NFT Artists on Money, Opportunity, & What's Next
Cover image: Mad Cans – part of Series 1 by Greg Mike
Interviews with Greg Mike, Hackatao, Pierre Bourque, and NEO 10Y
I’m not going to start by talking about Beeple. At this point, saying that Beeple sold a painting in a Christie’s online auction for more than $69 million is so “two weeks ago”. I suppose the money must always be remarked on and the sum is remarkable.
Non-Fungible Tokens (NFTs) aren’t limited to art, of course. In fact, they are hardly limited to or by anything at all. They can be images, videos, and audio, historic, comedic, crass, or mundane fandom.
At their root, NFTs are simple Ethereum-based smart contracts that can convey anything the seller intends. As we wrote about recently, NFTs have been applied to all manner of media from trading cards to clips of already publicly available video. They don’t transfer any IP and don’t generally give the buyer the reproduction rights. What an NFT does well is show a very clear transfer of property — a clear advantage for art and collectibles.
NFTs are like real-world collectibles that come with a certificate of authenticity, except the certificate is the valuable part, and, in this case, the certificate is more like a receipt.
Interest has taken NFTs from novelty setting to overdrive in short order, and it’s natural for the art world to lead in ideas and innovation. Art is ever the partner of science, and therefore technology. So we spoke to a few NFT Artists to see where this is all going in terms of art and value.
"Greg Mike" Mensching has been reinventing public spaces through a mix of art influenced by graffiti art and skate design for over a decade. He has created surrealist pop-art murals in cities such as Atlanta, Paris, Saint-Tropez, Taipei, Shanghai, New York City, and Los Angeles. Now he’s set his sights on transforming a much smaller space with his first NFT drop.
Greg Mike’s NFT Artwork drop opened on March 11th on NiftyGateway, a debut series of digital collectibles titled “The Future is Now”. Purchases include prints, Mad Cans (printed with colorful yet disturbing cartoon characters), crystal sculpture in a special box, and of course that lovely NFT to represent the transaction. At the time of writing the series is sold out.
“I think there are a few things that attract people to NFTs. For some, it’s the digital and collectible aspect… with the rise of social media apps like Instagram we have been constantly engaging in artwork on a daily basis and on a whole new personal level. This form of art and media is something the younger generations are growing up with… Now there’s a way to collect work and invest in it like never before,” Greg Mike said.
The art duo known as Hackatao (the name is a portmanteau of “hacker” and “tao”) are visionaries in the NFT Art movement. The pair began working together in 2007 in real-world surrealistic art and started working in NFTs in 2018. Their recent NFT art drop — a collaboration with Argentine artist Jose Delbo, known for his work with DC Comics, earned $1.5 million in 15 minutes.
“As far as art is concerned, NFTs open countless possibilities: first of all they make the market more liquid, fast and dynamic, accelerating all the mechanisms of traditional art. It is no coincidence that it is said that 1 year of cryptoart corresponds to 10 years in the normal world,” Hackatao said. “In the cryptoart movement we see the confluence of languages and themes, the digital and web ones, that were not yet totally expressed in traditional art. So we can say that it is a real cultural, as well as technological and trading, movement.”
This Queen of Art by Hackatao
“I think it is the fascination with the new and the explosive growth in prices that is attracting people to NFTs, both as creators and as collectors. It is an exciting medium with a low barrier to entry on both sides. I think the early adopter creators are seeing early success, but I think that will evolve as new entrants emerge with their own unique styles and voices,” said Pierre Bourque, NFT artist and Founder/CEO of BloodFlow, Inc. and Blockchain Radio.
Beeple Deleted by Pierre Bourque
Recording artist and NFT creator NEO 10Y see NFTs not just as a chance for an artist to advance their work, but as a greater opportunity to work collectively in the world of art and ideas where technology and art often meet.
“I think I will adapt certain concepts and constructs to NFTs. I have just launched one today Shortcut To World Peace, with the encouragement of some more crypto-savvy friends around me. I am excited at the prospect of raising funds to support my mission and purpose to help humxnity, and so as far as marketing goes, I am really only marketing world peace… I just want to share and amplify love energy,” NEO 10Y said.
NEO 10Y is offering limited edition NFT Collectibles and a part of the greater good for humanity by investing in the Shortcut To World Peace. NEO 10Y released an 11-track CD and title track “Shortcut To World Peace” to much critical acclaim along with LOVE energy token (NFT), which is an investment in “their art and the amplification of the message of oneness which is communicated through the vessel of NEO 10Y as a contemporary artist.”
Cover art from “Shortcut to World Peace” album by NEO 10Y.
Greg Mike expressed a similar interest in collective action, with digital ownership of art as a new way to raise funds and awareness.
