written by Maurice Cardinal …
NFT chaos is shaking out quickly
As NFT hype subsides, questions from artists about how to incorporate it into their long-term game plans increase. Artists want in, but NFT is still complicated, so artists hesitate as opportunities pass by.
My best advice is to relax.
NFT isn’t going away–seek pro help.
The CREATOR ECONOMY is on the horizon.
Progressive artists know that NFT represents a monumental shift in an artist’s autonomy, but they don’t know yet how it will roll out, or when.
Advanced working ANALOG artists, i.e., canvass painters, drawers, photographers, sculptors et al, are, on the other hand, quickly figuring out how to become part of the excitement and leverage the opportunity.
The reality is that many DIGITAL artists are already making all the right moves, with some scoring big numbers. Over the course of time, artists with more experience making and selling art will percolate to the surface and eventually stake out space that art collectors will find appealing. A select few are already doing it and having substantial success, like Justin Aversano, and Lawrence Lee.
NFTs sales in 2018 were $41 million, and in 2020 jumped to $338 million, with $93 million in transactions in the fourth quarter of 2020 alone. Digital nonfungible token sales in 2021 soared to more than $2 billion in the first quarter according to NonFungible.com. It’s a remarkable increase of more than twenty times the volume of the previous quarter.
For a point of reference, in 2019 the online art and collectibles market grew at a very anemic 4% according to Art.Art. Market growth rates steadily declined from 24.1% in 2015 to 9.8% in 2018. Global art sales fell 5% over the same period.
The art industry struggled for a long time pre-pandemic.
NFT sales in the 1st quarter of 2021 spiked significantly. Although digital made a very strong effort, a lot still has to come together for contemporary analog art to give up the top spot in collectors’ wallets and hearts.
Another reality is that we will never go back to the old art format. Contemporary galleries as you have known them have no choice but to reinvent themselves if they want to survive. Granted, extreme high-end spots will thrive as more and more of the competition falls away, but the old school market will shrink to become very elite, small, and exclusive to the point of wealth secrecy.
Plus, and this is a big one; Even though it is mostly Crypto Geeks currently buying big ticket NFT art, that frenzy will eventually fade. The good news however is that it is not JUST crypto and blockchain industry types currently buying NFT art. Visual artists are also developing supportive communities in ways we’ve never seen.
The challenge however is that this trend must continue until a larger volume of traditional art collectors gravitate into the NFT space. Many are still skeptical, but it won’t take long for them to see the opportunity after watching their collecting colleagues snap up all the firsts. Old school doesn’t quite get the virtual scarcity thing yet, but they will.
It could be a while though before we see any major shift in a digital direction from this very powerful and influential group. I suspect they will only get involved when they see Millennials invade their space. It hasn’t happened in a big way yet, but it’s threatening like a summer thunder storm.
Millennial and GenX are the demographics driving sales of CryptoArt and NFT.
NFTs are bought in large numbers by crypto and blockchain geeks who built the apps and networks that support this new art trend. I’ve spoken to many of them as colleagues. These very forward-thinking software and network developers are incredibly stoked that their blockchain vision to help artists is coming to fruition and actually working. They want NFT to succeed as much as artists because it validates their tech vision, and generates substantial revenue for coders too! Don’t be fooled though. The art market is a very small part of blockchain, only about 3%, which means developers will move on when the next hot application surfaces. It’s already happened in other industries, and art won’t be an exception.
Another reason crypto is so popular now is because institutions are adopting blockchain, which means it’s moving mainstream. When Fortune 100 companies like GE, Walmart, and Exxon use blockchain, the stakes become very serious.
So, is NFT a good thing?
Yep, and for many reasons. The art market is becoming even more globalized and fractionalized, which is also a good thing for independent artists of all stripes. It makes it easier for artists to identify a niche audience in numbers large enough to support a career. Think local, act global.
Analog artists now have the best of both worlds. I shot fine art on large format 8×10 sheet film for almost two decades. I loved that era. I did however, also adopt digital from the very beginning, and I’m still building out decades later. Evolution is a big part of the draw for me as an artist.
Analog painters and film photographers, if they choose, can now digitize and use their canvass and film as an element in digital mixed media WITHOUT IMPACTING THE VALUE OF THEIR ORIGINAL ANALOG ART. Anything goes today. Consequently, if you’ve ever wondered if there’s a market to take your canvass or film into the digital realm, it arrived last month. If, you do it properly, it’ll enhance interest in your analog art, which is a good thing right?
