NFT art galleries: Future of digital artwork or another crypto fad?
As nonfungible token (NFT) art continues to develop as an industry, a new trend is quickly emerging: physical NFT galleries featuring digital, nonfungible pieces of unique artwork. Most recently, the largest Bitcoin (BTC) event in history — the Bitcoin 2021 conference — featured a peer-to-peer pop-up NFT art gallery with artwork from over 30 different crypto artists.
Teodora Atanasova, VIP relations manager and founding team member of Nexo — the company that backed the Bitcoin Art Gallery — told Cointelegraph that over 100 pieces of art were sold during the two-day conference: "This demonstrates the impact physical NFT galleries can have on both the traditional art world and the crypto industry." She added: "We need to bring crypto to people's eyes and touch."
Popular crypto-friendly cities like Miami are not the only places where NFT art galleries are appearing. Earlier this month, an NFT art gallery pop-up took place in Dallas, TX for the first time. The event was hosted by Artist Uprising, a Dallas-based talent agency for creatives, and featured several individual art pieces by breakout NFT artists who have collectively grossed over $1 million in online digital art sales in the last month alone.
Merrick Porchéddu, CEO of Artist Uprising, told Cointelegraph that the event attracted over 200 attendees, with NFT sales still ongoing in open auctions:
"Many prints were sold, along with two fine art canvases. The 'Making of NFT Gallery IRL' documentary was also filmed (which will hopefully explain so much behind what NFT art is all about and why it is here to stay). Also, we now have three districts wanting to bring our NFT gallery to their spaces."
"So Happy We Met" NFT artwork by Magdiel Lopez. Source: Artist UprisingUnderstanding the need for physical NFT art galleries
Yet while physical NFT art galleries are a notable step for the crypto industry, some art aficionados, or traditionalists, may question the importance of, or even the necessity of, NFT art galleries in the real world.
For instance, an article in The Art Newspaper quotes Saskia Draxler, co-owner of German art gallery Galerie Nagel Draxler, who noted that the digital artist Beeple — who auctioned off a piece of NFT art at auction house Christie’s for over $69 million — will most likely not impact art history. She added that "NFTs will not replace physical art any more than NFTs from a Nike sneaker will replace real sneakers."
Related: NFT 'art revolution': Beeple on his 5,040-day labor of love
While this is just one opinion, some believe that the confusion around NFTs and the need for physical galleries may stem from a lack of understanding. Carrie Eldridge, founder and CEO of ATO Platform — an asset management service providing royalties to artists, galleries and nonprofits — told Cointelegraph that there are many pragmatists and conservatives who are not ready to embrace NFTs as a legitimate medium. "They also don’t believe that NFTs provide a solution to challenges that have plagued artists for generations, like value tracking, royalty collection, collector analytics, value appreciation for collectors and insurance companies and many more complex issues," she said.
Although this may be the case, Eldridge noted that it’s important to consider perspectives from both traditional collectors and the crypto community when it comes to NFT art: "At ATO we are enthusiastic about the innovation and at the same time, are vigilant and protective of the art industry and those who have toiled for decades to make it what it is today."
While Eldridge brings up a valid argument, it’s important to point out the reason that physical NFT galleries have appeared in the first place. While some may think that these venues opened simply as a result of lifted COVID-19 restrictions, industry experts beg to differ.
For example, Marc Billings, founder of Blackdove — the company that launched Miami’s first NFT art gallery earlier in June — told Cointelegraph that NFT art galleries are no different than traditional galleries in form and function. However, he noted that traditional art galleries have failed to meet the needs of the NFT artist, both in terms of technology and collector interest, thereby opening the door to dedicated NFT galleries. Billings said:
"NFT artwork more closely resembles a moving painting than a traditional work of video work, which has been missed by the more conservative art world. Artists and curators are starved for wall space to showcase their works and voices that the NFT gallery is uniquely positioned to handle."In addition to digital NFT artwork being displayed in real-world spaces, NFT artists have also started to create physical pieces that are associated with their digital creations. Not only do physical NFT art galleries allow these pieces to be displayed, but they also help attract interest from the mainstream.
For instance, NFT artist Taylor Good — also known as "Warhodl" — told Cointelegraph that by creating physical soup cans tied to digital NFTs, his pop-up at Bitcoin 2021 attracted collectors who were new to the NFT space.
Bitcoin original can NFT artwork by Warhodl. Source: WarhodlEchoing Good, crypto artist Sergey Gordienko — also known as "Do What You Love Artist" — told Cointelegraph that he is offering physical pieces of NFT art to traditional collectors along with their digital versions. "I think this brings additional value to the physical art piece," he said.
Bitcoin artwork by Do What You Love Artist. Source: Sergey GordienkoNFT art and the importance of blockchain
While it’s important to recognize the necessity of physical NFT galleries, Billings also pointed out that blockchain technology plays an important role in the overall ecosystem: "Blockchain allows the hard work of the various members of the community to be recognized and compensated accordingly."
Indeed, blockchain is one of the most important features behind NFTs in general, as it has created an entirely new financial model for these assets. This has enabled creatives to achieve a larger portion of profits, as value is exchanged across a blockchain network. In addition, proof of ownership is achieved for collectors because all transactions are conducted and recorded on the blockchain.
Good explained that NFT art has allowed him to receive profits in real time, instead of waiting for galleries to accept, price and then sell the item:
"The age-old issue as an artist is knowing your worth, asking for it, and actually receiving your worth. While NFT’s are simply a utility of the blockchain, the creative world is lucky to be one of the first vehicles or use cases, because what NFTs essentially are is a direct value exchange."Moreover, the decentralized finance (DeFi) protocol Aave is currently working on developing a platform to use NFTs as collateral. Jordan Lazaro Gustave, chief operating officer of Aave, told Cointelegraph that the company views NFTs as a store of value, typically in the form of artwork. He noted that Aave plans to use NFT art as collateral, similar to the way a bank would offer a credit line to someone wanting to purchase a piece of fine art.
Related: Digital turns physical: Top NFT galleries to visit in-person in 2021
While Lazaro Gustave couldn’t reveal the full details of the platform in development, he noted that traditionally in the DeFi space, fungible assets like stablecoins are used as collateral. However, he pointed out that NFTs are nonfungible, and that Aave has developed a way to use NFTs as collateral at scale.
Will NFT art galleries be an ongoing trend?
While the benefits provided by physical NFT galleries are evident, it’s unclear whether these dedicated spaces will continue to emerge across the world — or will die down as the NFT art hype fades.
Porchéddu explained that while he initially thought NFT art was a bubble that was going to pop soon, he now believes it is a trend that will morph and stay, adding: "People are getting incredibly innovative and approaching this in a unique way where they're providing solutions to problems."
Billings further remarked that there is no traditional gallery that can keep up with the technological innovation coming from the NFT art space. Echoing Billings, Eldridge commented that NFT art is not a revolution but an evolution of an old standing art form: digital art. He said:
"The reason why digital art has not caught on earlier in previous decades is because of the inability to track it. An NFT is merely a 'pointer' toward where the artwork is saved/stored, along with the aim of adding value by confirming it is limited or scarce. NFTs are essential to explore, and there are many enthusiasts who are embracing this innovation."