Cryptocurrency has invaded not only the world of internet transactions and finance but the art world too. Contemporary art takes on new forms as the digital age infiltrates its form creating fresh and exciting possibilities for the future of creation and transfer between purchasers in the art community. With recent terms such as Non-fungible tokens (NFTS) popping up alongside our developing understanding of blockchains and the cryptocurrency Ethereum (ETH), there is so much that the digital art scene can capitalize on to advance the digital art scene
Cryptocurrency is one of the latest trends dominating the internet right now, with A-listers such as Linkin Park’s Mike Shinoda and even political figures advocating for the decentralized currency. Taking advantage of the sheer accessibility of the internet, cryptocurrency (Crypto) works as a digital asset rather than our usual forms of physical capital as a means of exchange acting very similar to regular money. Crypto, however, unlike the standard currency, mainly uses decentralized control meaning that it does not come from a single authority like a bank or government.
This then opens up the possibility, although highly volatile, with the value it can be worth as it removes the need for an intermediary thus making it immune to government interference and manipulation. Instead, it is a direct transaction to the other party without the hassle of processing fees. As a result, it makes it virtually impossible, if you pardon the pun, to counterfeit processes and purchases as crypto are based on the technology of blockchain which is essentially a massive digital ledger of transactions and records that adds a new ‘block’ after each interaction.
But what are NFTS and how do they contribute to the whole system? Dissecting the term, a ‘fungible’ token means that it can be swapped for something completely identical as every part of the unit is the same, an example would be the infamous Bitcoin where one coin has a set value and functions the same as another coin. A non-fungible token then means that it is completely unique and cannot be interchanged to complete a transaction. NFTs are cryptographic meaning they take on special appearances with each has its own value based on the ‘rarity’ of the token. This brings the art element into play with the domains of crypto. As each NFT is unique, they are often presented as items or collectables and are managed solely through blockchain-managed ownership. NFTs or sometimes ERC-721s are becoming a crucial part in the digital art world as they offer artists new roles as creators, collectors and investors in the world of cryptocurrency.
A major example of how NFTs rose to fame includes one of the first blockchain games on Ethereum, CryptoKitties. Taking on the basic mechanics of an NFT, the game allows players to play, breed and buy virtual cats. Each is completely unique with rarer combinations producing a higher NFT value in ETH. CryptoKitties isn’t the only NFT to come out of the Ethereum blockchain with CryptoPunks, a simplified earlier version serving as Ethereum’s first NFTs as there will only ever be 10,000 Cryptopunks.