The boom in digital art: this JPG file sold for 58 million euros

It was another day like the rest of the Christie’s auction house. The lot put up for auction had a bid base of € 84 and the bids began to fall. A few seconds before the end, the track “Everydays – The First 5000 Days” reached 30 million. Suddenly the value rose to almost 58 million euros in an avalanche of tenders. The phrase: the work of art does not exist.

We need to explain it better: it’s not a tangible piece of work to hang on the wall. It is the most valuable creation by digital artist Beeple. It not only surpassed the record value paid for a digital piece, but also surpassed the value of other renowned works by classical artists such as Picasso, van Gogh, Rothko or Manet.

Mike Winkelmann, the artist behind Bleep, has automatically become one of the most valuable artists still alive. “Everydays – The First 5000 Days” is the third most expensive work of art that an artist has sold in his life, surpassed only by Jeff Koons and David Hockney.

What kind of work is that? Well, it’s actually a simple JPEG file, the most common type of file for sharing images. All digitally created images that Bleep has released online since 2007 are glued to it.

The auction, which took place online and ended on Thursday March 11th, was seen live by around 22 million people. A sign that the new trend in digital art could soon break records.

Banksy’s work destroyed to make a digital copy

There is more to this mere digital image file. It is an NFT, a “non-fungible token”, ie a type of non-fungible (or non-fungible) token or code that not only guarantees the authenticity of the work, but also who it belongs to – similar to the technology for cryptocurrencies, blockchain used for transactions and certifications in this new art world. The work was of course paid in Ethereum cryptocurrencies.

What is an NFT?

This is where it gets more complicated. When we understand that a fungible good is one that can be exchanged for another of the same kind, we can say that precious metals like gold or silver, or even physical notes and coins, are physical fungible goods. There are also digital fungible goods such as cryptocurrencies.

In the case of NFT we are faced with the opposite case: Unique goods like a painting or a house are unspeakable – in the case of physical goods. And finally we come to the category of Beeple’s work, that of non-physical, non-physical objects: goods of unique value that cannot be exchanged for something of equal value and that are intangible, that is, tangible.

Anything can be turned into an NFT: images, gifs, videos, or even a tweet – that’s exactly what Twitter founder Jack Dorsey recently did, who turned the platform’s first tweet into an NFT that will be auctioned on March 21, and more than 20 million euros.

These can be unique creations or, for example, collectibles. With this technology, the creator can also limit its use or distribution at the beginning – or guarantee rights, that is, receive a percentage of all sales of the work that will be celebrated in the future. There are currently some issues with this format. There is a chance someone could create an NFT for a digital asset they didn’t create.

And like cryptocurrencies, NFTs use blockchain technology, which raises some environmental concerns. Digital certificates are inviolable because they would require such a large decryption capacity that it is almost impossible to breach.

These transactions require large amounts of energy, that is, computers with high processing capacity that naturally consume energy.

“The joint NFT has a CO2 footprint of around 340 kWh. An NFT footprint can represent the total energy consumption of a European citizen for one month. The emissions correspond to driving a car over a distance of 1000 kilometers, ”reveals the digital artist and engineer Memo Atken.

The digital art boom

On March 3, Burnt Banksy, a group of anonymous artists, burned the original illustration of Banksy’s “Morons” on YouTube. Before that, however, the work was converted to an NFT with a digital copy.

After the original, which was worth tens of thousands of euros, was destroyed, only the digital version remained, the value of which rose sharply. The NFT sold for more than € 380,000 on the Open Sea market, tripling the value of the original physical version.

Beeple’s record piece wasn’t the only digital work the artist sold. A 10-second video was bought for more than six million euros in February – after it was originally bought for more than 60,000 euros in October.

This speculative digital art market isn’t exactly new. In 2017 digital pictures of cats were already sold, which reached an increase in value of thousands of euros. Of course, the big brands wanted to step into this new madness too.

CROSSING
From @beeple

The number 1/1 of Beeple’s first NG drop has just been resold in the secondary market for $ 6.6 million.

History has just been made.

Congratulations to beeple and of course @pablorfraile for the sale. pic.twitter.com/mTYG4VABSw

– Nifty Gateway (@niftygateway) February 25, 2021

The NBA was one of them. The new American Basketball Federation project created the NBA Top Shot, which creates NFT collectibles. A video of a LeBron James Slam Dunk sold for more than 200,000 euros.

Another example: The Kings of Leon were the first band this month to release an album in three NFT formats with prices starting at € 40.

For many, especially creators, NFTs are the easiest way to ensure that artists are paid to distribute their work on the internet – something that is difficult to control to this day. However, critics warn of the possibility of a speculative bubble.

The main buyers of these works are mainly cryptocurrency fanatics and people with extensive assets in these digital currencies. Then, reveals CryptoPunks’ John Watkinson, “the rich species of Silicon Valley” came along. “If you have one of these rare works, it has a special meaning.”

The art collector Sylvain Levy was also skeptical of the New York Times: “I don’t have the necessary software in my head to understand what’s going on. Art is no longer a relationship to an object. Now it’s about making money. I’m sorry for art. “

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