On March 11, a collage of 5,000 digital images by Mike Winkelmann, a digital artist better known as Beeple, was auctioned at Christie’s. The sale price of $69 million put Winkelmann among the world’s three most valuable living artists.
What Winkelmann sold wasn’t the image itself. The millionaire buyer didn’t walk out of an auction room with a giant painting that they could hang on their living room wall. They bought a non-fungible token, or NFT, representing the image. In effect, what they paid almost $70 million for was the right to put their name in a ledger attesting to their ownership of Winkelmann’s work. Anyone can still open Winkelmann’s image on their computer. They can even print it, in the same way that they can view and print a copy of the Mona Lisa. But only the buyer of the NFT can say that they own Winkelmann’s image.
Because that ledger is supported by blockchain technology, it can never be changed or forged. A future buyer of that one-of-a-kind token will always know that it’s authentic, that it represents Winkelmann’s work, and that the seller owns it. An NFT solves one of the problems that has long plagued the art world: proving the provenance of valuable works of art. It also solves a problem plaguing digital art: ensuring the scarcity value of a digital file.
The rise of NFTs then should be a huge opportunity for artists, particularly digital artists. Before the development of the blockchain, Winkelmann had sold prints—but never for more than $100. For artists, NFTs should be a way to break out of their bare loft studios and finally make a good living out of their talent.
If it hasn’t yet worked out that way, it might be because of the cost of creating—or minting—those NFTs.
Shortly before Winkelmann’s sale, Allen Gannett, author of The Creative Curve, a book about creativity, decided to find out what exactly is involved in turning a creative work into a commercial NFT. He found the process complex but also surprisingly expensive. Gannett’s NFT would be written onto the Ethereum blockchain, the most popular blockchain used by NFT platforms such as Rarible and SuperRare. Using that blockchain requires a payment, called a “gas fee.” The payments are made in ETH, the blockchain’s own currency. The size of the gas fee needed to create an art collection on Ethereum depends on the network’s congestion rate at the time.
Gannett found that he’d need to pay .67 ETH—or $997.