On Art, Value, and NFTs

In November 2017 Christie’s auction house sold a painting known as the Salvator Mundi for the princely sum of $450 million. The authenticity of the painting, which isn’t very good, was long debated but in the end the painting, and thus its value, were attributed to Leonardo da Vinci and set a record for the most expensive painting ever sold.

This week Christie’s set a new record by selling a piece of “art” called Everydays: The First 5000 Days by Mike Winkleman, who works under the name Beeple, for $69.3 million. This sale makes Beeple the third most-expensive artist alive. What makes this sale unique is that the art is a Non-Fungible Token or NFT. NFTs are simply another form of cryptocurrency that use the blockchain to verify their authenticity and aren’t particularly new but have exploded in value in 2020. Perhaps unsurprisingly the buyer in this case was an anonymous person who goes by the pseudonym Metakovan and is attributed with founding the cryptocurrency Metapurse. As the story goes, Metakovan has made hundreds of millions of dollars off Metapurse and, evidently, has money to burn.

Another example of popular NFTs are the NBA Top Shot franchise. Think back to the days of your youth when Topps, Donruss, or Fleer baseball cards were traded amongst your friends as if in an open outcry pit trading pork bellies, bad chewing gum notwithstanding. NBA Top Shot is the digital version of this, with basketball highlights being licensed by the NBA as NFTs but valuations reaching five and in some cases six figures.

While I do find the entire NFT phenomenon fascinating and perhaps a flashing red light signaling a global economic bubble, that isn’t the subject of this essay. Instead, I want to explore what we consider art and how we assign it value.

As I noted at the beginning, Salvator Mundi isn’t a very good painting and for many years was believed to be, at best, a bad imitation by one of da Vinci’s students. The painting sold as such at auction for $10,000 in 2005. But after extensive conservatorship, scholarship, and debate, the painting was determined to be a da Vinci making it one of only 20 known works attributed to him and the only one in private hands. Its value is a function of its scarcity as well as its maker. Leonardo da Vinci stood in front of this canvas, with furrowed brow, and applied the paint himself. His breath settled upon the wet image as his consciousness and creativity brought it into being. I can imagine him, the sun is setting through the windows, contemplating the image, wondering if it was worth continuing, wondering if he would ever get the paint to flow as it did in his mind. It is that process and not so much the work itself that creates the value of this work. In many ways, pieces by da Vinci are in fact priceless and the $450 million that changed hands when the gavel fell might as well be $450 billion to most of us and it is not difficult to imagine the day when a noted work changes hands for $1 billion.

The best art, even when it isn’t particularly good like the Salvator Mundi, creates an experience in us that is what I think drives art lovers. I think about another da Vinci piece known as The Burlington House Cartoon which hangs in The National Gallery in London. I first saw it on a trip to London in 2001, during that fateful week in September when I traveled to visit my parents. I spent an afternoon in the city alone, not worried about finding my way anywhere in particular. I walked through galleries and garden parks, through side streets and boulevards. Somehow I ended up in Trafalgar Square and then the National Gallery. The National Gallery is a beautiful space, with quality if not quantity, that rivals the Louvre. My memory is a bit fuzzy, now nearly 20 years on, but I remember vividly the first time I saw The Burlington House Cartoon. It is a drawing, not a painting, likely a study piece for other masterpieces to come. Fairly large at nearly 4.5 by 3.5 feet and dramatically lit, the physicality of da Vinci, working in charcoal and chalk, is unmistakable. Where sometimes paintings can be so perfect as to distance themselves from the humanity of their creator, this drawing is clearly of human hands. And its exquisite. You can feel the movement of da Vinci’s hands and arms across the paper, the quick but controlled strokes as he blocked out the figures of the Virgin Mary, St. Anne, St. John the Baptist, and the Christ child. There is an intensity in this piece that grabs you by the soul and refuses to let go. In the National Gallery on that afternoon, I stood in front of this piece and wept. I was literally moved to tears and even now, as I write this, I have goosebumps on my arms.

Art can do that and that is part of its value.

I certainly believe that art is more than just paintings or even visual art by the Great Masters or others. Music is most definitely art. I think about a live performance by Diana Krall I once attended. She and her little band played admirably that night, hitting every note, making the gathered audience feel the swing. But as good as it was, to me the art was made when her band took a break and walked off stage to smoke a cigarette and, perhaps, sip a little something to get them through the rest of the set list. It was then that Krall, still sitting at her piano, turned to the crowd and said, “So what do you want to hear?” For 10 minutes, 15 minutes, maybe an eternity, she took requests shouted out by the audience and they ran the gamut. She did not play every song perfectly or completely. But there was not a single request that she didn’t play. In that moment I witnessed virtuosity.

That is what attracts us to art and that is part of its value.

In a different way, I believe books can be art. Poetry, prose, literary writing, it can all be art if approached, by the writer and the reader, as such. But of course the way in which we experience each of these forms of art is different. The da Vinci Cartoon moved me to tears in person but viewing it online from the National Gallery’s website leaves me nostalgic but wanting. I cannot experience it in the same way without being in its presence and even though the Gallery will sell me a tastefully made copy for around £30, it isn’t the same, is it? The Elder Sister at the Museum of Fine Arts in Houston, The Moorish Chief or The Gross Clinic at the Philadelphia Museum of Art, being in the presence of these pieces is part of the experience. In the same way I can play a recording of Diana Krall on my Bose Wave Radio in the comfort of my living room and enjoy it, but it isn’t the same as seeing her live, is it?

