The arts have long grappled with their place in the digital paradigm. Visual art, design, and music are simultaneously the linchpin of the virtual landscape and some of its primary casualties. While artistic output has never been more accessible, it faces a host of unprecedented market failures: musicians are beholden to low per-stream revenues, illustrators are underpaid, and freelance writers struggle to eke out even a meagre living.
With this prognosis, the promise of disruption and decentralization offered by 2021’s buzziest acronym—NFTs, or non-fungible tokens—seems messianic to a nascent class of techno-optimists who seem eager to come to the aid of the starving artists among us. Unfortunately, however, NFTs look to be more like an expression of venture capitalism and commodification than a salve to the world’s ailing creative industries.
Put simply, non-fungible tokens are unique digital assets that clearly delineate their ownership through metadata held on a blockchain. A blockchain can be best understood as a digital ledger that chronologically records transactions (or other information, like contracts). These records are immutable and can be viewed by anyone, allowing for transparent attributions of ownership.
Blockchains can be private or public, the former limiting participation in the network, and the latter decentralized. In decentralized economies, there is no middleman. Instead of banks distributing assets from one place to another on a client’s behalf (and taking a cut), members of the network execute their own transactions, often utilizing cryptocurrencies, and rely on the blockchain to certify their validity.
Cryptocurrencies like Bitcoin and Etherium are already mainstays in the digital economy, but NFTs are the new kid on the blockchain, at least in terms of popularity (despite their newfound buzz, NFTs have been around for several years). NFTs, often housed on the Etherium blockchain, confer ownership over typically digital items along with unique digital metadata that confirms you’ve gotten the real deal.
Digital art NFTs have made a splash recently. On February 22, a work by Mike Winklemann, an artist who goes by the name Beeple, one of the biggest names in the fast-growing crypto art market, sold his work “Crossroads” for $6.6 million, making one buyer the lucky owner of a short clip of unphased avatars walking past a giant, defaced, naked Donald Trump.
Music-based NFTs are also gaining acceleration, with Kings of Leon reportedly becoming the first band to release an album as an NFT. In fact, the album will be released widely through the usual channels, but savvy ‘fans’ will be able to buy ‘perks’ along with their NFT album, such as corresponding artwork that will not be available elsewhere. The release follows an unprecedented boom in sales during the month of February where, according to music business journalist and researcher Cherie Hu, monthly NFT music sales jumped from $866,078 USD in January 2021 to almost $22 million in February.
Beyond trades and deals, NFTs and blockchain have received fawning praise as an unprecedented opportunity for artist growth and inclusion in the marketplace. They have even been hailed as a ‘holy grail’ for musicians trying to escape the clutches of streaming companies, and a new pathway for artists to forge a following. But can NFTs actually provide twenty-first century artists with a modicum of what they’ve sorely been missing—namely, a route to decommodifying and reclaiming the intrinsic value of their work without seeing it reduced to a speculative asset and ‘digital social experience.’
Techno-optimists betting on the arts’ upcoming paradigm-shift-by-NFT base most of their predictions on two of the technology’s overarching properties: decentralization and ownership.
In a decentralized marketplace, artists can be paid for their work directly, quickly, and accurately, avoiding cumbersome processes like royalty payouts. The decentralized power promised by NFT markets lies not only in their sidestepping of financial intermediaries, but their ability to bypass any intermediary in general. In the fine-art world of auctions and fairs, an opportunity to ‘go it alone’ in a potentially lucrative secondary market is welcome to any artist tired of being told what the value of their work is—or not getting their foot in the door in the first place.
Away from auction houses, agents and tastemakers, the draw of selling directly to interested buyers is undeniable. Artist David Rudnick sold his digital artwork, entitled “Stem,” for 10.8 WETH (cryptocurrency Wrapped Ether, worth approximately $18,600 USD), along with the rights to 10 percent of all future sales of the artwork—a stipulation aided by using blockchain to track any further transactions. Providently inscripted “I’ve had this dream for a long time,” “Stem” will not be delivered to the buyer’s home or gallery, and is instead a collection of pixels destined for a forever home in cyberspace.
Musicians have been choosing ‘independence’ at an increasing rate, and to undeniable success. Independent musicians are reported to have sold $1.6 billion in recorded music in 2019, and $2.1 billion in 2020. But even in such cases, NFTs give room to trim off some more fat. Streaming revenues are a highly accepted form of highway robbery stacked against musicians, with unprecedented uptake from audiences. Through NFTs, musicians can pursue revenue streams independently of Spotify’s hegemonic grasp, instead offering direct-to-consumer digitals like demo tapes, exclusive singles, videos and artwork. Beyond digital products, ‘Web 3.0’ theorists are forecasting the rise of NFTs based on social experiences with artists and other fans, like private Discord channels and front-row seats at sold-out stadium concerts.
