“The auction room, as anyone knows, is an excellent medium for sustaining fictional price levels, because the public imagines that auction prices are necessarily real prices.”—Robert Hughes, 1984, The New York Review of Books
On March 11, 2021, Mike Winkelmann, a digital artist who goes by the online name, Beeple, auctioned off a digital work of art at Christie’s, one of the largest fine-art auction houses in the fine-art world. The title of the work was called, “Everydays: The First 5000 Days,” which was a collage of computer illustrations.
It sold for a staggering $69 million.
Why so much money? It’s a good question that’s difficult to answer. Aesthetically and visually speaking, Beeple’s work isn’t very original or interesting. New York magazine’s art critic, Jerry Saltz tweeted about the work, as well, “I looked up Beeple; just really really derivative Sci-Fi and Conan and Star Wars crapola as far as imagery and imagination go.” That’s not really a vote of confidence. It’s also not that Beeple’s work was the first digital work of art ever made. Digital artwork dates back to the 1990s, even before.
One reason Beeple’s work sold so high was because it included an NFT, or non-fungible token. NFT is an online digital format invented in 2014. An NFT is a digital certificate or digital file that’s connected to a blockchain, basically an online ledger. Blockchain technology also enables cryptocurrencies like Blockchain and Ethereum.
Part of what made the sale so remarkable is that worlds of fine art and digital media always had a frought relationship. This was particularly true when artists or gallery dealers try to sell digital art, which in some cases might be completely digital. Is the artist or gallery selling digital files? Or just the code of a website? And how exactly is it unique?
Photo courtesy of Nataworry Photography
Nevertheless, in 2021, many inside and outside the fine-art world seemed to be betting on NFTs, and by default, crypto, which is what NFTs are based on. The technology solves these and several other problems associated with digital media, by allowing cryptocurrency to digitally authenticate works bought online. NFTs solves the “unique” problem.
By chance or design or misunderstanding, sale of Beeple’s digital work ushered in a brief golden age of robust buying and selling of NFTs. It was a gold rush, of sorts, to buy NFTs: In December of 2021, Artnews reported that digital artist, Pak, sold a group of NFTs for $91.8 million, which may arguably be the highest price ever paid for a work by a living artist. This past March, the New York Times reported that $44 billion had been spent on NFTs. There was even a new museum dedicated solely to NFTs that opened this past April in Seattle.
Digital art seemed to have come of age with the minting of NFTs.
Then, in May and June of 2022, cryptocurrency prices crashed. The effects of that downturn reverberated in the NFT markets, according to many news outlets. According to Reuters, NFT sales were down sharply in the third quarter of 2022, to $3.4 billion from $12.5 billion at the market’s peak in the first quarter of this year. Bloomberg reported that trading volumes of NFTs are down 97 percent from January of this year, a record high. News outlets also connected the drop in NFT prices to the larger crypto crash. According to Bloomberg, “The fading NFT market is part of a wider, $2 trillion wipeout in the crypto sector.”
But that wasn’t the only bad news NFTs were getting.
In mid-October, Bloomberg published a massive 40,000-word story in Businessweek, written by finance writer, Matt Levine, who attempted to demystify and explain cryptocurrency as well as NFTs. But one might say that both crypto and NFTs got quite a harsh critique in Levine’s story: For example, in the middle of the article, Levine refers to an Esquire article, which discusses how some in crypto are trying to reimagine books as investment opportunities! Levine’s take is this? “The bad way to put this is that every web3 project is simultaneously a Ponzi.”
Levine also questions the thin connection between the code you’re investing in on the blockchain when you buy an NFT and the actual piece of art. He writes, “but what does it mean to say that the NFT is a piece of digital art? The art does not live on the blockchain…. If you buy an NFT, what you own is a notation on the blockchain that says you own a pointer to some web server.” It’s like paying a museum for a Cezanne, and they only give you the page from the museum catalog…or better yet, they’ve only sent you the museum wall label!
On Bloomberg TV, Pat Regnier, Finance editor at Bloomberg Businessweek who edited Levine’s story, said there are other aspects of NFTs to be skeptical about, “I think we’ve all observed that there were enough shenanigans in that [fine-art] market—of creating inflated valuations—[which may give] people a lot of pause about getting into that space.” Perhaps he was referring to Pak or Beeple.
Legally speaking, there are other troubling questions. “The intellectual-property rights to that picture of a monkey,” writes Levine, “are certainly none of the blockchain’s business. It’s not uncommon for the person or company selling the NFT series to 1) own the IP rights to the pictures of the monkeys and 2) promise to transfer those rights, or some of them, to individual holders of the NFTs. But if that happens, it happens off the blockchain; those promises are or aren’t enforceable through the normal legal system.” In effect, buying an NFT might not really solve the problems people expect them to.
