The $69m sale of an NFT artwork in March was the culmination of over 13 years of artistic endeavour. Every day over that period, the digital artist Beeple posted a new work of art online, which he brought in the work titled Everydays: The First 5000 Days. Also making the news were works on the theme of The Bored Ape Yacht Club and the strangely artistically basic CryptoPunks, which were also trading for millions.
Not just art-linked
No less than the equivalent of $40.9bn was spent on NFTs in 2021, according to an estimate by crypto analysis organisation, Chainalysis. However, as much of this spending was via cryptocurrencies, this year’s crypto bust has to be linked to declining interest for NFTs. It is said that NFTs which traded for six or seven figures are now retailing for a few hundred.
“It’s important that when we talk about NFTs, it is not just about art,” said Deloitte Luxembourg’s Adriano Picinati di Torcello. NFTs are original versions of digital artefacts, with their authenticity verified by blockchain technology. This has multiple potential uses other than being at the heart of a digital artwork.
Fingerprinting is a use case that is attracting attention. “This technique creates and records the equivalent of the ‘DNA’ of an artwork or collectable item, through a scan of the object or the insertion of a chip,” Picinati di Torcello explained. “This information will be on a blockchain and will be associated with additional information about the work, such as certificates of authenticity and origin, thus increasing transparency in the art market.” This process can be used to verify the authenticity, traceability and ownership of objects, such as jewels, precious metals and even collectable artefacts like limited-edition training shoes.
Even though most of the early hype around the art NFT market has died, there remains the potential for this technology to find a niche. “When I discovered NFTs, my horizons opened 360 degrees. It just opens so many more possibilities,” the Luxembourg-based artist Sumo told Delano earlier this year.
New funding potential
Part of this is how the technology creates new funding potential, said Picinati di Torcello. “Art is a key element of humanity, but it needs to be funded, and NFTs open opportunities for multiple investors to fund projects while sharing ownership,” he said. There is also talk of creating “cultural bonds” which would support a multitude of endeavours, and this could be NFT/blockchain-linked.
The long-standing question around blockchain use cases (other than cryptocurrencies) is what value they add beyond that provided by more conventional service providers. Could it be that fingerprinting will make the breakthrough?
This article first appeared in the November 2022 issue of Delano magazine.