Along with decentralization comes the NFT’s model of commodification: unique ownership. Purchasers of NFTs receive a unique identity associated with their designated good. The individual who bought Rudnick’s “Stem” is the rightful owner of the glitchy, pink-hued rose as much as someone who purchased a cryptocurrency launched by rock band Portugal. The Man—a social token that allows supporters to unlock exclusive content and join, essentially, a fan club for the group. Where one could previously claim an artist resonated with their sensibilities or touched them deeply, they can now share ‘equity’ on that output.
Importantly, NFTs invoke a stark contrast to the cornucopia of online streaming content. Scarcity is built into the NFT model, with the creator setting the number of unique items to be distributed, helping to set the price accordingly. Proponents of NFTs and blockchain markets argue the ownership of these scarce commodities to be the missing piece in current patronage models; the bridge that will bring stratified supporters together to a true community of artmaking and consumption. That is, scarcity over true ownership. In practice, anyone can ‘own’ Rudnick’s “Stem”—you just have to right click on the file to download it.
NFT’s true colours
The elephant in the NFT Clubhouse chat room is, of course, the money switching hands. The enormous payouts from NFT purchases have been widely reported, with some selling at more than 1,000 percent of their original price. One could look to any financial publication, venture capitalist blog or crypto podcast over the past month to learn how to cash in on the NFT craze, with articles from reputed financial papers like Forbes titled “Non-Fungible Tokens 101: A Primer on NFTs for Brands and Business Professionals.” Billionaire Mark Cuban has urged those looking to make a buck to go to every musician they know, introduce themselves, and flip their melodies into digital collectibles.
Musician and artist Yaeji’s “Digital Pet” sold to a venture capitalist for $29,000 USD. The description under Beeple’s “Crossroads,” ostensibly written by the current owner, shares the language of a highly-online cryptotrader type: “[shut the f*** up] that this isn’t gonna be worth a f*** ton more… when I have a permanent collection in the MOMA.” While NFTs may have circumvented the ritzy clientele of the art auction, they’ve shown themselves to be, in the words of Stereogum’s Arielle Gordon, “tremendously efficient at replicating the most inaccessible paradigms of its physical predecessors.”
At the moment, NFTs make for appealing investments, with new- and old-brand venture capitalists looking to get in early on products with high scarcity and even higher buzz. To be fair, physical art and music have taken on such a role in the past, such as the financialization of back catalogues including that of Bob Dylan, which recently sold for a reported $400 million, not to mention the speculative art market.
That the venture market, along with big players like Christies, Empire Records, the NBA, and Cuban are jumping on to a train along with some of the world’s most famous artists and musicians—Post Malone, Grimes, and members of Linkin Park, to name just a few—is also a glaring reality.
This is not to say that smaller artists are not trying to take part, however the sudden interest and backing by members of the privileged elite suggests this push to boost and incentivize NFTs is largely isolated to what we might call monied interests. As with Big Tech and its corollaries (and any scheme that seeks to operate within consumer capitalism), when there’s money to be made, the structures surrounding that process are unlikely to be fashioned in a manner that supports the average person. According to the 2016 Canadian census, artists’ median income was $24,300, 44 percent less than all Canadian workers.
If NFTs become widely adopted, it’s not difficult to see a scenario where large sums are circulated as part of an investor-based market catering to famous and buzzy creators, where smaller artists do what they can to stay afloat. While we could point here to supply, demand, and popularity, we should also consider why we continue to seek capitalistic solutions to issues wrought by the system itself. If one were to survey the average artist on their future, they’d likely hear more about the pressures that unaffordable housing and access to health, mental health and dental care place on their practice. The average artist might also be less excited about becoming beholden to a new class of investors who are less interested in art than the profit it generates in commodity form.
Further, crypto-skeptics should be forgiven for looking to not-so-distant history to see how most profit-driven individuals and corporations respond to the threat of environmental catastrophe. Crypto markets swallow significant amounts of energy and emit an estimated 37 million tonnes of carbon annually. In 2018, Ethereum mining used roughly as much energy as the entire country of Iceland.
Proponents of NFTs, blockchain and cryptocurrency promise a transition to a green future, whether through altruism or in an attempt to cut costs. But as trendsetting companies like Tesla jump on the crypto wagon, copycats will follow suit, along with those looking to cash in on new markets like the NFT craze.
Most companies can be expected to pursue cheap costs, and in a world where renewables become an increasingly hot (and expensive) commodity pursued by governments and industry, the success of these incentives is yet to be seen. While trailing into a larger conversation than the future of the arts, environmental impacts must be factored into the characterization of NFTs as a ‘silver bullet’ for the sector.
Concerns surrounding the profit-motive and environmental impact behind NFT technologies are, to many crypto enthusiasts, a lazy, pessimistic argument lacking the foresight to see their revolutionary potential. But even if blockchain’s ‘democratizing’ elements translate into a more egalitarian arts market, and crypto’s environmental issues are solved tomorrow, NFTs implications for the artistic discipline—and how we interact with art itself—is still disquieting.
