How do we value digital art? Will collectors from older generations collect digital art? How does digital art differ from an NFT? Is it a proven long-term investment?
It is important to begin by establishing what this broad idea of digital art is. Digital art is artwork produced or made on digital media, such as animations, photographs, illustrations, videos, and digital paintings. Like a photograph, the work has no materiality until it is printed, and as a print, its value is impacted by the edition size because of the potential reproducibility of the work. The difference between digital art and photography is that it is newer, and less commonplace in gallery spaces and there haven’t been a huge number of digitally drawn works that have proven their value over time from emerging artists.
In 2023, when defining digital art – one needs to be cautious not to conflate it with an NFT. An NFT or non-fungible token is a unique cryptographic token that exists on a blockchain and cannot be replicated. NFTs can represent digital or real-world items like artwork and real estate. NFTs, however controversial, has the potential to add a lot of value and reliability to digital art going forward. The only thing that limits digital art from becoming an NFT is the underlying blockchain technology that brings it to life. Most crypto collectors invest in NFT art as this way they can prove ownership of it and get a truly unique digital artwork, whose origin can be tracked.
Looking at these two definitions – it is clear one also needs to be careful of amalgamating the terms NFT and digital art because it is conceptually limiting. Tying the NFT to digital art ignores the multitude of other uses for NFT technology that is already in existence and are yet to come.
Despite this, the rise of the NFT and blockchain technology has been transformative for digital artists. The NFT has allowed digital artists to take control over their own work, protect it against the appropriation from others, and easily sell their artwork. Before the emergence of blockchain technology, digital artists were routinely shut out of the traditional art market because digital art just wasn’t profitable enough in the traditional art marketplace. Convincing collectors to shell out thousands of dollars for a .JPG or .MOV file stored on a drive was a tough sell that many commercial galleries didn’t care to try.
Now, many established galleries, auction houses and institutions have begun to engage in NFTs and digital media. A common misconception is that only the younger generation is interested in collecting NFTs or digital art. In actuality, the deeper NFT technology penetrates into art, the more broad range of collectors begins to be interested in this format. In recent years, even Sotheby’s and Christie’s have taken their place in the Metaverse; in addition, according to The Art Market 2022 report created by Art Basel and UBS, 74% of wealthy collectors bought at least one NFT in 2021, with Gen Z digital art collectors only slightly higher (12%) compared to boomers (7%). And this trend will not disappear in the future, as a survey showed that 88% of wealthy collectors are interested in purchasing works of art based on NFT art in 2022. It is also notable that most of the potential buyers of the famous Beeple NFT piece “Everydays: The First 5000 Days” belonged to the millennial generation, not generation Z.
Read more about NFT art collections, collectors and common misconceptions here: https://v-art.digital/who-is-an-nft-art-collector/
Written by Shayna Rosendorff