It’s time to separate NFTs from digital art

I had a realization recently while wandering through the Musée Matisse in Nice, France, where I went to see a temporary exhibit on David Hockney.

If you’re not familiar, Hockney is considered one of the most influential living British contemporary artists. His 1972 work “Portrait of an Artist (Pool with Two Figures)” sold at Christie’s auction house in 2018, breaking the auction house record of $90 million (a record broken the following year by Jeff Koons’ “Rabbit”, which sold for $91 million).

What fascinated me about the Hockney exhibition was not his paintings, although I think they are beautiful. What fascinated me the most was the fact that he started experimenting with a new art form at the age of 67 by learning Photoshop with his sister Margaret. Where most artists of that age would have stuck to what they knew best, Hockney’s curiosity drove him to try something new. In 2008, aged 71, Hockney got his first iPhone. By the following year, he had created over a thousand digital paintings with his thumb, and he is now a prolific digital artist. The exhibition I attended in Nice, “A Paradise Found”, featured a never-before-seen series of iPad flower paintings.

Wandering around the exhibit, I was struck by the following realization: The exhibit did not mention NFTs.

I’m so used to equating NFTs with digital art that I was almost shocked not to see a mention of NFTs. A missed opportunity for Hockney? Perhaps, although it is doubtful that the artist needs the additional income from selling these images as non-fungible tokens. In fact, Hockney has publicly criticized NFTs, calling them “silly little things.”

I’m actually glad Hockney hasn’t moved into this realm, and grateful for his faithful perspective. It serves as an important reminder: NFTs and digital art are not synonymous. In fact, it’s about time we start separating NFTs from digital art.

While digital art can certainly be made an NFT, ultimately NFTs are a much broader category than the one limited to art, and I think associating the two too closely does each a disservice.

Digital art is simply the latest development of people using tools at their disposal to create art. From drawing on cave walls, to using pen, paper and paint, to experimenting with technology to create new forms of art (an all-too-banal description of the evolution of art over time, I’m sorry), humans will always use the tools in front of them to to make art. This is because the process of creates is ultimately a fundamental part of what it means to be human.

While NFT collections feature digital art, I would argue that the emphasis of many NFT collections is not on the art itself, rather on the marketability of the art.

Art collecting versus art dealing

NFT collectors look at statistics such as floor price and the ratio of owner volume to supply volume to gather insights about circulation and potential resale value. The artist’s credibility and previous success of course also go a long way. To be clear, none of these things are crazy, nor are they just limited to the realm of digital art. But the point I’m making is that many NFT collections, as we think of them in common parlance, are as much art as they are finance.

The fact that I have more than one investment banker friend who spends his weekends shopping for JPEGs is an example. For them, it is a middle finger to a financial system that requires them to fit into a certain (quite square) way of operating. If they can make as much money flipping an NFT as they can working “for the man”, who can blame them?

From artist patrons to auction houses, the intermingling of the worlds of finance and art is nothing new, and is in many ways a relationship that is necessary. But the arrival of NFTs has also brought with it an excessive amount of carpetbagging and scams that have plagued the space, leaving it struggling for its credibility. It’s no wonder that some digital artists may purposely steer clear of space for fear of tarnishing their reputation.

More than just JPEGs

Digital art doesn’t have to be made into an NFT, and doing so can actually detract from the art itself (I’ll get to exceptions to this eventually). In the meantime, there are a number of alternative uses for NFTs that are fascinating and will no doubt change much of the way we operate. Here are some of them:

Ticket sales:

The ticketing industry as we know it today has been plagued by a myriad of challenges from counterfeiting and fraud to a lack of exchange protocols. Issuing event tickets as NFTs allows for easy distribution and instant verification. There is also the possibility of ongoing royalties from sales on secondary markets which can go directly to stakeholders, artists and event organisers. This piece on NFT tickets by BanklessDAO breaks the concept down well for the curious.

Music:

Before online streaming, most artists made money from physical music sales (97% of revenue back in 2001). While it expanded access and discovery for artists, streaming also destroyed the lack of music. NFTs bring some of this back through digital scarcity. Kings of Leon were the first band to release an album as an NFT (When You See Yourself) and earned $2MIL from sales.

Property:

NFTs have several use cases in real estate. First, they may represent a physical property being purchased. While much of this will depend on legal prerequisites being met in an evolving industry, the technology is already poised to make this a reality, and for good reason. By buying an apartment with NFT properties, you will get instant access to the entire history of the apartment, from previous buyers and investments to legal disputes and payments. You can also buy and sell property much faster than is the case now, given NFT’s transfers are instant.

