Why creatives should care about NFTs: a primer

This feature was made possible through Extra Nice and our fantastic Supporters. To discover how you can boost your own creativity, give back to the community around you, and support It’s Nice That through Extra Nice click here.

One fine March day on Twitter, I noticed a three-letter acronym pop up in Tweets on my timeline. “Am...I an NFT?” writes art critic Rahel Aima, accompanied by the pleading face emoji. The question of what this mythical acronym means is a reaction to a few mega-deals racking up millions of pounds that set the tone for how the art world would come to watch its explosion – in awe of its economic impact, confusion as to what it really means and disdain for the slew of ecological impacts that it causes. Today, as the dust starts to settle and sales steadily decline, we can start to wade through the hype and answer these three questions: What are NFTs? Why did they get so popular? And what do we do with them?

So what exactly is an NFT? It’s often difficult to wrap your head around crypto-related concepts when jargon is thrown around by those with skin in the game who want to make these concepts sound high-tech. Non-fungible tokens, NFTs for short, are tokens that certify that a digital object is unique. Think of it like a notarised certificate that says “this thing you bought is unique and now only you own it”. But instead of it being notarised by a person, this certificate is verified through technology that uses computing power to solve difficult computational problems, in turn, certifying that each token is legit.

What does this have to do with art? Since digital files were designed to be copied, shared and distributed, it was difficult to find a way to buy and sell digital art because there wasn’t a way to own an exclusive piece. Now that you can own limited editions, you can start buying and selling these pieces via these tokens. Digital artists now have the ability to sell their art, earning a privilege that artists working with physical mediums have enjoyed for centuries. Artists who put their art on the blockchain are said to have “minted” an NFT. Part of the promise of this new technology is that it connects artists directly with potential buyers on each platform, liberating creatives from gallerists and auction houses. “It is exciting for an artist to be able to say that they don’t need the entire contemporary art world, dealers, art magazines, art theory and everything else to put a stamp of ‘good art’ on their work,” says Joel Gethin Lewis, the interactive creative director at Universal Everything.

How do they work? Though it varies between platforms, each token refers to a file that contains a link and descriptions of the artwork itself. For instance, this is the URL that the NFT of Crossroads that Beeple sold for $66,666 points to. That is, this is what the buyer received. NFTs do not refer to the artworks themselves. The URL above, for instance, doesn’t even point directly to the actual image that was sold. It doesn’t have to be traded via cryptocurrencies either. If someone so wishes, NFTs could be used to buy and sell unique items in online games using Monopoly money as the currency. In the end, it’s just another way to buy and sell a new class of commodities. It’s important to remember that these tokens, though they themselves are simple, exist in an ecosystem of markets, hype and ideologies that complicates their innocence.

But what’s up with all the hype? “Because it makes digital assets ownable, it has opened up the possibility for new markets. Because art industries are so strongly influenced by what is happening in the markets, the fact that NFTs promised to open up new markets is very exciting to the big industry players,” says Ruth Catlow, an artist, curator and the co-founder of Furtherfield, London’s longest-running centre for art and technology. Ruth and Furtherfield have kept a close eye on the development of blockchain and the arts for the past few years, on top of 25 years of work on critical practices in arts, technology and social change. Part of their work is to examine the hazards and opportunities when new technologies emerge, ensuring that we don’t simply reproduce existing injustices as they enter the world. “I think we should all just be constantly streaming into the streets running and screaming at the strangeness of digital technologies generally. The fact that everyone finds everything so normal is very confusing to me,” she says.

“The art world generally has two main intersection points with technology. One is: can it make us new markets? And how can we use those markets to increase money flows or attention flows? The other is the art world in service of technology. So art as demonstrators and illustrators of technology as a way to promote the technologies themselves,” Ruth says. Ruth looks cautiously at the influx of artists who are minting NFTs to start selling their digital work: “We have communities of people who have no critique of market dynamics. It’s kind of thoughtless libertarianism, this idea that if you make something of merit and you can put it on a system that has no gatekeepers, then you have a living. And that is frankly really naive. And a lot of people got very burnt and exhausted because they took that approach.”

This is a point of concern shared by artists who themselves have minted their own NFTs. “From personal experience, these platforms have enabled emerging artists to get the financial support that they wouldn’t have been able to otherwise. On the other hand, it seems clear that some of the very same platforms aren’t sustainable in the long term,” Joel says. “I think it’s important to distinguish between art practice and the contemporary art market. Art practice has been going since time immemorial, whereas the contemporary art market is a far more recent invention. There is always a risk when participating in any market, you might not get on with other stall-holders, there might be a fight in the market, there might be a storm, you could get robbed and the like.”

