NFTs are disrupting the art industry
Why “Crypto Art” is both the next big thing, but also not really that new
In my last two posts, I discussed two seemingly unrelated topics: DogeCoin and the infamous Counter-Strike gambling scandal that featured some CSGO YouTubers. These two topics actually share one key similarity, and that similarity lies here:
What is this, you may ask? For the uneducated, this is a Karambit Fade. A FACTORY NEW Karambit Fade, to be precise. This item, or virtual skin, can replace a player’s default knife skin in Counter-Strike: Global Offensive. As I explained in my previous post regarding “CSGO gambling,” it was these skins that were assigned a dollar value and then gambled on casino-like websites.
This Karambit, for instance, has a current value of around $1260 on the Steam marketplace, but this can fluctuate depending on supply and demand.
That’s right, there are a ton of people out there that would pay $1260 for that knife, just so that they can have it in their CSGO inventory.
But, you wanna know something that’s even crazier?
Someone paid $141,536.20 for this picture:
That picture is known as “EthBoy” and it is an NFT or “non-fungible token” piece of art and someone purchased it for 260 Ethereum in November of 2020 It was worth around $141,536.20 when it was purchased, but because of the rise in Ethereum is now closer to $459,243.20.
So what is an NFT? What does it have to do with CSGO? Or DogeCoin?
Well, simply put, NFTs or “crypto art” are unique digital tokens that get their value from “digital scarcity.” Because of the nature of crypto and cryptography, these digital objects can essentially be attached to a string of code that only one person can hold the keys to. In the same way that someone can hold a digital currency such as Bitcoin in a wallet, they can have unique ownership of a piece of digital art.
The transfer of the art is all powered by the Ethereum blockchain. This allows for “smart contracts” to be created and for the artist that creates the NFT to securely and trustlessly transfer it to someone else, as long as certain conditions are met.
In many ways, this is the same as real art, except it’s digital. Go figure, right?
Similar to NFTs, Counter-Strike skins also possess a unique identifier and a “float value.” This float value contains information on the item’s “condition,” and this virtual condition of the item can raise or lower the price. Technically, there are no duplicate Factory New Karambit Fades, the same way there aren’t two duplicate Honda Accords or a pair of shoes. They are just multiples of the same thing, but not literally two of the same item. The only difference is that with digital items, they are attached to a piece of code or a string of numbers that proves their unique ownership, as opposed to being in the physical realm and literally having it in someone’s possession.
This digital scarcity art-thing has attracted many from around the internet, but also from the real-life art collecting world. The world-famous Christie’s auction house sold a piece of NFT art in October of last year for around $131,250.
Due to the big money floating around and the space and the closing of many art museums and real-life auction houses due to Covid-19, hype, and interest in NFT art has exploded. According to CryptoArt.io, the total value of Crypto Art that has been sold, to date, is a whopping $84,464,040.12. This price obviously fluctuates with the price of Ethereum.
What is art, though?
As impressive as this growth is, it raises some really important questions about art in general. I think that Justin Roiland, creator of Rick and Morty and also a set of NFTs that recently sold for $1.65 million (yes that’s $1.65 million), said it best:
I personally think that NFT art, CSGO skins, and the Mona Lisa that’s hanging in Paris are all “art” in their own right. The idea of what “makes art art” is incredibly subjective and hard to pinpoint. Roiland asks some important questions, and in my opinion “art” is not something that can really be defined. It’s a feeling, it’s both objective and subjective. Art is whatever you, I, the artist, or whoever defines it as.
As unsatisfying as that may be, it remains true that the idea of creating things like digital art that can be displayed in a virtual-reality museum and be worth millions and millions of dollars is just as funny as it is shockingly amazing.