Artists today are learning that NFT marketing to the masses using a shotgun approach doesn’t work unless you’re already a mega star with millions of followers. A better solution is to fine tune your campaign and focus on collectors who have already expressed an interest in your specific art, or at the very least, your style. The beautiful thing about NFT is that it is fundamentally designed so artists can narrow their focus and form relationships with collectors that have the same creative impulse.
There is however still a substantial number of social media feeds where many artists think that simply posting NFT CryptoArt will put them on the road to riches. They mint, and when nothing happens they question the system instead of their visibility strategy.
On the other side of the crypto coin, experienced artists who have been around for a while are rising from the ashes of an industry burned to the ground by the pandemic. They have a different view of NFT and see it realistically as a marketing and distribution tool that will extend their reach and autonomy.
Artists who will do the best over the LONG TERM are those with extensive creator experience, and who have already established relationships with collectors. Without doubt, today’s NFT excitement is insanely lucrative too, but it’s in the same way that baseball trading cards generate value. It’s based on gamification, which doesn’t have a lot to do with art appreciation at a creative, cultural, or intellectual level where a large portion of the really big art money resides, and where it will continue to live for a while yet.
NFT gamification is closer to gambling than it is to collecting art, but as long as you know the difference, it doesn’t really matter. You can enjoy both art spaces for different reasons.
If you lived through the beginning of the internet, you know that it takes time to wrestle power away from entrenched art enterprises. It took MP3 almost a decade to really have an impact even though it was just as exciting then as NFT is today. Amazon took a few years too to really change consumer minds. Nothing of substance changes overnight. It’s why it’s a good idea for artists to also hold a long view.
HODL is good crypto and art advice.
NFT hype is a good thing, because no matter your style of art promotion, it all generates revenue for working artists. Plus, it raised the overall visibility of art to unprecedented levels. I’m happy for all artists, analog and digital who are figuring this out in their own way. With so much yet to discover about CryptoArt, it still has a very pioneering feel to it.
Artists deserve a break, even if we have to create it for ourselves.
Artists of all types would do well to recognize that;
1/ The old art world is not inclusive or equitable for most artists.
2/ Artists and collectors are often the target of corrupt art marketers.
3/ The monetary system is not designed to make it easy for artists.
4/ Blockchain and crypto make it possible for creators to express autonomy.
If you at least acknowledge, and endeavor to manage these issues effectively, plus, if you create great art, you’ll put yourself in a good position to move your work to a collector’s wall or hi-res screen.
A big mistake however, made by too many artists, is to ignore the underlying framework of NFT. You don’t need to know everything, but understanding the basics of blockchain, Bitcoin, cryptocurrency exchanges, plus, what terms like immutable, ETF, and IPFS on the distributed web mean, will help considerably whether you’re an artist or collector. NFT art is connected holistically to the entire network, which means that the health of your art is directly proportional to the backend and to cryptocurrencies.
Coinbase just issued an IPO, which means that you can now invest in the largest crypto exchange in the world using fiat or crypto. The Coinbase IPO is a turning point for crypto. It’s the first time a public company has its value tied directly to Bitcoin. The question about what happens to Coinbase value when Bitcoin moves up or down remains to be seen.
NFTs intrinsically are not about getting rich quick, although that certainly is the fun part for some investors. I’ve been in this market for a few years and some of my art investments have grown by over 5,000%. Basically though, all I did was show up. I was lucky because I came from blockchain and FinTech development several years ago, and have an inside view of why NFTs are so popular today. It’s not what most people think.
The two most important aspects of NFT at this juncture are that it is an immutable way to certify artwork and register authenticity. This is a very big deal in a world that staggers under the weight of constant forgeries and corruption. The second aspect is that NFT has the potential to deliver an easier way for artists to get their work in front of collectors who have a deep appreciation for their art. Artists literally no longer need a middleperson, and instead can be approached by, or reach out to collectors directly. Artists now also have an opportunity to form very long relationships with collectors who buy art on a regular basis.
The secret, is that there is no secret except good old hard work. The hardest working artists in show business are those who have been in the game for years and who already understand and work branding and promotion campaigns.
My long-term money is on this group, because it’s a safer bet.
I do however invest in the trending hype of NFT because it’s like gambling, but way more fun and lucrative than playing a one-armed bandit. I also feel that at the end of the day, even if I didn’t make any serious crypto, I helped a fellow artist move a little closer to autonomy and nirvana.
Helping artists … feels incredible.