NFTs Challenge The Art Industry's Dominance By The Wealthy Elites

The creative domain has always been a playground for the wealthy and elites. It is not only filled with corruption and scandal; it is exclusionary to both artists and buyers who lack the “prestige” to be accepted into the space.

To quote Les Borsai, Co-Founder and Chief Strategy Officer at Wave Financial,

“[when] You take a look at the art world, an artist gives up half of what he earns to a gallery in a lot of cases, and collectors at that gallery, or the gallery itself, become the market makers. They’re paying for the art and setting the prices.”

Establishing proof of ownership presents a challenge. Provenance documents like gallery receipts or signed authenticity statements can be falsified. Many do not even realize what qualifies as an actual provenance document or take advantage of regulation laxity for malicious purposes.

Artists have long lamented how easy it is for their works to quickly change hands using large sums of money, with no benefit to their creator. Most art is sold anonymously, for cash, leaving no trace for the artist to follow if they tried. The DeFi movement saw this problem and has created a solution: NFTs.

NFTs are tokens that hold unique digital identifiers like cryptocurrency and exist on a blockchain. When you purchase an NFT, you are the official owner of a distinctive asset. They offer flashy features like allowing the artist to “sign” their name in the metadata, or code in royalties to be paid to the original artist every time the token is traded or sold.

The transparency is written into the code also allows the original artist to track each piece they create. This kind of transparency and security has never existed for artists or collectors. The great thing about NFT marketplaces is that they were created to benefit artists, not the art dealers.

Borsai adds,

“Very few assets can be created that an artist can own outright, and this is one of them. If an artist decides he wants to create art and put it out there in the form of an NFT, he or she gets to keep that money… If we can create markets around local artists and accelerate that community and that economy, and artists can make more money, I think that’s a good thing.”

[in a recent Cryptonized! Interview]

Some may wonder what makes an NFT special if it can be copied and pasted online.

According to Les Borsai,

“When you talk about a print of a print of a print, that really isn’t anything different than what traditional markets are. I have sets of prints that are authentic prints from the artist; yet the access point for other people who may enjoy the art may be a bit too high in terms of price. So there’s licensed versions of these prints that sell for less money, because they’re not a part of the series. If I have an original painting, there’s nothing stopping anyone from taking a picture in the real world of that painting and showing people. The concept of value is in my wallet. You can’t take that value away.”

It can easily cost an artist $200-$1000 an hour, with three to four-hour minimums, to rent gallery space. In addition to charging to rent the space, galleries usually charge 50% commission on art sold, creating financially demanding overhead with little hope of making a profit.

NFT marketplaces are exploding in worth, having grown to over two billion dollars in the first quarter of 2021, benefiting artists and collectors alike. Anyone with a computer and an internet connection can browse NFT marketplaces and find art that fits their interests and style.

Mainstream artists like Grimes and Phillip Colbert are joining the movement, creating their own NFTs. Damien Hirst has even started his own “Currency Project,” which gives the buyer the choice of a high-resolution digital photograph of the painting or the physical copy itself.

This new piece of the DeFi movement gives artists and buyers freedom never before afforded to them, and there are no limits to where it can go.