It would be impossible not to discuss the NFT phenomenon now that Beeple’s Everdays – The First 5000 Days artwork was sold at Christie’s for 69.3 million dollars on March 11, 2021.

What are so-called Non-Fungible Tokens (NFT)? The very definition of NFTs was hotly debated on occasion of that sale. An NFT is first and foremost a token, i.e. a tradeable financial instrument which identifies and represents, by means of an alphanumerical code, a digital “object” which may be a contract, an “artwork”, or an association of both. Such one-to-one representation is certified by a blockchain.

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If we restrict the analysis to “artworks”, although they are in reality mere digital images which one may qualify one way or another, the NFT cannot be fully separated from its creation and sale process. Once the artist, or rather the crafter of a digital image, has created it on a computer, he registers that image on the blockchain thereby “minting” an NFT. This registration establishes a verifiable and unbreakable link of authorship between the image – whether unique or in a limited number of copies – and its author. The NFT is quite close conceptually from a depository receipt on the capital markets, i.e. a negotiable certificate representing shares in a foreign company traded on a stock exchange. The blockchain itself acts both as a securities registry and a custodian on the capital markets, which is an entity holding (but not owning) the assets for safekeeping. A financial asset represents a claim of ownership of an entity, or of contractual rights to future payments. An NFT represents a claim of ownership of an image (or other intangible “objects”), and contractual rights to payments resulting from its future sale, rental, or lending. It is nothing else but a sub-category of financial assets. 

The NFT may be sold, in which case the author makes its work available for sale on an online marketplace such as MakersPlace, and authorizes such platform to execute a blockchain-based “smart contract” governing the sale to whomever is interested in purchasing the token. The terms and conditions of this contract are hard-coded, and the transaction is automatically executed on the platform, a process which hardly differs from, say, standardized derivatives contracts transacted on a stock exchange. Usually, these terms and conditions include an artist resale royalty payable to the author whenever the token is resold. The safety and automaticity of the process provides a degree of trust which in the “real” world is provided by institutions such as banks and stock exchanges, or by auction houses for artworks, backed by the full force of the law. The only thing which is – relatively – new with NFTs is that they allow for small transactions in images to occur very rapidly, initiated directly by people without any particular competence in either the asset class or the business of trading, as otherwise transaction costs would be far too high, such transactions being settled in crypto-currencies.  

NFTs have a number of interesting aspects which concur in making them the ultimate “capitalist” tool in the artworld. The artist Kevin McCoy presented them in 2014 as a way to bypass intermediaries such as galleries and art dealers of every kind, thereby allowing graphic designers and their collectors to meet directly and save what are pretty high intermediation costs (not to mention taxes…), without the need for a third-party guarantor or trustee. Therefore, at least theoretically, the economics might be better for some artists, and much better indeed for thousands of would-be artists who would never have made it through the “filter” of the established channels. That movement merely replicates the disintermediation process which has started four decades ago on the financial markets. Let us only reflect on the fact that the NFT platform created by McCoy, Monegraph, ceased operating a few years later while Christie’s has been around for 255 years and the oldest European stock exchange dates back four centuries. Granted, the blockchain itself is unlikely to collapse anytime soon.

The second aspect of NFTs is that, by tokenizing images, the ultimate transformation of art into a pure financial product is achieved. Images have become freely and instantaneously tradeable, and any number of derivatives can now be built on the basis of these contracts just as has happened in the 1980s with financial assets on the capital markets.

A third aspect which is key to any NFT discussion is that a convergence between capitalism and anarchy is made possible in the particular field of images: efficiency, freedom from constraints, and the absence of any “master” or gatekeeper is achieved in that NFT alchemy. You may wonder why the same “purists” who worship freedom and disintermediated contracting between all participants in the market of images do not worship in the same manner the now disintermediated financial markets which deal in the market of claims to streams of cash, that other digital “good”…

