Crypto art is an emerging market that revolves around digital artworks traded on blockchains as non-fungible tokens (NFTs). Each piece of crypto art is unique and represented by an NFT with its own value.
Blockchain and Crypto Art
Bitcoin promised to challenge the traditional financial market, but what about fine art? Can there be any connection between digital currencies and art?
Well, blockchain might be the ideal technology for a digital money system like Bitcoin, but it turns out it is universal in terms of use cases. This technology is like a Lego – individuals and businesses use their creativity to build different products, services, and tools for today’s world.
One of the most interesting applications of blockchain is art.
There are two ways in which blockchain and art can interfere:
- The technology can be used to register and authenticate existing physical artwork like paintings and sculptures. This can be done through a process called tokenization, usually to prevent forgeries and track the ownership of the artwork. In this case, the process is the same as tokenizing real estate or diamonds, for example. It’s still not clear whether such artwork can be regarded as crypto art, so we’re not referring to this in the present article.
- Another great symbiosis between art and blockchain is the digital artwork that is registered directly onto a public or private blockchain. In this case, each artwork is represented by a unique non-fungible token (NFT). This makes the ownership and sale of artwork possible in a decentralized environment.
What Are Non-Fungible Tokens?
At this point, you’re probably wondering what NFTs are. NFTs are a special category of blockchain-based tokens that represent something scarce and unique.
Unlike fungible digital currencies like Monero, NFTs are not mutually interchangeable. For example, we really don’t care what particular monero unit we hold in our wallet since all coins have the same value. We don’t make any distinction between two monero.
NFTs are different in the sense that each token is unique and has its own value, even though they have the same technical structure and reside on the same blockchain.
NFTs have reached wider recognition in 2017 thanks to CryptoKitties, a popular blockchain collectible game where each token represents a virtual cat with unique identifiers. Users can buy, collect, breed, donate, and sell the cats. Some kitties were sold for hundreds of thousands of US dollars in ether.
Back to our topic: the crypto art is relying on these NFTs, which are usually issued on Ethereum using the ERC-721 standard, as opposed to the common ERC-20 standard used by most tokens out there. There are specialized marketplaces where the NFT-based artwork is exhibited and traded.
The Crypto Art Market Size
DeFi is regarded as the fastest-growing sector within the blockchain space, but crypto art is a worthy competitor.
According to data from CryptoArt.io (yes – there’s a Coinmarketcap-like website for the crypto art sector), the total value of the market is almost $90 million, with more than 67 thousand artworks sold to date.
CryptoArt also monitors the most successful crypto artists.
So far, the biggest blockchain-based artwork trade to date took place in December of last year. The artist nicknamed Beeple sold a collection of 20 artworks to Tim Kang for a staggering $777,777. The digital artist produces video content and concert visuals for celebrities like Eminem and Nicki Minaj and is currently the most popular crypto artist. Beeple, whose real name is Mike Winkelmann, has sold over 800 artworks for more than $9 million in total.
On February 3, 2021, a Twitter user named Danny said that he paid 420 ETH for a demonic NFT artwork known as a Hashmask. The trade was carried out on the OpenSea platform and cost the equivalent of about $650,000 at the time of purchase. The Hashmasks is a platform run by Swiss-based Suum Cuique Labs, which hosts a collection of more than 16,000 unique digital portraits created by over 70 artists.
All in all, the market has more than tripled in the first weeks of 2021, which is partly due to a surge in the ETH price. Nevertheless, there is an increased interest in NFT artworks.
Ethernity, a new NFT art project backed by Gemini bosses Cameron and Tyler Winklevoss, has announced that it would auction off digital artworks backed by celebrities. A portion of the accumulated funds will go to charities picked by the…
