auctions for NFT [Non-fungible token] crypto art which helped make crypto art more recognisable,” said Watjanasin Charuwattanakitti, owner of Palette Artspace.

Watjanasin first became interested in the NFT crypto art market when the painting Morons by celebrated British street artist Banksy was burnt and was later uploaded as NFT crypto art. The burning aimed to make Morons an exclusive NFT crypto art piece.

“News reports regarding NFT crypto art also triggered public attention from the market. I am a gamer and card collector, so I am open to NFT crypto art and purchase artworks that I can afford,” Watjanasin added.

Today artworks are not limited to physical forms. Although it is a relatively new concept, NFT crypto art is a market that has grown rapidly. According to Markets Insider, the NFT crypto art market was worth $52 million last year. In April, the market swelled by more than 800% and is now worth about $490 million.

An NFT is a unique token and cannot be replaced by other tokens. NFT crypto art is a digital art asset established on a blockchain — a digital ledger of transactions that are unchangeable and permanent.

Eddie Paradorn, founder of the NFT and Crypto Art Thailand group and an investor and NFT collector, explained that blockchain is a unique system because its data is saved and distributed to many nodes or servers around the world.

“Data on blockchain is not saved on only one server. NFT crypto art is digital artwork on blockchain. I once wanted to be an artist, but I could not make a living from it. When I saw NFT crypto art at affordable prices, I decided to purchase them. Due to the blockchain technology, I can own digital art, which are transferred from artists and collected in my crypto wallet,” said Eddie.

Apart from news articles that attract people to NFT crypto art market, Eddie said there are other factors that help expand the NFT crypto art market. One factor is the growth of crypto wallets, especially Metamark. Last year, Metamark had 1 million users and topped 5 million by April.

“Purchasing and selling NFT crypto art requires knowledge of crypto currency such as Bitcoin, Ethereum and Dogecoin as well as having a crypto wallet. Since millions of people registered for crypto wallets, more buyers and sellers have entered the NFT crypto art market,” Eddie said.

“The Covid-19 pandemic is another factor that has expanded the NFT crypto art market. During lockdowns in many countries, artists cannot exhibit their works at galleries, so they had to look for alternatives to exhibit and sell their artworks,” said Eddie.

The Metamark wallet and the crypto currency Ethereum are most used by Thai artists and collectors because Metamark and Ethereum can be used at three popular market digital marketplaces: opensea.io, foundation.app and rarible.com. Opensea is the most popular NFT crypto art marketplace because anyone can be a creator there.

“At Opensea, after paying an initial fee, users can post their works without an additional payment. Opensea provides various types of products such as art, music, virtual world, trading card and sports. Even though it offers various items, some collectors do not like it because the lack of screening makes the quality of the artworks and items on Opensea varied,” said Eddie.

“Hence, Foundation is a goal for many Thai artists. To enter Foundation, artists must be invited by other artists who also were invited and can sell their artwork. Artworks on Foundation are of higher quality than on Opensea. Rarible is a cool and modern design platform. Artists in Rarible must verify themselves if they are the real creators. The verified artists are granted verified checkmarks,” Eddie said.

Three months ago, established Thai artist Kiatanan Iamchan, aka Line Censor, became a creator on Opensea where he listed his NFT crypto artworks for about 8,000 baht. In June, one of his artworks, Chaos, was purchased on Foundation by a collector for one Ethereum, or 62,300 baht, and is currently listed at 35 Ethereums or 2.2 million baht. Kiatanan recently became a creator on superrare.com, another invite-only platform.

“I began to post my works on Opensea, but I was inspired by artists on SuperRare. Artworks by many artists on SuperRare, especially by the Korean artist Mr. Misan, are incredible. This ran counter from what I heard that some people look down on NFT crypto art as having no quality, but is expensive,” said Kiatanan.

Kiatanan has developed his paintings into short animation and sells them as NFT crypto art. The artist said NFT crypto art is not only about art, but also about marketing.

“An artist must be active on social networks. I’m active on Instagram and Facebook. I use Twitter to follow collectors and communicate with them. If artists post their works on platforms, but are not active on social media, they cannot be successful. I chatted with a collector who purchased Mr. Misan’s artworks via Twitter and he told me that my works are fantastic. He then purchased three of my artworks. I felt that I reached my goal because my works are in the same collection as the artist I admire,” said Kiatanan.

After purchasing a physical painting, collectors can keep the painting personally. However, viewers can see NFT crypto arts on various platforms. They even can save them on their devices. So why do collectors decide to pay for NFT crypto art? Watjanasin and Eddie said collectors are proud to be an owner of the token.

“An owner has a record of ownership that he/she can show to anyone to prove his/her ownership. Some people wonder why collectors pay so much money for NFT art. It is another kind of investment. A collector who purchased Beeple’s work at 2.2 billion baht may earn more than this in the future,” said Eddie.

NFT crypto art is an alternative for an artist to reach collectors. But will this new market affect art galleries? Watjanasin said not much because some collectors still like physical artwork and a gallery will remain an important place for artists to promote their work. Eddie believes that some galleries will have to adjust to the NFT market.

“Some collectors and investors learn that NFT crypto art’s price rate increases quickly and the artwork is permanent. It will not be damaged by disasters like a fire or a flood. It is easy to take care of. In the future, galleries will display NFT crypto art and sell them,” said Eddie.

Looking at market value, NFT crypto art seems attractive, but how promising will its future be?

Watjanasin said it is difficult to predict how this market will be in the future since the market has both art enthusiasts and investors. However, Kiatanan and Eddie agree the market for NFT crypto art will continue to grow.

“The number of users can increase. Aside from the art industry, NFT can expand to many other industries such as music, sports, gaming and collectable cards. It can be a limited edition of a music album or souvenir in NFT format. It depends on how creators expand their ideas from this technology,” Eddie said.