The battle triggered on the occasion of the Everydays sale at Christie’s about what is a legitimate NFT, making it different from a mere sale of a JPEG through an auction process, is exceedingly interesting. Claiming that the presence of Christie’s and the occurrence of parts of the transaction outside of an online platform invalidates the NFT invalidates the NFT nature of the transaction makes no logical sense, considering that the “minting” of the image is what makes it an NFT in the first place, and that the choice of transacting fully inside or partly outside (for the bidding process and transaction registration) of an online platform remains. The only differences are visibility outside of the crypto-community and – to a small degree – transaction safety. Given that the financial safety of the transaction is a mere technicality (assets have nothing to do with the warehouse or safe in which they are kept…), what the “purists” really say is that an NFT is an ideological device which aims at eliminating any powers (the anarchist agenda), maximise profit to the seller without any state interference (the capitalist agenda), and enforcing as much secrecy as possible, including in relation to the State by the use of cryptocurrencies and the absence of any “residence” of the good or the transaction (the “cryptofan” agenda), which attempts at blurring the lines of legality. Nothing surprising if one thinks of the building of parallel “cyberworlds” as fortresses raised against the reach of established powers, but also as attempts at influencing and ultimately modifying the workings of the actual, let us call it “non-digital”, world. The purity of the NFT is mostly related to keeping it within the strict boundaries of a community, which fears being contaminated by “old-worlders”. Amazingly enough, contemporary digital wizards revive the most ancestral notions of the sacred which establishes a distinction between purity and impurity (in Latin, the word sacer designates what cannot be touched without being soiled). Impurity is in the nature of what is concrete (see The Pure and the Impure, Vladimir Jankelevitch, 1960). 

In reality, so to speak, NFTs are only in part about images, which is why there is so little debate about their meaning and status. Indeed, apart from some works which may be construed as iconic commentaries of the world, or which reach a minimum level of formal novelty, the images produced are for the most part irrelevant, trivial, or at best decorative, demonstrating at most “software literacy” (think of Cloner, Zbrush, V-Ray, Unity, Unreal, UV mapping, etc). They matter however when considered as symbols of a counterculture that rejects anything established and attempts at promoting a new system, a digital utopia which, perhaps, will constitute a model, a precursor of this world to come, and will shape the minds of a generation in such a manner as to making this utopia happen. NFTs are about utopia, which goes some way towards explaining the harshness of the debate surrounding what a “true” NFT actually is, as if this question had any meaning other than arbitrary beyond the step of “minting”. This debate verges on hair splitting, each “side” advancing arguments related mostly to process rather than substance: a sure sign that the point is not the one being debated, but the wider ideological context from which one makes that point.

Having said that, what is Everdays – The First 500 Days about? It is a large 21,069 x 21,069 pixels (319,168,313 bytes) square image, apparently accessible by using the token ID: 40913 and the wallet address: 0xc6b0562605D35eE710138402B878ffe6F2E23807. That image is a digital mosaic composed of 5,000 images produced over a number of years by Mike Winklemann, alias Beeple, a Charleston-based digital artist. These images range from political satire featuring the inevitable Trump or Hillary Clinton, both equally rubbished, some politically correct messages, some sci-fi illustrations, and some mix of porno and cartoons typical of the “IronyBro” sub-culture. Fortunately enough, as far as the earlier images are concerned, the larger square does not really invite the eye to carefully observe each one of them: some would struggle to meet the standards of humour of a teenager.

Others however, the most recent, do display an undisputable maturity of design, a visual inventiveness and an ability to reflect the current cyberyouth culture which are certainly impressive.

Not a culture based on words, for sure. To the question asked in the course of a discussion held at School of Motion: “I’ve heard you say that before… that you don’t know the “right way” to do a lot of things, you just figure out another way around it… has that ever held you back in your career? ”, Beeple answered : “ If I was working in a bigger pipeline on some bigger project, I will fuck that shit up. Don’t fucking hire me to model some shit, or fucking light some shit, or texture whatever, because I will all these bullshit things that will fuck your pipeline up bad. That’s where I think it hasn’t held me back that much, because I am not usually on bigger teams where I need to do things the right way, or it’s gonna fuck the next person over, if that makes sense.” The four last words at least do.