In a system where NFTs become the norm, the output of artists could be likened to a content farm. In a world where most musicians and painters just scrape by, the suggestion that they must adapt to survive would see a lot of creation not for creation’s sake, but to become a viable member of this new market. Visual artists would either benefit from the same levers of power and influence serving the current high art system, or scramble to peddle their wares in a crowded online market.
It is hard to say how far a piece of digital art could reasonably go in a world with hundreds of thousands of digital art pieces circulating the virtual realm, but reasonable suspicions suggest that the answer is not very far. While these would be the normal consequences of an economic calculus, it is similarly difficult to see how this would be better for artists than any system of exchange in place today.
Even still, the pro-NFT crowd seems to be talking less and less about art as it is traditionally understood, encouraging artists to pivot more toward something akin to an internet influencer. After all, It would be difficult for most musicians to switch to a purely NFT model of production. The framework of scarcity doesn’t allow for the visibility required to succeed in a saturated music business, which would hypothetically want to reach as many ears as possible. For this reason, most music-based NFTs would not centre on the content designated for, say, an album cycle or the musician’s official catalogue.
Instead, crypto enthusiasts, appealing to the behavioural habits of Gen-Z, suggest that the future lies in NFT models promoting ‘social experiences’ like access to a Discord channel or exclusive digital meetups with an artist. This sounds not at all dissimilar from AirBnb’s ‘Experience’ offerings; you’re already at your destination, but why not pay for this bar crawl that can show you how the locals really party in Budapest? Don’t you want the full experience? Are you even a real fan?
NFT fan experiences, along with the sale of other collectibles, are distinct from the artistic output most musicians are notable for in the first place. Practically speaking, it would appear to add a second job onto the average artist’s plate. Conceptually, it would also appear to obscure artistic pursuits writ large, valourizing a cult of personality, relevance, relatability and quick turnover over other more intrinsic values. And while many self-appointed artists are sure to jump on the NFT bandwagon, many are also likely to be deterred by this obfuscation. In other words, most artists would likely prefer to share a feeling with their audience than equity in digital tokens.
How this would be sustainable from the ‘fan’ perspective is also unclear. It’s absurd to think of a scenario in which the avid music listener or art collector is interested in joining hundreds of Discord channels for artists they’d like to support, let alone a musician who has only one or two tracks they really enjoy. Very little currently indicates whether the average person cares to have a digital gallery of online works.
What we can be sure of, however, is that direct-to-artist support has gained traction over the last few years, blockchain notwithstanding. Bandcamp, a website where fans are able to purchase music directly from artists, has shown itself to be a COVID-19 hero. Primarily utilized by independent and lower-profile musicians, Bandcamp started ‘Bandcamp Fridays’ in March 2020, foregoing its already-low share of profits on the first Friday of every month, and to great success. By the end of 2020, artists had made $40 million on the platform. Fans and artists alike love Bandcamp; it’s a simple platform with simple tech and a simple mandate. Why does it need to be more complicated than that?
In describing NFTs as the new paradigm, we forget that the ills put upon the twenty-first century artist extend beyond remuneration. Around the world, cities are facing a creative space crisis, as venues and DIY arts and music spots are priced out of operation due to the rising cost of rent and gentrification. Fundamentally virtual schemes like NFTs may help some artists receive higher pay, but will not do much for the wider creative ecosystem that remains under threat. In the wake of the pandemic, the answer to this crisis and the problems of streaming should have more to do with class solidarity than a new method by which to further the capitalistic churn.
Real excitement and inspiration should be derived from the work of groups like the US-based Future of Music Coalition and the Union of Musicians and Allied Workers, organizations centred on mobilizing artists, arts workers and community members to fight for equitable futures. These groups seek to strengthen and support the arts not through commodity capitalism but by fighting for improved working conditions, enhanced legal protections, and improved education around social issues.
Despite selling “Stem,” Rudnick takes a measured approach to NFTs, conceding that “if this tech remains a marketplace only it will only further inequality.” He cautions instead to “try to establish some norms or values that might have real value moving forward,” or risk letting “the predators define it.” This is a welcome point, albeit one that is a bit too reliant on tech determinism.
Kings of Leon are not necessarily known for their undying artistic integrity, and if Post Malone’s product-placement-heavy Instagram presence is any indication, large artists are likely to pursue lucrative revenue streams whenever they can. But smaller artists need not adapt to the trends that most NFT-based models seem to be taking. If they can find a way to use them to their advantage without shifting the nature of their work and furthering inequality, then NFTs may be useful and even beneficial. Whether such an outcome is possible has not yet been made apparent.
Beyond crypto, Rudnick’s warnings can also be read as a call to greater solidarity and organization amongst artists and musicians. More work needs to be done to set a coherent path forward, where art’s value is separated from its price on a market, and artists have supportive ecosystems to grow and flourish in. Until then, NFTs will have to go a long way to truly revolutionize the arts.
Katerina Stamadianos is a Toronto-based writer, researcher, policy analyst and co-founder of New Feeling, a Canadian music writer’s cooperative.