The variety of mediums offered as NFT art means that it attracts a wide cross-section of creators. “Also, the creators themselves have been largely unknown to the traditional art world, and have emerged out of the cryptocurrency, video game and music industry. To define NFT art will probably be as difficult as to define what is art or what is not art,” said Petterson. “I believe as the traditional art world and artists start to embrace NFTs, a clearer picture of how we would define NFT art will emerge. Maybe it will become an art category or a new ecosystem for digital and physical art.”

And there is already a lot of buzz around NFTs. “More than anything it’s a stark reminder that art is ever-evolving and thrives even in the virtual world, which is something we never thought would be possible 10 years ago,” said Stéphane Le Pelletier, the Asia Pacific director of Opera Gallery. He feels NFT art provides a platform and an additional source of revenue for artists while creating a virtual space for creatives to share their work in ways that are more accessible than ever.

“Scarcity is what drives prices and blockchain allows for it,” said Clare McAndrew, a cultural economist and author of the Art Basel and UBS Global Art Market Report. “With so many people stuck online since last year, it is also the perfect storm for the NFT art market to flourish.”

The trend is not without its problems, however, especially for art galleries. “With the novelty of this new mode of art transaction comes its fair share of contentions surrounding issues such as ownership, copyright and artist integrity,” said Le Pelletier. “We hear about works tokenised into NFT without the original artists’ consent, allowing minters to profit off the work without the permission of the copyright holder. An example being the attempted sale of a digital copy of Basquiat’s Free Comb with Pagoda, which was quickly intervened by Basquiat’s estate.”

These factors give pause to many, like Le Pelletier, at least for now. “NFT art is not something that we would like to dive into just yet, due to the uncertainty and lack of regulations surrounding NFTs. Our current inventory includes modern and contemporary artworks, many of which are masterpieces that cannot and should not be replicated in any form,” said Le Pelletier. “There is a lot more work to be done before we can safely and sustainably move into the digital realm … As for the future, who knows what art in the digital age has to offer?”

Petterson feels the NFT market could allow galleries and artists to tap the huge wealth in cryptocurrency that has been generated over the last year and a new generation of investors, collectors and buyers that are emerging from that world.

“It also provides galleries with an alternative commercial platform for artists who already work in the digital medium, and allows them to develop a new market for digital editions, which has been a small part of the art market before the arrival of NFTs,” said Petterson.

In March, Almine Rech Gallery worked with French artist César Piette to launch a series of limited edition NFTs, also on Nifty Gateway, with prices ranging between US$250 to US$799, and Petterson believes others are likely to follow suit.

Petterson believes NFT art also has many benefits for artists. “For those working in the digital art medium, the NFT market can create opportunities to build new communities and fans and to allow them to find alternative ways of monetising their artistic output outside the traditional, often limited art market,” he said. “NFTs have the potential to open a new market for digital. Another important aspect of NFTs are artist royalties, which can be embedded in the smart contract and ensure recurring revenue for artists on all future resales.”

Those that deal with NFT art agree. Liu Jiaying, an artist known as CryptoZR, has been using blockchain technology for art since 2016. Liu sells her NFT art through TopBidder, a platform she launched with her team to implement a production and auction mechanism using non-permanent cryptographic assets known as Radical NFTs (rNFTs). TopBidder adopted the “Radical Market” theory, put forward by Eric Posner and E. Glen Weyl, to modify the underlying agreement for NFTs.

Liu says the modified agreement gives NFTs more potential: “In an rNFT auction sales on TopBidder, all parties will gain a 30 per cent benefit in the price difference in real time. This includes galleries, collectors, investors, bitcoin miners, scientists, contract engineers. Everyone can participate.”

“The copyright protection as well as the way the profit is divided among creators, participants, initiators under the transaction agreement in CryptoZR’s TopBidder are unprecedented, which is not possible to do via traditional agreements by an institution or an individual,” said Li Zhenhua, Art Basel Hong Kong’s film curator. “What is at stake is how trading in a fund market has been applied, which cannot be done through conventional financial systems. Gaining benefits is a widely recognised goal for all participants. Art and their financial attributes are a new method of value identification.”

Liu sees the dawn of blockchain-related art as inevitable. “I believe with the booming of the blockchain field, blockchain technology-based art is inevitable. The physical and blockchain worlds are parallel worlds, while cryptoart and art in the physical world are also developing in tandem,” she said.

But the commercial roots of NFT art make it unique as a hybrid of the investment and art worlds. “First and foremost, NFT is a financial product, and is now also an artwork. While being an artwork itself is a unique feature, its core is a financial token. If you try out CryptoZR’s auction platform TopBidder, you will immediately know what the investment potential is, as well as the recent upward trend of bitcoin and Ethereum,” said Li.

“NFT is a type of cryptoart that is the easiest to understand and the most accessible to the public. As for its investment potential, I believe we have to first solve its liquidity,” said Liu. This blend of art and commerce lends itself well to exploring certain themes. “For example, CryptoZR’s works including Small Goal, Private Currency ZR, Greed is Good, ChiJin were all produced based on blockchain tech to explore the possibilities of a decentralised financial system, and the public psychology and artistic concept,” said Li.

 For others, the medium is the message. “For several years I’ve been interested in the potential of using blockchain technology and Smart Contracts to create a time-based, evolving artwork. In late 2019, I first met the owners of Nifty Gateway, Tyler and Cameron Winklevoss, to discuss using this technology to expand into the realm of digital art,” said Daniel Arsham, an American contemporary artist. “I often explore concepts of time and transitioning into the NFT space to create durational works that transform over many years is a natural progression of my studio practice. This series of sculptures, which employs NFT as its medium to allow the works to slowly respond to the effects of time, could not be realised in any other space.”

Like it or not, NFT art is here to stay. “The NFT world will continue to expand as the available technology evolves. Artists effectively leveraging the technology will further reinforce the importance of this space,” said Arsham.

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