Now, where is this visual world coming from? The sources are too many and diverse to list, and may range from the “pop surrealist” Chilean cartoon painter Victor Castillo to the American punk artist Zak Smith, not to forget the Mexican-born “Art Brut” exponent Martín Ramírez, who Beeple seems to have a keen interest in. One should add the great ancestors to many of the images later polished in video games and digital art, the Japanese yōkai, these folktale spirits which have inspired a whole world of fantastic art: it was only  natural that ghosts should end up inhabiting our virtual space.

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As the New York Times puts it in an article dated 14th of March, “Welcome to the new frontier, the junction of internet culture and financial libertarianism. What’s art got to do with it? ”. Well, nothing much, but contemporary culture, political philosophy, and the art market, quite a lot. In a sense, we are witnessing an anthropological rather than artistic event.

Before the Christie’s sale, Beeple had been posting on Instagram daily digital compositions – aptly named “Everydays” – since 2007. As reported by The New Yorker, it is the popularity of his Instagram account, reaching two million followers, that gave him the idea to use NFTs in order to make serious money: “I’m more popular than all of these people, and if they’re making this much, then I would probably make a fucking shitload of money”, is he reported to say. Clearly, money was a key driver, and Beeple  proved to be an extremely astute financier who understood not only how to mint images, but also how to milk his contemporaries, themselves rightly persuaded that they had witnessed a key moment in art history, and had in a way purchased that moment. One of the persons acting on the purchasing side, Twobadour, claimed in an interview with Artnet News that they didn’t need a preview, given the likely staggering appreciation of the investment into the future: “This is going to be a billion-dollar piece someday”. The unholy mating of capital and anarchy under the collective cyber-blessing of internauts has brought about the advent of digital fetishism.

It is most interesting to understand the motivations of the buyers, Vinesh Sundaresan, aka Metakovan, and Anand Venkateswaren, aka Twobadour. These persons are investors in and operators of, one way or another, the Singapore-based NFT crypto fund Metapurse which has been collecting since 2016 a variety of asset classes within the NFT space, including real estate, a digital car, and more recently digital art. The identities of these two shrewd players in the crypto-world were revealed a few days after the sale; they then qualified their aliases as “exosuits”. Once a crypto… It would appear that Sundaresan was an investor in Etherium, and is well-versed in the crypto-currency business. Kovan, by the way, is a neighborhood close to Singapore, but it is also a Tamil boy’s name meaning “king” or even Shiva; meta means beyond, in Greek. You got the idea for MetaKovan.

What was stated in online networks, and particularly in an article by Ben Davis dated March 19, about their motivation for purchasing Everydays sounds rather tout: it would be about taking a stand for “people of colour”, whatever that means. They are reported to have written in a post : “The point was to show Indians and people of colour (perhaps Indians have no “colour” ? Or are implicitly a notch above “people of colour”? You may wonder… and the Chinese are conveniently left out, which is prudent when living in Singapore) that they too could be patrons, that crypto was an equalizing power between the West and the Rest, and that the global south was rising”. It verges on the superhuman to pack as many clichés in a same sentence, but nothing is impossible in the NFT world. They claim to use the Christie’s auction as a way to challenge the “whiteness” of the art industry, it would seem. Perhaps they are not aware of the achievements of their own civilization? Or perhaps they suggest that “Indians and people of colour” were not capable by themselves of creating an artworld without asking the “West” (newspeak for white people) to open the doors of its own artworld to them ? Such a sentence sounds as if uttered by a butler who made it to buying a manor. The purpose must be to legitimize a newly-gained financial power by a show of political rectitude, spilling out on their way pebbles of resentment. It would be desirable that each member of both West and Rest, as they say (who would call himself a member of “the Rest”, one wonders…) focuses on creation rather than racialist blatter.    