Another use case in real estate is the tokenization of real estate for shared investment via shared ownership. In our current system, co-ownership of a property requires an inordinate amount of paperwork, time and legal fees. Property fractionation and token sales make it easy for investors to be able to enter and exit an investment, and rules can be codified via smart contracts to determine how many weeks of the year investors will have access to the property. In this way, co-ownership is actually tangible, compared to investing in real estate through the likes of REITs. (To dig more into the interplay between NFTs and real estate, this is a good place to start.)

Sport:

Not an arena (pun intended) I know much about admittedly, but none the less one that is poised for a massive acceleration of NFT adoption. Not only will ticket sales be a use case (see above), but sports clubs are increasingly moving into digital collectibles as a way to both increase fan engagement and earn additional revenue. An example of this is NBA Top Shot, officially licensed NBA digital collectibles. Owning NFTs can also be used as a gateway to IRL community events, giving holders opportunities to attend meet-and-greets with players. (For more, see here.)

Brands:

From fashion to luxury cars and merchandise, brands across the spectrum are experimenting with NFT collections. This could look like releasing an NFT alongside the purchase of a physical asset. RTFKT Studios pioneered this in 2021 when they released NFTs in tandem with physical sneakers – the campaign generated $31.MIL in revenue in 7 minutes. Dolce & Gabbana combined the physical and virtual in one collection in 2021 and earned 5.65 MIL.

For fashion brands in particular, NFTs can also be used as QR codes for supply chains. The entire supply chain of an article of clothing can be recorded on the blockchain, and scannable QR codes released as NFTs will allow consumers to check the provenance of articles of clothing they are interested in purchasing. This increased transparency could revolutionize not only fashion brands, but supply chains at large.

I won’t even get into the metaverse and gaming, but my point is that NFTs offer a wide range of applications beyond digital art, and my prediction is that we will soon start associating NFTs with some form of technology (the are ‘non-fungible tokens’, after all) rather than primarily with art.

A place for NFT art

To come full circle and because I can’t not playing devil’s advocate, I still think that digital art can be a fantastic use for NFTs… some occurrences.

One of these is generative art. Generative art is a subset of digital art that uses algorithmic codes to create an output, in a kind of unique “machine and artist” collaboration. Programming these codes requires skill and intentionality. Some collections or platforms require a certain feature to be built into the code to curate the result for a certain aesthetic… In other words, the process itself is art.

Generative art is a perfect application area for NFTs. Because the characteristics of the artwork are randomly generated during the embossing process, the person embossing the artwork is brought into the artwork’s creation process itself – this can create a unique emotional bond with the artwork.

One of the earliest examples of generative NFT art was Chaos Machine, a project born in 2018 at Distributed Gallery. The machine burns banknotes, and each time this happens, music is played while a token is stamped and a QR code is printed for the user.

Modern successful generative NFT collections often involve a certain amount of tangible artwork, strong communities and a roadmap for the future. Generative collections that have revolutionized the digital art NFT space include Cryptopunks, Autoglyphs, BAYC, Chromie Squiggles and Euler Beats in the generative music art space (Euler was originally incubated in MESH which by the way I work for but I promise I’m not biased) .

Love them or hate them, the impact these giants have had on the NFT space cannot be denied, nor can it be denied that NFTs have given them a unique avenue to grow an income stream for their art, as well as the ability to foster supportive communities.

Which brings me to the second reason why NFTs can be a good use for digital art: community. Many of the prominent NFT collections mentioned above have resulted in interesting social experiments in the form of creating new communities. While it could be argued that this is art for a purpose versus art for art’s sake, there is something undeniably powerful about bringing people together around a common thread (pun intended again).

And note here: Regular artists who do not primarily operate in the digital space can still issue NFTs, even if this is just a gateway to an online community. Painters, filmmakers, writers, musicians, etc, can release NFT compilations that guarantee their fans access to a certain amount of events each year, meet-and-greets, and the like. Digital art NFTs can play a major role in fostering community by token-gating its access, thus curating the community in a way beyond what is currently possible via social media and fan pages.

Stronger when separated

While I ultimately believe NFTs should be separated from digital art, this is primarily because there are a myriad of use cases the technology can be put to, as well as some of the negative associations the space has unfortunately gathered. Digital art will always remain one of those use cases, as it should.

One thing is for sure, David Hockney will make it anyway. In the unlikely event that he changes his mind about NFTs, I have no doubt that more than one NFT studio would be happy to help transform his series of iPad flower paintings into a generative NFT art collection. But that might be taking it a step too far…