The world of digital art has a problem. While there is only one Mona Lisa, a digital artwork can be created, copied and even altered with unbearable ease. This all but ruins digital artists’ ability to sell their works the way a painter or sculptor would. But that may change thanks to blockchain technology that undergirds digital currencies like Bitcoin.
Non-fungible tokens – NFTs – are supposed to enable digital objects to preserve their originality and be traded the way one would trade baseball cards, stamps or even art. Many people have heard of Bitcoin, but NFTs take things one step forward.
While cryptocurrencies like Bitcoin can be traded like any other currency and be broken down into smaller units, like a dollar into cents, NFTs can’t be taken apart. In fact, what makes NFTs so relevant for the art world is that they are unique and inherently "non-fungible" – they’re a singular unit, much like a work of art.
The reason is that unlike Bitcoin’s blockchain, NFTs use Ethereum, another blockchain technology that permits not just coinage but also “smart contracts.” These contracts endow the digital file with complex relationships; for example, allowing a digital image to have a copyright so that each time it’s sold the original owner gets a percentage of the sale.
Imagine a rare baseball card. It has value because there’s an entire market of people who collect baseball cards. The original card has value not because of any physical property but because of its scarcity. Baseball card collectors know how to verify that a certain card is actually rare and attribute a specific value to it. NFTs work the same way – a digital artist can create (or “mint”) a file through blockchain, and as a smart contract its identity and ownership will be preserved.
Indeed, despite its cryptic cryptocurrency origins, the NFT craze has already broken into the mainstream. Only last week digital artist Mike Winkelmann, also known as Beeple, sold one of his digital works for nearly $70 million at Christie’s. The highest bidder received not just the deed but also a unique digital file – a simple JPEG – of which they’re the sole owner, with their rights enshrined into the Ethereum blockchain.
Christie’s is only the largest auction house to get into the digital game, but online in recent months, dozens of smaller digital galleries have cropped up to let artists mint their works and collectors to bid for them. For example, the marketplace Nifty Gateway has created a system not unlike brick-and-mortar art galleries, allowing artists not just to sell a work but to reap a commission on any future sale of the file. The rights and percentages automatically get transferred via blockchain.
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A physical and digital combo
Yam Ben Adiva, a star young Israeli designer with clients like Dua Lipa, Xiaomi, Nike and Apple, hopes to bring his Yambo brand into the cutting edge of NFTs. Ben Adiva told Haaretz about his vision for breaking the mold through his latest initiative, Dissrup.
“I call it phygital – a combination of physical and digital art,” he says, adding that Dissrup will allow real artists and designers to cooperate to “mint NFTs of their works. More importantly, it will allow them – and anybody buying their digital output – to receive a physical version of the work.
“Most of the NFT galleries or marketplaces are very business-oriented – they want to allow artists to sell,” Ben Adiva says. “But as a result, the NFT space is actually very cruel to artists today. So while there are really good marketplaces out there – like Nifty Gateway or SuperRare – we want to do something less business-focused and more art-oriented.”
At the basis for Dissrup lie two interesting assumptions that Ben Adiva makes. The first is that despite the fanfare around NFTs, the digital art market is very similar to the regular art market in that value is linked to the actual artist and his or her name recognition. Second, in today’s world, artists and creators must collaborate to create real value – be it for a client or for a collector.
“There are tons of collectors pouring large sums into collecting digital art these days; on the other hand, collectors don’t always know what they want,” Ben Adiva says. “They don’t commission works the same way clients do. They buy art because a certain artist with brand value is behind the work. That’s what we want to do in a sense, step in and create a way for artists and creators from both the digital and physical world to create value together and keep a percentage.”
Proponents of digital art sales via NFTs claim that the use of smart contracts enshrined through blockchain is what makes this method revolutionary in the long term. Not only can we now create certificates of authenticity for digital artworks, we can create contracts ensuring that the artists make a profit every time their art is sold.
Dissrup wants to take this one step forward. “I don’t want to be the marketplace, I want to be the collective that makes the art but also gives it extra value,” Ben Adiva says. “For example, imagine you buy a work of digital art created in synergy with a traditional artist. The owner gets the digital item with a record on the blockchain and the physical counterpart as well.”
Ben Adiva admits that this isn’t necessarily a big market but says it could create a new model for artists and creators for both profit and creation.
The first work is already online, a digital work called Genesis 0x1. It’s a collaboration between a designer from China, Somei Sun, and a sound artist from Germany, Jürgen Branz. If it sells, the artists will get the majority of the revenues and royalties, while Dissrup will get a percentage for creative direction and overseeing production.
Another example Ben Adiva gives is from a style known as “satisfying machines” – visual loops of different sorts circulating in perfect form.
“If you’re into satisfying machines, you probably know the big names active in this field,” he says. “So imagine you buy an NFT of such a machine and you get not just the digital ownership but also a physical version built from high-quality materials that would also be a one-of-a-kind item owned exclusively – that’s real value for everyone.”
Digital fashion is another arena Dissrup wants to focus on. “NFTs suddenly make the idea of digital fashion design a viable opportunity. There’s an entire generation of kids growing up who are used to buying clothes or items in digital worlds – for example, Fortnite or World of Warcraft,” Ben Adiva says.
“We’re not there yet, because each of these games is a closed universe – I can’t, for example, buy a shirt from one game and use it in another. But if there was a so-called metaverse for NFT fashion, you could do exactly that,” he says, adding that the same value that comes from owning an original shirt by a big designer can be translated into the digital world. “Dissrup wants to give fashion designers the ability to do this.”
Metaverse notwithstanding, Dissrup has already released its first phygital piece of fashion: a shoe created by Finn Rush-Taylor Studio, a footwear creator focusing on virtual reality, and Zellerfeld Shoe, which makes 3D-printed shoes.
issrup plans to release bundles on a monthly basis including 15 NFTs and some physical representation of the works involved in them. “This is a new and exciting arena; there’s room for everybody,” Ben Adiva says.
Israeli NFT market?
Yambo’s Dissrup isn’t the only game in town. In fact, M51, a company that helps startups scale their business, hopes to be on the ground floor of an Israeli NFT market. While Yambo is focusing on creating art and value for artists, M51 aims to create an NFT market for Israeli tokens.
M51’s Rotem Zacary says “any company owning any form of intellectual property can in theory mint an NFT of their property. This is a massive revolution. What we want to do is open a marketplace that will allow this to happen here in Israel; for example, a sports team selling digital merchandise that used to be physical.”
The company is already involved in the cryptomarket and is working on a way to allow financial institutions to enjoy the benefits of blockchain while still meeting regulatory demands. “A bank or a large insurance firm can’t really keep its money in a digital wallet because there are rules governing these things. We’re working on addressing this,” he says.
This is how he and his colleagues first noticed NFTs. “We just noticed how intellectual – as opposed to material – property is becoming more and more valuable. From this understanding, we want to create a way for large corporations that already own such property to easily tokenize them,” he says, using the term for creating a digital token that serves as the digital asset’s original copy.
One model M51 is closely following is the one deployed by the NBA – letting fans buy key moments in basketball history as video files. “Imagine you could own not just your favorite soccer player’s jersey but also the actual goal they scored. The different teams would sell you the actual rights and you would actually own that moment.’”
Why focus on the Israeli market? “Because we’re Zionists,” Zacary says, “and we believe that Israel is the perfect place to do a proof of concept for such a project.”