Money is a more serious concern, it would appear. According to the Washington Post (article by Gerrit De Vynck and Douglas MacMillan dated 18 March 2021), “The buyer, a cryptocurrency entrepreneur who uses the pseudonym MetaKovan, may have benefited financially from the sale. Months before Christie’s auction house put the piece up for auction, MetaKovan had bought other works by the artist, divided ownership of them into blockchain-based “tokens” and sold those to the public, according to a blog post from MetaKovan’s crypto investment fund. As bids for the new work kept rising, so did the value of those tokens. By March 11, the day MetaKovan won the Christie’s auction, the value of his shares in the art tokens had risen by about $51 million, according to historical prices on the crypto data site CoinMarketCap, and a description of his financial stake on his investment fund’s website.” If true, well done. But if anyone smells a faint scent of Ponzi N⁰5, he must surely be wrong as the famed pyramid is still missing; food for financial thought in the future, though. This is financial acumen at its best, complemented by a communication Koh-i-Noor which deserves to be listed among the best advertisement campaigns of recent times.

After all, as mentioned above, NFTs are a particular class of financial assets which allows for trades in value expectations based on an underlying asset which is initially deprived of any intrinsic value. This asset acquires value over time by attracting the interest and desires of anonymous crypto-crowds, desires of fortune through speculation, of belonging to a community, of looking at a mirror of their time, of peering through a virtual keyhole on a Minecraft building block of their possible future, of imitating what others do, assuming that others have a better insight on the market’s direction and fundamentals. Desire of being “where things are being done”. Usually, financial assets can be priced on the basis of a market history, information available about certain variables, and a general principle of rationality in decision-making ; which is why one speaks of rational expectations. In the particular case of art NFTs, there are both little market history and few measurable variables as yet, but a glance at the Open Sea marketplace will show that these are on their way. In addition, there is a general sentiment which may be captured online, as well as a visual culture which together build a case for a lose form of rationality of the decision-making process. None of which imply any judgement on the art itself beyond the competence displayed in the use of the relevant software, the novelty of the images, and perhaps the “online personality” of the artist.

Let us now hear about the ambitions of the duo, as expressed in an interview for Artnet news with Eileen Kinsella.

Question: “What are your plans? Can or will you display this somehow?”

Answer: “I’m so glad you asked that. That’s one of the things we want to change about how the world engages with art. Typically, there’s only a few things that you do. You might flip it, sell it for a higher price at a later date. Second is to park it somewhere in a large warehouse, which is what happens with a lot of iconic art that gets scooped up. And third is to open up the experience to the community, which has been historically how art was dealt with, you know, the temples in ancient Rome or Egypt or India. But that is not financially sustainable (Twobadour is not aware of anyone collecting art because of an interest in art, nor of the innumerable forms of public art other than ancient temples, starting with street art which comes a good deal cheaper than building the Taj Mahal).

So what we want is to build a massive monument for this particular work of art which exists only in the virtual world. We have a wish list—a dream, so to speak, of some of the most prominent architects on the planet. We’d like to collaborate with them to design something that can exist only in this virtual space and then install this art in it and open it up to the world. The dream is to build the monument and, in two months’ time or so, share a link with you so that you—wherever you are in the world—at the click of a button, can experience the grandeur of this work.”

The idea, in a nutshell, is to create a virtual equivalent of the Forum of Augustus or of Taj Mahal, visually amazing enough to draw massive crowds, pack it with digital art, and be celebrated as the real Emperor of that virtual place exhibiting virtual artworks to real people. Who might of course purchase some NFTs while touring these new temples.  

The market for NFTs is relatively recent, and still highly speculative; average daily NFT sales have slumped around 70% from mid-March to mid-April, with the “art” category falling from 1.7 million$ in daily sales to around 0.5 million$ in just a couple of weeks. It remains nevertheless a major phenomenon of our time, when considering that the whole NFT market was worth 2 bn USD in the first quarter of 2021, twenty times higher than the previous quarter; the Nonfungible.com website mentioned that there were 73,000 buyers for 33,000 sellers during the first quarter of 2021. Overall, NFTs sold as artworks generated 12.9 million$ in 2020, around 5% of the total NFT market, with around 64,500 transactions. This may be small when compared to the online market for arts and antiques the same year, worth 12.4bn USD (Source: Statista), but could be growing much faster. As a new generation “educated” on video games and other digital food takes on, the market is virtually certain to expand. It also brings some key innovations to the art market in general.

