Digital Art Valuation: "How is An NFT Worth Anything?
"But, but I can't TOUCH it" "Somebody will COPY it"
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There was a great facebook discussion on A King’s Eye View’s facebook wall the other day.
In fact, there are great crypto/blockchain discussions on his posts nearly every day.
One of the question is by a skeptic of digital art. Surely this is a valid question.
The discussion was about digital ownership, digital art, and this radical new concept of NFTs.
NFTs are Non-Fungible Tokens. They are blockchain “tokens” that allow us to represent ownership of unique assets on chain.
Unlike bitcoin, NFTs are unique, and can be minted by a creator at will. The catch is, ownership and provenance is 100% guaranteed provable on chain.
NFTs enable artists to control, distribute, manufacture and monetize (or not) pieces in any way they want .
Picture below is a piece of digital art that was auctioned by the artist Android Jones sold on SuperRare.co
Guess how much it sold for?
$21,000
Example 2: A VR and digital artist I follow and admire, Sutu Eats Flies, has launched a collab with Deadmau5 .
The NFT is current going for over $30k right now on SuperRare.
See that 50.237ETH bid!
I wouldn’t buy it myself - I personally have little interest in the digital art collections for owning myself (yet).
But I’m not blind.
What I see are rabid fans and blockchain eccentrics showcasing their status, their neon-Baroque palettes, and their flippant nouveau riche generosity - distributing new wealth back down to artists who capture the crypto meme zeitgeist.
I see competing marketplaces like Rarible, SuperRare, and countless more vying for a stake in the future. Hint: I see investing opportunities in those.
I see a foundation forming for mass adoption.
Mo’ Money , Mo’ Options For Creators
SuperRare’s Terms:
For primary sales, there is a 15% commission (creators receive 85%). For secondary sales, creators receive a 10% commission (aka royalty), providing passive revenue from an artwork if it continues to trade on the secondary market.
This seems fair.
For now.
Way better than the old distribution systems where artists might get a 15%-30% take of their own creations.
The next iterations of these marketplaces will give 95% to artists, then 99%.
Cooperatives will form to raise funds to commission pieces, paying artists up front.
Add in some bonuses for early delivery.
Those coops will share in the profits of the revenue generated by the NFTs, down to the lowly pleb who could only put in $1 into the fund. He’ll get his pennies every time the piece is sold, transferred, or possibly even viewed.
Everything will be tokenized and highly liquid.
Artists will gladly release social tokens that give you a share of their earnings.
Arists might then buy back their own tokens to increase the market value of their own token, or reap greater royalties.
There might even be derivatives markets for popular artists or art.
My point is, the opportunities are expanding in ways we can’t even know or predict.
The NFT space itself complex adaptive system showing emergent behavior.
Well, How is it Worth Anything?
The decentralized marketplaces coming online now allow for rapid, unstoppable distribution and price discovery.
There can be value in anything. You know: “One man’s trash”
To me, questioning “How is Digital Art Worth Anything” becomes futile in our exponential digital world.
How is ANYTHING worth anything?
Is there a buyer for ANYTHING?
The world isn't going to change to fit one's own definition of value.
With freely monetizable digital art, every nook and cranny of what people value will be explored.
We're going to be very surprised at what and how people value digital things - we'll probably even be disgusted at times.
I’m sure artists will appreciate being able to know their art’s true market value, for better or worse.
Wait 'til AI get's its own opinion and starts creating and bidding on NFTs.
What art does AI want to buy?
Would AI want to buy human art over it’s own kind?
Who knows, I might want to get ahold of some good old fashioned human-made digital art from the roaring 2020s before the AI art drowns out everything in machine learning noise.
Great writing. I’m in the market with something Elon Musk. Think an early piece with him has value for the long term. He will continue to be a key figure with this generation and mystique around the space. Would love an original to what he just posted recently! 👀🤷🏼♂️