By Mark Irwin, Interview with Magdalena Gabriel, Dubai, United Arab Emirates, 6 April 2021.
The current art market value is approximately $80 billion USD, placing it as one of the ten largest in the world, while the value of art is trillions of dollars. For hundreds of years art has been sold directly or through galleries and auction houses. Due to the COVID-19 crisis, the world shifted towards trading through the Internet and simple digital designs started selling for large sums of money.
Non-fungible tokens or NFT’s, became established as digital blockchain tokens, that represented ownership of unique items, either digital or physical. In the art world, NFT tokens became the most secure cryptocurrency for digitising art collectibles and they protect the likes of paintings, music and videos; preserving their selling rights, either as complete pieces or as units (in parts).
Popular current examples of NFT art sales are; a flying cat cartoon selling for half a million dollars, the musician Grime’s first digital creative artwork selling for$ 6 million dollars and the Twitter founder Jack Dorsey’s sale of his first coded tweet for $3 million dollars. The price of digital artwork reached a peak when Mike Winkelmann sold a digital painting for $69 million dollars.
What is the impact of digital art and NFT on physical art?
After more than a decade of experience in the art industry, I spent a lot of time reading and researching what influence NFT’s would have on the physical art world. Since the invention of the first wrist watch in 1868, watches became essential to society and their availability became a necessity to every person. I found that the best way to predict the future effect of NFT’s on traditional art, was by using the following analogy: To compare physical art to luxury Swiss watches, and digital art or NFT’s, to mobile phones and digital watches, like Apple smartwatches.
Looking back to 2000, luxury watch sales had reached approximately 30 million pieces, worth $20 billion dollars. These stats were first shaken when Nokia entered that year with a mobile phone and suddenly watch sales fell by 30%. The real shock came in 2010 when the first smartphone and smartwatches appeared and the luxury watch market collapsed, not recovering until recent years. The irony is that the market value in 2019 is one-third less than its value was in 2000.
Based on my study, we expect that the first shock wave on art collectables has started, and the market may be affected by a further 30%. This wave will continue for several years and the physical art market will eventually regain its strength, but unfortunately not many new artists will be able to enter the market during this time. In the event of a second shock wave, with the emergence of faster and more secure technology, the traditional art market may collapse.
In all cases, primary artists will retain their positions, such as luxury watches like Swatch Group1, Richemont2, LVMH3 and Rolex have held their places even today. It is worth noting though, that some luxury watch makers did try to convert to manufacturing digital watches, but failed.
It is safe to say that there will be numerous changes coming to the field of art, with many collectables being converted and selling as NFT’s, but there will still always be famous artists and creators around the world continuing to sell their physical artworks in the traditional way.
In conclusion, NFT’s have great benefits and advantages, the most important of which is the existence of permanent opportunities for all creators and artists to show their creativity and display their skills within the digital art market space, while generating a continuous source of income.
About the Author: Magdalena Gabriel – art expert, artist, Member of the Future Contemporaries Committee of Serpentine Galleries.