CRYPTO AND ART GALLERIES NFTs are Digital Deeds...
not jpegs...
Many art gallery owners, dealers, and artists have scratched their heads over why someone would buy something that you can easily right click and steal for yourself. As people FOMO into the NFT space, it would be a good idea to re-evaluate what, exactly, they’re buying. Many wide-eyed investors believe they’re purchasing a jpeg. Their belief is misplaced.
ERC-721 Tokens Are Digital Deeds, Not Jpegs...
For the purposes of this explanation (and for consistency), we’ll focus on NFTs generated on top of the Ethereum blockchain. The Ethereum “Non-Fungible Token” is technically referred to as the ERC-721 token. For a greater understanding of the difference between a coin and a token, click here.
The ERC-721 token is, in essence, just a digital deed verifying ownership of something between two legal entities (whether they’re individuals or organizations).
NFTs are perfect for selling art BECAUSE art is non-fungible. But if NFTs are the answer, it begs us to ask: what was the question? If NFTs exist for their own benefit, then they don’t really solve a problem.
In the case of ERC-721 tokens, it helps to actually scope out and understand their greater purpose.
First, ERC-721 tokens ARE NOT exclusive to the bubbling digital art industry. Although NFTs are currently gaining headlines for their predominant use in transferring ownership of digital commodities (from 3d art to trading cards and virtual kitties), the current use cases are probably something on the order of 1% of the total future use cases. The art industry is an incredibly small sliver of what the greater use cases represent for this technology.
NFTs are better at keeping track of the physical world...
The irony is thick in the non-fungible space, as truly non-fungible items and their associated information tend to be predominantly from the physical world. A jpeg can be copied an infinite number of times. A 2010 Ford Sedan, or a house, or a carrot from the supermarket cannot. The future use cases for NFTs are far more boring and ordinary than their current incarnation would lead us to believe. As something predominantly associated with new digital art and online products, it’s easy to lose site of the fact that they’re better suited for transferring property ownership, buying tickets at a festival, or membership to a museum.
Some of the more interesting NFT projects involve things like tracking airplane maintenance, enhancing transparency for supply chains, and overall data retention through an anti-fragile decentralized network.
Why are NFTs important to the art world?
In the case of the art world, provenance matters.
Tracking and maintaining the history of a Guttenberg Bible’s care (and all of the associated provenance associated with it) is more difficult than we might assume.
If the provenance for something valuable is kept solely on paper within a secure location, one could argue that it is in many ways more secure than provenance kept within a digital space. Servers go down all the time, whether through breeches in security or neglect from IT staff. Compounding this issue is the need to either migrate data over time or emulate the original environment the data was first created in for perpetuity.
On the other hand, buildings periodically burn down, along with all of the secure documents inside them. And what about cases where both the paper documents and the servers housing their digital equivalents are housed within the same building? It may seem a tad paranoid to worry about such incidents, but they do periodically happen. True, it’s the stuff of an archivist’s nightmares, but the nightmare is based on something that does occur from time to time.
The decentralized nature of a blockchain offers a publicly accessible way of keeping track of provenance on a network of anti-fragile nodes. For more information on how a blockchain works, click here.
The Joseph Nease Gallery is open by appointment only. Our hours are Thursday through Saturday, 12 to 4 pm. Appointments can be made by calling the gallery or by emailing our Gallery Manager Amanda Hunter at manager@josephneasegallery.com. All visitors are to wear masks, and we will be routinely disinfecting common surfaces within the gallery space.