Digital artists familiar with the world of blockchains tend to use social networks to build a community of followers and “likers” which subsequently helps the sale of their work to crypto collectors through specialist platforms such as MakersPlace and Nifty Gateway. These platforms take a fee of around 10% on each sale, which is far less than a gallery, and more importantly offer automated resale royalties to the artists at a time when intellectual property rights seemed to be threatened by the multiplication of virtual distribution in all segments of creation. The British crypto artist Robert Alice had become the first artist to sell an NFT at Christie’s.

In that sense, Everdays – The First 5000 Days, the visual equivalent of a hyperbole, is a perfect example of an undifferentiated mass of images, none of which particularly matters, but which all together represent a metaphor of this revolution in the global economy of images, as well as of the advent of a more general irrelevance of meaning in art. That is probably the true importance of this piece, and what makes it historically unique.

As Robert Norton, the co-founder of Verisart, correctly observes, “a hundred dollar print (by street artist Banksy) is now selling for half a million dollars, yet, artists like Richter are selling fine art prints for a fraction of that…you can’t equate the importance of an artist with the value that they may have in a specific type of market”. Value and price were always two different things. In art, what constitutes the former is an aggregate of judgements by a limited number of people who possess an “eye”, a thorough understanding of one culture or another, a certain hermeneutical talent, a good sense of art history, and the social power to promote their judgements. Price may be influenced by value, but its formation depends on a wider ecosystem, where different variables are at play; it can be manufactured by generating “desire” in one form or another, and any market is essentially a quantified “proof of desire” by its participants (or of need, though not for symbolic goods), a proof which may only provide a useful price signal through the repetition of transactions for identical or comparable goods. When the anchor of value is weak, and the object put for sale unique, or scarce, attraction can prove elusive, and volatile: it greatly depends on the ecosystem of potential buyers, and what feeds their fancy at any point in time. As an aside, perhaps there would be merit in applying models developed by the physics of aggregation of cohesive particles, considering that attractive forces can be induced by capillarity; after all, what is the net if not a vast medium allowing for capillarity to proliferate ?

What seems clear today is that people will be more and more willing and even eager to live in an augmented reality lifestyle, and that a process of “derealization” is at work in large segments of the population after years of growth of computer literacy, digital gaming, and image consumption. People are buying celebrity art and digital plots of land as investments, and even digital sneakers or pieces of furniture for their digital avatars. For example, the Argentinian designer Andrés Reisinger sold a virtual piece of furniture on Nifty Gateway for approximately 70,000 USD, which can be placed in 3D spaces such as Decentraland or Somnium Space. The psychology required to do so already belongs, to a certain extent, to a mutating specie. Here are segments of the population which are ready for a slow process of de- or trans-humanization, shifting a significant part of their lives into parallel worlds, metaverses now under construction. Whether or not they will be able to survive over centuries as essentially a new species remains to be seen, unfortunately by others.

NFTs ask some fundamental questions, such as : what of the passages between real and virtual and what of the shaping of the former by the latter ? What of the relationship between body and mind ? What of the controls to be implemented in that virtual world if it has any bearing on the real one ?  What of the “binarity” of humans living simultaneously in two worlds? The gaming world has established that many young persons feel stronger emotions on their screens than in “real life”. Literature and cinema had this power, but images which a person can manipulate are considerably more powerful and addictive. With NFTs, which establish a link between cash and pixels across the barrier of virtuality, these two worlds are converging, if not yet merging (nobody will get fed and healed on the other side…).

For as long as states will tolerate convertibility between the currencies which they control and crypto-currencies, that convergence will continue. One may even discern a connection with ecology: as more and more activities in the real world will become constrained by states under the pressure of ecologic activism, whether rationally justified or not (think of mass tourism…), more time is likely to be spent in virtual worlds which are difficult to police. Mental habits gained on the one side will spill over on the other. What will prevail on the virtual side: is it anarchy, or empire? My bet is the latter, for two reasons: first, because digital imagery is unconstrained by ethics under the pretext of fantasy (no one gets physically hurt), as many of Beeple’s images can testify, and therefore such a world is more likely to be ruled by force. Second, because unregulated crypto-cash is king, the cash buying the pixels which are the very objects of desire. Perhaps one day people will be asked: how many pixels do you make ?      

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