Before we try to understand NFT and the Art market, first we have to understand what NFT is. It stands for Non-Fungible-Token. Fungible means easy to exchange or trade for something else of the same type or value. Then, Non-Fungible would be something which cannot be exchange. A photograph of the Atlantic Ocean is fungible let’s say, while the ocean itself is unique and absolutely non-fungible. The NFT works on this principle: to propose a unique object that is not exchangeable with something similar.
The “token” in NFTs represents a specific amount of digital resources one can own, buy, sell or trade. For the first time, digital works could gain rarity and obtain a certificate of authenticity. It is now possible to sell a digital work as an original. Thanks to this system, the NFTs brought about a revolution in the art market. First, for the digital artists, who finally found a way to get paid for their work. Second, for the art world, because the purchase of art has become more democratic.
In this sense, NFT have become a revolution on the Art market and also on the global market itself. By 2020, the NFT started up, generating up to $10 million per day by 2021. The first digital artwork to hit the headlines was the 9 CryptosPunks from Larva Labs, which sold for $16 million. Then it was Beeple’s turn to break all records in February 2021. Everydays: the last 5000 days sold for $69.3 million at Christie’s auction. Then, in November, Beeple created the first 3D NFT sculpture, Human One, which sold for almost $29 million.
These heights that NFT has reached in the last years is mainly because of the interest of artists and investors. Could it be that it is opening a door to the new digital art? Many believe that the phenomenon has reached its peak. While the NFT price peaked in August 2021, it was worth 10 times less in July 2022. A plummet as furious as its rise. What will the future hold? It is still very difficult to predict.