There is an intangible tangibility to experiencing a piece of art in person, be it visual arts or performance art, that is part of its value. The scarcity of the experience is part of its value.

Somewhere in the middle, perhaps, would be the work of an artist like Andy Warhol. Warhol was a tremendously prolific producer, but much of his most well known works, the Campbell’s Soup Cans or images of Marilyn Monroe, were screen printed. Screen printing is the same production method used to print images on cheap t-shirts or high-quality posters. There’s nothing wrong with the technique, but it is a mass production technique and when it comes to its use in art that is assigned high monetary value we have to ask why? The answer in the case of Warhol, is that meticulous records have been kept that can be used to validate that this Campbell’s Can did indeed come from Warhol’s studio and is not a Chinese fake. This Campbell’s Can was part of a limited run and although Warhol could have produced thousands, he didn’t, and instead used screen printing as a way to create an artistic effect, rather than to create volume. It’s less about the art and more about the provenance, about proving whose hand spread the paint…just as it was with Salvator Mundi.

And so we return to NFTs. At the beginning of this essay I put the word art in quotations in reference to the piece, Everyday: The First 5000 Days as an indication that I’m unconvinced that this piece qualifies as art as I understand and interpret the word. While we can argue that its design and construction were artful, in this case its assigned value comes from exclusively from its scarcity…but that scarcity is artificial. A digital file can be theoretically replicated an unlimited number of times, but the blockchain can be used to authenticate that this file, this is the first and only and therefore the real one. But it’s make believe. Think about NBA Top Shot for a minute. Someone (artfully, perhaps) had the idea to create a limited number of authenticated highlight videos, essentially electronic sports trading cards, and sell them. The only difference between this and the thousands if not millions of highlight reels on YouTube is that NBA Top Shot videos are somehow justified as being authentic and valuable because they are NFTs and now that value is feeding on itself and inflating to eye popping levels because those trading it now have the expectation that the price will rise. That is the definition of a bubble, isn’t it? With due respect to Beeple (I cannot believe I actually wrote that), his piece in question was similarly endowed with false scarcity while also benefitting from a crypo-king’s loose grip on economic rationality.

Maybe I’m too old and set in my ways, but I struggle to assign the word art to NFTs. I understand the unique and perhaps important ability of the blockchain verify, authenticate, and track the provenance of electronic files and can see its utility for financial and real estate contracts. But the ability to use it to create false scarcity and some how associate that with both art and value creation seems a bridge too far. Art has to grab us, to move us, to create an experience that will never let us go. Without that you may have a thing that becomes expensive, but now you’re conflating price with value and that tale has been told countless times before and always seems to end in the same way.

10 Replies to “On Art, Value, and NFTs”

  1. I agree. I don’t have the words or ability to describe how stunned I was at the price paid for the NFT. I appreciate the time, effort and ability that went into making/creating it, but for Pete’s sake, $69M!!!!

    1. It’s a stunning sum that may have more to say about the crypto riche than it does the value of the art in question, but that’s a different essay.

  2. So is art by definition physical? I think it is, actually… I remain unmoved by video art, for example – see Video Kills on that score – even though I can think of a half dozen photographs without stetching myself that I’ve seen in galleries that have made me stop and gape. The movies are fun, but are they art in the way that theater, or live performance art, or improv comedy is… dunno.

    Interestingly, the NFT craze is a kind of reductio ad absurdam: note that the value is actually attached to a pure string and its handshake counterpart. It could just as easily attach to this comment. Which may give me an idea for financing the Essence of Water…

    1. No, I’m not arguing the art is physical so much as it is experiential but also, by its nature…rare. The NFT thing is a little like diamonds, in my mind. The only reason diamonds are at all valuable, outside of their industrial uses, is because if a false scarcity. I think true art is truly scarce.

      1. The experiential and rare criteria, though, almost require physicality. The virtual – or digital, to use the older term – is by definition replicable without degradation, so it will never be rare except by virtue of tagging one particular version of it with a blockchain identifier. And experiential is – well, isn’t that in person? Isn’t that unintermediated by the process of projection on a screen, projection by a monitor, subject to the web browser’s zoom in and out functionality and the like? Diamonds, after all, are valuable because of false scarcity and because of their admittedly freakish physical qualities of hardness and brilliance – experiences both.

        But all that isn’t to disagree with your point, or to take anything away from the quality of the essay and the way it provokes us to consider what we mean by “value” in art. I’m inspired. Great effort.

        1. The area of art that is both experiential but not particularly rare is books. Frankly, books are so cheap as to render the art within the pages of many of them devalued. They’re common but most of had the experience of reading a book, a passage, a phrase and feeling lightning struck. We’ve read poems that spoke to our core…but to hear that poem read by its author is an altogether different experience entirely.

          1. That’s a helpful extension of the idea. As I think of it, though, it’s harder to have that experience from, say, a Kindle edition, than from a physical book – even a cheap trade paperback. But at the same time, for those of us who like to wander second-hand bookshops (or used to, anyway), sometimes a volume will strike us as a beautiful object – cover art, binding, paper quality, choice of font and layout – even though the actual work is fairly lame. I have a small shelf of early 20th century Anglo-Indian adventure novels, for example, which are just lovely objects – but the actual words inside are imperialist garbage. I’m not going to let my son read them in his youthful impressionable period, but it is fun to look at them with him.

          2. Without question, but I’d point out that your attraction with the adventure novels is not to the art of the writer but to that of the bookbinder…an attraction I certainly share.

            Perhaps the experience is different for each of us but most of us have large areas of commonality.

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