It is the images of monkeys in comic book design or rough pixel punks that have taken the art market by storm in recent months. Digital works of art that have skyrocketed in price, sold for millions of euros online. We are talking about NFTs.
The abbreviation NFT stands for non-fungible token. These are non-replaceable, uniquely assigned, tamper-proof, and one-of-a-kind digital works of art via the blockchain. And that is exactly what can and will change the art market forever, says Jacob Pabst, CEO of Artnet.
Artnet is a publicly traded online art dealer with international operations based in Berlin and New York. The company was founded in 1989 by art dealer Hans Neuendorf, father of current CEO Jacob Pabst. The family feels at home on the creative scene, Pabst himself being the godson of the late fashion designer Karl Lagerfeld. For example, Artnet also works with the renowned and traditional auction house Sotheby’s. The CEO believes in the potential of NFTs.
Vincent van Gogh with frog face
Pabst doesn’t think NFTs will overtake the traditional art market, but they will play a “very important role” in the future. So it stands to reason that Artnet would want a piece of the NFT pie. “It was clear to us that we, as an online art marketplace, had to become active in the area of NFT,” says Pabst.
That’s why his company is also hosting an auction with NFTs dedicated to one theme these days: Pepe the Frog (German: Pepe the Frog). This cartoon frog became known primarily as an internet meme. In the auction you will find several NFTs that, one could say, radiate a lot of creativity. Until now, most of the offers have been for an image that shows trading cards with frogs. The current price is around 550 ethers, which is equivalent to about 1.4 million euros.
Why does the art expert believe in crypto art? With NFTs, Pabst sees an opportunity to solve previous problems in the art scene in the Internet age: “The whole field of digital art has never developed as expected,” Pabst says in an interview with Business Insider.
There are many problems, especially regarding copyright issues. Selling digital images online and making sure they are not fake and genuinely unique has been the biggest challenge. With NFTs, which are unique and counterfeit-proof, there is now a solution.
“For artists, NFTs will be essential in the 21st century”
But the advantage of NFTs is not only that authenticity can be guaranteed. Artists could also benefit financially if their works were resold.
An example: An artist sells her painting for about 10,000 euros. So this painting is resold for 30,000 euros. The artist earns nothing from the second sale of traditional art. If this artwork becomes an NFT, the artist can automatically participate in more sales with each resale using blockchain tracking. On the one hand, trading on the black market may be more difficult, on the other hand, artists and their groups may make money from resales. Especially if the work is to become a huge success at a later date.
NFTs are not yet very important for the art market, says Pabst. There are only a few known traditional artists who have also created NFTs. “Most of the art scene hasn’t dealt with that yet.” But as for the advantages, this will change, says the art expert. He believes that “for artists, NFTs will be essential in the 21st century.”
But it is not easy for NFT fans. Because these days, the whole scene around crypto art is often smiled at, says Pabst. “The art market often looks down on NFTs.” In the eyes of the classical scene, NFT artists are not perceived as “real” artists. “And of course the NFT community picks up on that and doesn’t find it funny at all.” This also worries crypto artists, who crave recognition.
“Arrogance is usually a sign of insecurity”
Where does this vision of the classical art scene come from? “In general, the art market is lagging behind. That’s often the case,” says Pabst. The whole scene still does not see the great opportunities that NFTs bring. As for new products, the art market is also “arrogant”, says the CEO of Artnet and notes: “Arrogance is often a sign of insecurity”.
Also, NFT artists are ridiculed because they are not traditional artists who paint their pictures with brushes and oils, for example. “I can understand that many people see a Picasso as ‘real’ art, but NFTs don’t,” says Pabst. This is generally an “old discussion” that constantly takes place in the art market.
“Why is a work of art worth so much? And people often say: Yes, I can do much better by myself,” says art expert Pabst. But the classic economic rules also apply in the art scene: “Art is still based on supply and demand. It is a collector’s item and uniqueness has its price”. If there is someone who is willing to pay a certain price, then he is “completely fine”.
It is also not clear to some people how a digital image of a frog can cost around 1.4 million euros. But the same thing happens here: if there is someone who wants to pay more than a million, that is also the price of art.
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