On March 11, after selling an artwork for over $69 million to someone with the pseudonym Metakovan, auction house Christie’s noted that “this piece now ranks third amongst the most valuable artworks ever sold by a living artist”. No. 1 on that list is a stainless steel sculpture called ‘Rabbit’, the work of American artist Jeff Koons, which was sold for $91 million in 2019. And No. 2 is a 1972 painting, ‘Portrait of an Artist’, by British artist David Hockney that got sold for just over $90 million a year before Koons’ work bested it.
The third, ‘Everydays: the First 5000 Days’, is neither a stainless steel sculpture nor a painting on a canvas. In fact, there is nothing physical about it. This work, by Mike Winkelmann, who is also known as Beeple, is essentially a collage of 5,000 digital images he created over the last 13 years. It is purely a digital creation. And on Christies.com, the final moments of bidding attracted 22 million viewers.
Within days of the auction, India-born, Singapore-based, blockchain entrepreneur Vignesh Sundaresan revealed himself to be Metakovan. “The point was to show Indians and people of colour that they too could be patrons,” he wrote on this blog. What he ended up buying, spending record sums of over 42,329 Ether (native cryptocurrency on the Ethereum platform, and Bitcoin rival) in the process, is more than just a JPeg file. It’s an NFT, short for non-fungible token, and the most expensive one till date.
When an item is non-fungible, it essentially means it has unique properties, from which it draws its value. So, it can’t be exchanged with another item, what with its value also being very subjective. A piece of art is an example of it. This contrasts with, say, currency, which is fungible as exchange based on value is easy. The distributed platform or the blockchain that forms the basis for the cryptocurrency Ethereum, in the process providing the verification layer for transactions, also supports NFTs. So a digital artwork that is an NFT is a unique piece of work where ownership is established.
Mr. Sundaresan, who has a software background, got initiated into the world of cryptocurrencies, specifically Bitcoin, in early 2013. His entrepreneurial journey in this space began around that time. Not long after, he co-founded BitAccess, which was in the business of installing Bitcoin ATMs across the world.
He left the company in 2016, and then made a “large sum of money” investing in Ethereum. This money, he says on his blog, has flown in new ideas, one of which is Metapurse, described as “a crypto-exclusive fund that specialises in identifying early-stage projects across blockchain infrastructure, finance, art, unique collectibles, and virtual estate”. Mr. Sundaresan runs Metapurse along with Anand Venkateswaran, known as Twobadour. In another Metapurse blog post, NFTs are described as “the centre of a renaissance — of finance, technology, creativity, collaboration, and culture itself.”
Mr. Sundaresan’s big-ticket art purchase comes at a time when the world of NFTs seems more active than ever. Last month, a Nyan Cat meme NFT was sold for nearly $600,000 in an online auction. Just a few days prior to the sale of ‘Everydays’, Twitter founder Jack Dorsey offered to sell his first Tweet as an NFT.
And just a few days prior to that, musician Claire Boucher, who is famous as Grimes, sold a collection of her work for almost $6 million. This ecosystem believes it has come a long way from what is described as the BC era, or the Birth of CryptoKitties, a project started in 2017 that generated a lot of buzz around the concept. It allowed players to purchase, breed, and sell virtual cats.
Mr. Venkateswaran, Mr. Sundaresan’s associate, wrote about the CryptoKitties episode: “At a time when speculation and profit were the primary motives for people getting into the crypto space, NFTs infused an element of pure child-like joy into the system.” He further wrote: “Typical of crypto, the kitties bred not just other kitties, but other ideas in the NFT space.” Over the years, some of these ideas have been about marketplaces for NFTs, such as OpenSea.
While there are question marks about whether NFTs are actually bubbles, a post on the Ethereum site explains why NFTs are important. It says, “As everything becomes more digital, there’s a need to replicate the properties of physical items like scarcity, uniqueness, and proof of ownership.”
OpenSea, which calls itself the largest NFT marketplace, says in a post: “We have tons of digital stuff, we’ve just never really owned it.” The point it is making is that unlike in the physical world, ownership of digital assets is almost always in the context of specific platforms, and the ease of holding or transferring them is hardly there. NFTs are said to solve this issue.
Not just this. There are also attempts to build solutions so that NFTs can validate ownership of physical items, such as cars or homes. But right now, the art world is seeing the effects of NFT in action. As Mr. Sundaresan, aka Metakovan, was quoted in the Christie’s release, “When you think of high-valued NFTs, this one is going to be pretty hard to beat. And here’s why — it represents 13 years of everyday work. Techniques are replicable and skill is surpassable, but the only thing you can’t hack digitally is time. This is the crown jewel, the most valuable piece of art for this generation. It is worth $1 billion.”