The collapse of FTX is not the end of cryptography and the fine art of NFT –

The collapse of FTX is not the end of cryptography and the fine art of NFT -

The acceptance of NFTs by the traditional art market has been challenging. While some projects enjoyed financial success and critical acclaim, others languished, failed to sell, and were buried under a pile of visual noise. And just as the art world has warmed up to fine art NFTs thanks to thoughtful projects like that of Frank Stella geometries on the Artists Rights Society’s ARSNL platform or Peter Wu’s digital exhibitions at the Epoch Gallery, the crypto landscape has seemingly collapsed, causing a chill that many fear will turn into permafrost.

Unprecedented volatility in the crypto market — since Bitcoin peaked at $68,000 in November last year, it and Ethereum have lost 75 percent of their value — culminated in the crash of the FTX digital currency exchange, a moment that many compared to the crypto “Lehman moment.” . As Cowan DeBaets Abrahams & Sheppard LLP Visual Arts and NFT Group Co-Leader, I receive a constant stream of questions from clients and friends asking if NFTs in the visual arts have been completed since FTX closed.

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My short answer is no.

While the miscalculations—or perhaps more troubling reasons—behind the dramatic collapse of cryptocurrencies should not be ignored, neither should the enduring potential of blockchain technology, which offers many innovative opportunities to improve existing paradigms in the art world.

Despite the rapid pace of growth and awareness of the existence and potential of Web3 technology, there is still a mix of blockchain, cryptocurrencies, NFTs and digital assets that is causing confusion among consumers, especially in the art world. The key here is to understand that blockchain technology and NFTs use crypto function, but this is not the same as speculate on crypto. So using crypto as a tool to register NFTs on the blockchain is a real feature that justifies real value if people want to keep registering information on the blockchain. This should be distinguished from artificial value speculation, irresponsibly created by forcing a desired crypto future.

In addition, NFTs are not magical entities that add value where there was none before. NFTs are the digital equivalent of empty cardboard boxes that can serve as packaging for assets, utilities, or experiences. One of the immediate positive outcomes of the cryptocurrency winter and the FTX bombing cyclone is the revelation that packaging is exaggerated as having substantial value in itself. real value in the long run will be connected with packaging.

Visitors watch non-fungible tokens (NFTs) in action at an exhibition called Indo NFT Festiverse at RJ Katamsi Gallery, Indonesian University of the Arts, which brings together art and technology in Yogyakarta April 13, 2022.  When publishing - an illustration of the event specified in the heading (photo Devi Rahman / AFP) / limits for editorial use - mandatory mention of the artist during publication - illustration of the event indicated in the subscription of the mention of the artist during publication - to illustrate the event specified in the header (photo Devi Rahman /AFP via Getty Images)

Visitors watch non-fungible tokens (NFTs) in action at an exhibition called Indo NFT Festiverse at Indonesian Art University’s RJ Katamsi Gallery, which brings art and technology together in Yogyakarta, April 13, 2022.

DEVI RAHMAN/AFP via Getty Images

In the fine art world, this means digital packaging of meaningful artistic expression that will appeal to both digital and traditional collectors.

What is urgently needed are robust industry standards and protocols adopted on a broad scale, rather than piecemeal efforts tied to limited commercial ventures. Some standards and protocols may be universal and relevant in different markets, but we need something more than a one-size-fits-all solution.

After the NFT-based crypto orgy of 2021, when the boundaries between markets became transparent to the point of non-existence, 2022 saw the restoration of market boundaries and the recognition that not all NFT projects are the same or universally relevant. We hope that the devaluation of the cryptocurrency will accelerate the return to more thoughtful approaches. Planning everything from individual projects to long-term business strategies should have a more vertical perspective, taking into account the specific desires and appetites of consumers. It found that while there may be overlap, consumers interested in video games or collectibles may differ from those interested in fine arts projects or charitable causes.

With the promotion of numerous digital fine art projects to be featured at the upcoming Art Basel Miami Beach, we see that NFTs in the art market are far from over – in fact, they are just getting started. Take, for example, the exciting projects commissioned by NFT’s climate-focused marketplace, including those by Nancy Baker Cahill in Conversation with Sophia the Robot, and those by Quaiola. Effects du Soir. Or the partnership between Tezos and Art Basel, which will allow attendees to create NFTs with German artist Mario Klingemann, who will create AI portraits of attendees at the fair. And that’s not to mention the numerous independent projects presented at gallery stands and satellite events.

NFTs in the visual arts are not dead, though we may need to rethink the term “NFT” so that it doesn’t evoke Ponzi schemes and blind speculation in the general public. Blockchain technology still offers a lot of untapped potential to bring about paradigm shifts in the art world, from trusted certificates of authenticity to mandatory implementation of profit sharing, automatic licenses and restrictions on the display or resale of works of art. With less speculation, real innovation, and thoughtful advocacy for artists, NFTs could be the rocket fuel of 2023.

Let’s not throw the baby out with the bath water.

Instead, let’s focus on developing market agreements that can serve as a basis for doing business sustainably; development of more complex industry-specific business tools; and a compelling reason for those passionate about the arts to be interested in the potential of blockchain to bring transparency, trust and fairness in a historically opaque and lopsided marketplace.

Like the dot-com crash in 2000, the exponential growth of the crypto market in such a short period of time was based on superficial, unreliable financial principles, and its collapse will clear the way for sustainable evolution. In addition, just like the collapse of the dot-coms, when the survivors created a solid foundation for online trading, those blockchain enterprises built on solid values ​​will emerge from the tundra to serve as the foundation of future digital innovations.

Written by khirou

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