How crypto artists are cashing in on NFTs while courting controversy

Last week, the artist Ben Mauro was dividing his pay cheques into three categories: rent, food, and art. Now, suddenly he is a multimillionaire.

Mauro, who has created concept art for films including The Hobbit and video games such as Halo, is newly wealthy thanks to the phenomenon of non-fungible tokens, or NFTs. These tokens are a type of cryptocurrency, similar to bitcoin, but each one is unique and cannot be replaced or replicated. They have grown popular among digital artists because they serve as certificates of authenticity. In the online world, where anyone can replicate images an infinite number of times, NFTs allow artists to create a stamp of ownership. With ownership comes value.

Over the past few months, NFTs have exploded in popularity as cryptocurrencies gained mainstream acceptance. Collectors dished out more than US$60 million in February for gifs, jpegs, memes and other art that is only available on a screen. Video game artists, who are native to digital creations, have embraced the phenomenon. Raf Grassetti, the art director of the popular video game God of War, has been selling 3D models of celebrities like Tesla Inc chief executive officer Elon Musk for tens of thousands of dollars. Halo Infinite art director Nicolas Bouvier sold a painting of a castle Tuesday for nearly US$35,000. And Mauro’s collection of art, which he sold in the form of collectible card packs, has earned more than US$2 million on an NFT website called Viv3.

“I still kind of don’t believe it,” Mauro said. “This whole thing moves so fast. One day, alright, I’m broke. Now I’m a millionaire. Sure, I guess.”

The NFT phenomenon has made some top artists rich, but it has also been controversial in the video game art scene. Critics point to the astronomical energy costs of mining cryptocurrency, which requires high-end computers to operate constantly at full power, as an ecological disaster. Most NFTs are linked to a cryptocurrency called ethereum, which was estimated in 2018 to use more energy than Iceland. The creators of ethereum have been promising for years to switch to a more ecologically friendly mechanism, but that has not yet come to fruition.

Others say NFTs deepen the wealth disparity among artists and that they are prone to scams, since the creator of an NFT does not have to prove ownership of the original work. Already, NFT marketplaces are seeing instances of stolen art and copyright violations.