The explosion of NFTs via the headline-grabbing multimillion-dollar deals could be attributed to a canny understanding of the hype cycle rather than the artistic liberation that NFTs promised. Joel notes that many who are cheerleading the rise of NFTs have vested interest in seeing it grow and continue, that we should always follow the money when it comes to these big-value sales. For instance, the buyer of Beeple’s Everydays piece that sold for $69 million, Vignesh Sundaresan, is the founder of the world’s largest NFT purse named Metapurse and an active player in the cryptocurrency market. “I think there’s a really interesting parallel between the Beeple sale and Damien Hirst’s For the Love of God. Beeple was part of the consortium that bought the artwork, so that they can then go on and continue to re-tokenise and re-extract from it. Damien Hirst was in the consortium of people who built For the Love of God. So a similar kind of play was at work, a play with markets essentially,” notes Ruth.

NFTs also have a worrying impact on the environment. The most common way used by the biggest platforms to verify the validity of these tokens, called Proof of Work, is energy inefficient by design in order to deter large-scale attacks on the system as these attacks will require high volumes of energy to execute. These protocols are what enable these platforms to function without a third party and are core to how platforms like Ethereum works. By various estimations done by artists, depending on the platform and calculation method, the environmental cost of a single NFT transaction that involves a round of minting, bidding and sale could be equivalent to weeks or months of an EU resident’s power consumption. One artist, who created over dozens of NFTs, was calculated to have created a footprint of over 160 tonnes of CO2 through these transactions.

Other protocols of minting NFTs like Proof of Stake, which consume less energy per transaction, do exist. However, critics point to the fact that Proof of Work platforms like Ethereum rarely fulfil their promise to shift to this less energy-hungry protocol as a reason why the ecological issue with NFTs should not be taken as a solved issue. Artist Everest Pipkin goes so far to argue in their blog post that the art world should steer completely clear of NFTs due to this environmental impact, mentioning that anything less “holds up the power of the worst parts of this platform”.

However, Ruth sees some promises in the critical participation of artists in the blockchain world. “I think that every human needs to be concerned about our impact on the environment. I think that we need to be lobbying like hell at any place we can, including at a governmental level, though that would get a lot of crypto people spluttering into their coffee,” she says. “I just genuinely think that artists in this space are a really good thing. If they weren’t, you wouldn’t be asking me these questions. And therefore these financial technologies might continue to burn up the planet and fewer people would know to even ask about it.” Standing at a complete distance from these technologies runs the risk of handing over a very powerful technology to people who will shape the world in the way we don't want it to be shaped.

“In blockchain, the fact that people need to say ‘Is it a Proof of Stake chain or is it a Proof of Work chain?’ is a brilliant thing,” she adds. For her, the positives emerge once we look at other art worlds outside of those who want to cash in on the gold rush, the communities that have been bubbling underneath who are building platforms that often look more like communes than market platforms. “So the real positive stories coming out of this are that you’re starting to see artists critically thinking through the design of financial systems as an expressive medium, as a social medium, and boy, do we need that!?”

Ruth mentions Hic Et Nunc as a promising example, a platform built on the Tezos blockchain that uses the Proof of Stake protocol. Auriea Harvey, a Rome-based 3D artist who works with simulation and sculptures, mints her work on this platform. “Even artists who are big on the Ethereum-based platforms drop editions there just because it’s a bit more fun to be there. More like a community. The emphasis is on the work rather than the money,” she says. “I have found it freeing to have NFTs as an option. Suddenly, digital work doesn’t have to be a hard sell or something I have to make people understand ‘why it’s art.’ They are coming to understand how and why to collect born-digital works and that’s wonderful!”

Auriea is also part of a large group show called Pieces of Me, curated by Wade Wallerstein and Kelani Nicole of Transfer Gallery, that serves as a kind of experiment on how NFTs can be structured to benefit the artist. “The curators have a very artist-focused vision about the show so we are playing around with paradigms that haven't ossified yet into precedents! If my work sells, I get 70 per cent of the profit and the other 30per cent is split among everyone in the show,” she says. The exhibition features artists like Harm van den Dorpel, Lawrence Lek and Keiken and looks to invite a dialogue “about more equitable markets, custodial care, and contextualising efforts in crypto-focused art” as mentioned on the exhibition website.

This reflects an important position that artists who participate in minting their work via NFTs should take: a critical one that steers these platforms for the better. From Dada’s work with mass communication systems, Situationism building theories on the relationship of TVs and power as well as the net artists who wrote themselves into art history by challenging the structure of the internet, artists working with NFTs need to understand exactly the stakes that are at play and the ecosystems they want to create. It is not enough to mint glitch art and call it a day and those doing it without much thought risk our futures with the environmental load that most of these NFTs bear. “Don't go into things hastily and headlong. It’s the same thing as if you were going to walk into a gallery and think about working with a gallerist. You'd research them, you'd find out if they weren't an ethical, decent person. I would definitely spend some time looking at alternative platforms,” says Joel on what creatives should think about before diving into minting their first NFT.

From the environmental impact that each platform incurs, the rights that artists have to future sales of their work and the communities that they decide to be a part of, a critical engagement with the medium is just as important as the aesthetics of the work produced. With promising communities like Hic Et Nunc, Casey Reas’s Feral File and collectives like Guild.is, it is ever more important to steer the crypto world into a sustainable future. “People should not forget that they are the web. That they can make the web. You do not need these platforms, with a bit of coding you can make your own,” Auriea concludes.