Cryptocurrency and the New Age of Art

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The traditional world of art may be going digital this summer

Kevin Sohn, Staff Writer

The word “cryptocurrency” brings to mind many things: a chaotic and unpredictable market, overnight millionaires and tech-geeks. An extremely volatile type of digital money, cryptocurrency has a remarkable history despite its relative youth, and 2021 saw another fascinating story added to its legend—a single GIF of Nyan Cat selling for around $590,000.

Sales like these are powered by a blockchain technology called nonfungible tokens (NFTs), a type of cryptocurrency token that can represent a variety of tangible and intangible items ranging from digital collectibles to crypto art. NFTs essentially verify that the token and the digital artwork associated with it are owned by a single person. By guaranteeing the uniqueness of the art, NFTs allow for a new digital wave of collectibles and bragging rights.

The world had its first taste of NFTs in 2017 with the release of two apps, CryptoPunks and CryptoKitties. Both were games based around trading collectibles, with Cryptopunks focusing on collecting 8-bit characters and CryptoKitties focusing on breeding and selling cute cats. The main selling point, however, was that these two games used NFTs as their verification measure for the collectibles, and were a landmark technology in the cryptocurrency world. This also meant that the actual value of the collectibles could vary significantly with the market value of cryptocurrencies. Because of this, even though the initial reception for CryptoPunks was low, its value would grow exponentially over the next few years, with a purchase in January 2021 totaling to $762,000. 

CryptoKitties, on the other hand, had a much faster growth rate. Within a few days of its public release in December 2017, a total of $1.3 million was transacted, and the highest exchange sold a cat for approximately $117,712. The potential for NFTs to power a new collectibles economy interested high-profile investors, and the cryptocurrency saw an explosive growth in 2018 and 2019 with NFT markets and collectibles popping up all over the internet.

NFTs’ explosion in the world of digital art, however, happened more recently with an artist infamously named “Beeple.” His art, mashing up mainstream culture into weird and often disturbing commentaries on society, received its first extensive auction in December last year, making a whopping $3.5 million in one weekend. The astonishing number caught the attention of leaders in the art world including Louis Vuitton and Christie’s, a famous British auction house that collaborated with Beeple to become the first major house to auction off digital artwork.

After Beeple, the NFT market skyrocketed. Foundation, an online auction house for NFT artwork, made more than $1 million in sales after its start on Feb. 3. Top Shot, an NFT-based card game released by the NBA and the team behind CryptoKitties, saw $43.8 million in sales within just the month of January. And Nyan Cat, a meme that has been floating around on the Internet for a decade, was sold for the price of a two-story house. 

With the NFT market continuing to skyrocket and showing no signs of stopping, cryptocurrency’s prospects may seem limitless. Will the stiff and traditional world of art galleries slowly transition to being completely online? Will every meme suddenly be worth hundreds of thousands of dollars? Or will it all come crashing down? Just like bitcoin, we won’t ever be able to guess in our wildest dreams what kind of future NFTs may bring. But one thing’s for sure: it’s going to be fun to watch.