That is the topic of my latest Bloomberg column, here is one excerpt:
NFTs stand a reasonable chance of being an entirely new art form, and this may be the beginning of their long, noble and (yes) controversial history. The buyer of “Everydays,” an investor who goes by the name Metakovan, may well be remembered as the first patron of digital artists. That is a legacy you cannot buy for any sum in most other walks of life. You can become a kind of Medici of the blockchain.
Such a role is not for everybody. But this $69.3 million will probably not meaningfully detract from the private consumption of Metakovan, founder of a cryptocurrency fund called Metapurse, which invests in NFTs. No doubt he will still be able to buy a yacht and the world’s finest sushi.
Maybe NFTs will not endure, which is a risk for anyone playing a pioneering role in a new genre. That is why the price was not $200 million or more. In any case, this is a world in which Marcel Duchamp’s urinal sculpture still is exhibited in major museums, regarded by many critics as a masterpiece of the 20th century, and it sold at auction for $1.6 million in 2002. Canvases painted a single color, and other forms of abstract and conceptual art, remain a major part of recent art history and can sell for tens of millions.
The point is not to argue over what qualifies as “art.” It is simply that it is a mistake to assume that NFTs will fail in the art world.
Keep in mind that as the value of bitcoin and other crypto assets rises, more of the world’s billionaires will trace their wealth to crypto. It is unlikely that they are all looking to buy Rembrandts and Picassos.
With his purchase, Metakovan has now generated significant publicity for NFT artworks and boosted their value. His portfolio of NFTs is now probably worth much more, and in net terms he may well be wealthier than the day before he bought “Everydays.” He is also now known as an especially important collector of NFT art. Other artists and sellers may offer him their best works, hoping to be affiliated with a prestigious collection. He will be at the center of an information network about valuable NFTs. How is that for clever?
Again, it is not art but here is the NFT for the first post ever on Marginal Revolution, mentioned in the column as well. Here is a good Medium essay by the purchasers themselves, outlining their motives.