“I think there’s a lot of opportunity for artists to crowdfund through NFTs. This could really help artists produce dream projects whether they’re massive outdoors installations, sculptures or murals while providing equity to the collectors. This could change the future of public art as many artists are heavily dependent on corporate sponsorship or city grants. I'm also interested in the charitable aspect of NFT’s and how during the crowdfunding there can be built-in charitable components,” Greg Mike said.
Are NFTs the Future of Art Collecting?
“99.9% of current excitement is around the impressive recent sales when it should be all about the fact that this technology helps to sell digital art easily and safely. However, a lot of people (or just a few loud ones) predict that it is the ‘future of collecting’ and that having a physical, tangible art collection at home will become marginal in comparison with having a fully digital NFT art collection,” Marine Tanguy, CEO & Founder of MTArtAgency said.
MTArtAgency is a talent agency for visual artists worldwide. They have had a number of artists in their management start making NFT Art or start asking about it.
“Currently, our artists Jennifer Abessira, Claire Luxton, and Jesu Moratiel have started making NFTs. They all have a large presence on social media and it suits their demographics. With inquiries from the rest of the crew on whether or not to start it,” Tanguy said.
This raises the question of what ownership means — and does a more sure blockchain-enabled record of provenance add to the value of art acquired as an NFT?
“I think with the value of art, provenance is everything. That includes the artist’s history as much as the history of the artwork and/or the recognition it has received. The other day Damien Hirst tweeted he thought Beeple was among the very best artists in the World. Where was that sentiment barely a month ago? Perhaps that staggering Christie’s auction helped cement that mindset for Hirst. But did the auction price authenticate the quality of the work or more the novelty of the process of the art? Or was it the media attention to that auction and other recent sales? Regardless, the ownership of art as it is reflected in the NFT is now unequivocal,” Bourque said.
“The NFT market showed a relatively even distribution of high-value sales ($1,000+) throughout 2020 among the metaverse, gaming, and art. The metaverse took up 26% of such sales, artworks accounted for 24%, and gaming accounted for 23%; the rest was divided between utilities, collectibles, and sport. Considering the heating up metaverse and the hundreds of billions’ worth of the gaming and art markets, it will be fair to assume that NFTs are not entirely about money-making and may hold some fundamentally valuable input for industries and markets,” Greg Waisman, co-founder and COO of Mercuryo said.
“The latest news of the B20 NFT representing the digital artwork ‘Everydays: The First 5,000 Days’ by Mike Winkelmann (Beeple) at Christie’s auction for $69.3 million denominated in Ether shows a spike in the interest towards digital art pieces from digital artists and collectors. On top of that, Sotheby’s auction has announced a plan to conduct its first auction of an NFT, which is another piece of evidence of the mounting demand for NFTs,” Waisman added.
Marine Tanguy expressed that this burst of enthusiasm should be tempered with some realistic expectations — NFTs are just a step on the road structuring digital art as an asset.
“We should think of NFTs as the equivalent of a baby step. It’s meaningful and full of promises but witnessing your baby taking his or her first step does not mean that he or she’ll turn into an Olympic marathon runner. The road to structuring how to collect digital art assets is long and tortuous. NFTs protect the owner of digital art like never before and that’s awesome but saying that it’ll be the mainstream way to interact with art and that it’s going to take over everything else is a bit mad,” Tanguy said.
Having spent decades in the arts, we are sure there is no need to separate art and business. Art is a business serving the capricious tastes of the buyer. New ways to promote, productize, and sell art can only help the creators. Buying art has been the purview of serious collectors and the wealthy up to this point — perhaps NFT Art will help open the experience to a wider range of people that may never have considered investing in art as a store of value before NFTs.
Even with the date pushed back to mid-May in the U.S., taxes are a certainty. Wendy Walker, solutions principal at tax compliance software firm Sovos, reminded us that Beeple may be 37% less lucky then we might think he is:
“What most individuals don't realize is that the IRS classifies NFT’s as virtual currencies. So that $69 million NFT that was just auctioned off will now be taxed at a short-term capital gains rate of 37%, meaning the seller owes $25.53 million to the IRS,” Walker said.
Walker advises that when selling art as a collector or investor, timing is important for tax purposes.
“Taxable gain or loss applies every time you dispose of crypto… So, if you use fiat to buy NFT art you only need to keep track of when you bought it and for how much — because when you sell it, that is when taxable gain or loss will need to be calculated and reported on your annual income tax return to the IRS… If you sit back in 2021 and let that NFT art appreciate for at least a year, you might be able to take advantage of long-term capital gain rates that cap out at 20%. If instead, the value of the NFT art explodes and you decide to sell it in under a year, you could pay the ordinary rates that cap out at 37%. So, make sure it's worth it before you decide to sell.”
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