For Renier, a rather chilling financial takeaway from Matt Levine’s story is that many within the crypto world have created digital processes and apps that have been repeating the mistakes made in the economic crash of 2008: “People who are building these structures are building things that look a lot like the things in traditional finance that break, and sometimes break disastrously.”
So, NFT investors might want to keep an eye out: It may not just be a very harsh crypto winter that they have to suffer through, but a crypto Armageddon.
The post The Rise and Fall of NFT Art appeared first on Worth.
A rise in Bitcoin prices is the most important factor for a significant increase in the number of new investors, instead of distrust in public institutions, dislike for traditional banks, or search for a store of value, according to a report by the Bank for International Settlements.
For an industry built on the principle of decentralization, we had a lot of trust in one 30-year-old. Understanding why is key to a more sustainable future for crypto.
Changpeng Zhao of Binance says he plans to help struggling digital asset firms. It is a stunning role reversal for Zhao and FTX CEO Sam Bankman-Fried.
The parent company behind Bored Ape Yacht Club adds to its growing portfolio of popular non-fungible (NFT) projects.
(Bloomberg) — Coin Cloud has tapped M-III Partners and B Riley Securities to help rework about $125 million of debt that the operator of Bitcoin automatic teller kiosks accumulated during a period of aggressive growth, according to people with knowledge of the situation.Most Read from BloombergFTX’s Balance Sheet Was BadChina Plans Property Rescue in Latest Surprise Policy ShiftBiden, Xi Chart Path to Warmer Ties With Blinken China VisitMusk Publicly Punishes Twitter Engineers Who Call Him Out
Crypto exchanges are rushing to reassure customers of their solvency as traders continue to pull money out of crypto.
Most other major cryptos were trading in the green, albeit barely so. Market Wrap is CoinDesk’s daily newsletter diving into what happened in today's crypto markets.
Dell Technologies (DELL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
A delicate painting of a gymnast doing a handstand has popped up on the wall of a wrecked building outside of Kyiv and appears to be the work of the British graffiti artist known as Banksy. Banksy posted photos on his Instagram page of the artwork in Borodyanka, northwest of Ukraine's capital. The town was the target of shelling and fighting in the early stages of the Russian invasion, which turned apartment buildings into charred, bombed-out hulks.
One summer day in the early 1960s, Michel Kleinbaum, a diamond setter who lived in New York City, paid a visit to his favorite thrift store near where he worked in Manhattan. Kleinbaum, who regularly attended Broadway shows in New York with his wife, knew he had to have it. Kleinbaum’s son, Georges, has decided to sell it now that both his father and mother have passed away.
Emilio MadridThe woman in the audience could not stop laughing, and when she finally did someone else started off. Curls of laughter, eruptions of giggles rippled throughout the theater. Mike Birbiglia gestured futilely, mock-furiously at the scattered transgressors, and told them off. Had they no respect? The woman’s laughter became little clotted gasps. She started laughing again, and suddenly everyone was.Birbiglia had been not-really-trying, not-really-fruitlessly, to see if the Vivian Beaum
A prominent Russian director on why he was forced to flee the country after criticizing Putin and the war in Ukraine
The string of tech companies laying off workers has accelerated in the last month, worrying those with and without jobs.
The Zacks Consensus Estimate for Copart's (CPRT) fiscal Q1 earnings per share and revenues is 55 cents and $884.5 million, respectively.
The fact that the exchange is based in the Bahamas and the general lack of regulation of cryptocurrencies could make legal action tougher to pursue.
Health Savings Accounts (HSAs) offer triple tax benefits. Contributions are tax-deductible, they grow tax-deferred and withdrawals are tax-free when used for eligible medical expenses. If you're married, you might be wondering if you can use your HSA funds to pay … Continue reading → The post Health Savings Account (HSA) Rules for Spouses appeared first on SmartAsset Blog.
Goldman maintained a sell rating on COIN, revising its 12-month price forecast to $41 from $49.
MARKET PULSE Shares of Nu Holdings Ltd. (NU) jumped 14.7% after hours on Monday after the Brazil-based digital banking platform reported a surprise third-quarter profit and revenue that beat expectations, helped by a boost in active customers.
The pandemic-driven growth of Zoom Video is long over. Corporate clients could boost Zoom stock but Microsoft looms.
Elon Musk's lawyer late last week sought to reassure Twitter Inc employees that they would not be held personally liable if the company disregarded a federal order to consider and protect users' privacy when launching new features. Former FTC officials do not think it is so clear-cut. In a May 2022 settlement with the U.S. regulator, Twitter agreed to improve its privacy practices and placed responsibility on people who held certain positions.
Author
Administraroot
