On 11 March, a work of art was auctioned for more than $69 million (around ₹5.13 billion)—and the furore it created wasn’t just due to the price tag. For the first time, a leading auction house like Christie’s had sold a non-fungible token, or NFT, for a digital work. Years before this auction of Everydays: The First 5000 Days by Beeple (the name Mike Winkelmann goes by), however, many Indian artists had been analysing the possibility that NFTs, which are blockchain units certifying a digital asset as unique, would offer them greater ownership over their art.
Harshit Agrawal, an Artificial Intelligence (AI), new-media artist and a human-computer interaction researcher, has been following the NFT trend since 2019, when he heard of SuperRare, a curatorial platform minting (the term for creating such a token) and selling NFTs. But he didn’t get into NFTs himself until mid-2020, when physical art galleries were closed, and he started participating in digital art fairs.
Agrawal is one of India’s rare AI artists. He develops interactive art tools, such as Tandem, a software system where a person’s drawing input is “imagined”, or worked upon, by a computer, which then suggests an outcome. His practice is located at the intersection of human creativity and machine intelligence. It helps that the artist has a bachelor’s degree in design from the Indian Institute of Technology, Guwahati and a master’s in media, arts and sciences from the MIT Media Lab, US. For his work, shown as part of Nature Morte’s 2018 show Gradient Descent—incidentally, the first show on AI art in India—Agrawal curated 60,000 images of human surgical dissection, and then let the machine create its own imagined representation of it. The work was shown as 20 prints on archival paper.
“Last year, I was curious about how technology was responding to these times and began to read more on NFTs. I realised they were a way to solve some of the problems digital art has been facing, such as duplication and provenance,” he says. Despite the excitement, though, there is still some confusion about the NFT mechanism.
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How do NFTs work?
Non-fungible tokens are essentially the cyber world’s equivalent of certificates of ownership for anything that exists only in the digital world—from tweets to music to works of art. As an 11 March article in Mint noted, “Once created, an NFT will forever reflect your ownership of the digital item and can’t be changed.” Fundamentally, any digital item is just a block of code. As it changes hands, a new block of code that cannot be altered is added, recording the line of ownership—this is known as an NFT. It doesn’t exist in the material world, but can be bought and sold and retains its unique characteristics.
It’s a new world, with a different currency, new terms, new collectors, new issues to address—even a new definition of the “artist”. NFTs are opening up the art world to meme and TikTok creators, GIF makers and podcasters, who weren’t always welcome in the white cube space.
Once Agrawal started minting his work with SuperRare, it helped him connect with a wider network of collectors. “Last year, NFTs were bought by collectors who already had cryptocurrency investments. The price points were quite reasonable (and catered to the new-age collector). It was an emerging community and it was nice to get on to the bandwagon,” he says. With the works registered on the blockchain, a decentralised ledger on which information about a particular artwork is stored in a series of data blocks, artists were assured of 5-10% royalty with each secondary sale, which is simply the resale of the work. “A lot of my work has exchanged hands in the past year and each transaction has been recorded on the blockchain,” he explains.
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But what does the owner of an NFT get? “The winning bidder will not receive a sculpture, painting or even a print. Instead, they will get a unique digital token known as an NFT,” explains a BBC article from 12 March. “In economics, a fungible asset is something with units that can be readily interchanged—like money. With money, you can swap a £10 note for two £5 notes and it will have the same value. However, if something is non-fungible, this is impossible—it means it has unique properties so it cannot be interchanged with something else.” So NFTs, it explains, are one-of-a-kind assets that can be bought and sold like any property, but they have no tangible form.
No more duplication
NFTs are enabling us to reimagine the definitions of ownership of a work and the process of creation. Until recently, digital art was plagued with issues of provenance and duplication. One could just download an artwork and replicate it without even crediting the creator. There was no sense of uniqueness attached to it. NFT has solved that problem to an extent. By attaching a unique code to each piece of digital art, it makes it unique—a collectible.
“An entirely new category of object has entered the market…. NFTs allow for creators working in digital media to finally participate in the robust trade and transfer that has characterised the marketplace for physical artwork,” explains a Christie’s spokesperson in an email.
Every transfer and purchase is recorded. For instance, on the decentralised, open-source Ethereum blockchain with Ether, or ETH, as its cryptocurrency, the NFT would include the current owner, transfer procedures, details of the artwork, and a link to the digital image or a hash code. As a result, there is a publicly accessible record documenting ownership history that cannot be altered or erased. “Provenance is therefore automated, accurate and verifiable,” says the Christie’s spokesperson.
Consequently, an interesting intersection of art forms is emerging on the NFT spectrum. In June, visual artist Santanu Hazarika and singer-songwriter Ritviz sold a collaborative artwork as an NFT on the WazirX NFT Marketplace, powered by WazirX, which claims to be India’s largest crypto exchange. Hazarika’s Breaking The Frames (BTF) attempts to merge visual art with music, thereby paving the way for the Music NFT creator category on the marketplace, which was launched on 1 June 2020.
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For Tamil musician Kaber Vasuki, NFTs offer a sense of agency and power. “To get your music out today, you have to sign with a music label or a distribution company. The terms of the contract are exploitative and sometimes you don’t end up making any money. NFT will revolutionise the intellectual property space,” says Vasuki, who is currently living in Canada. Though his work cuts across genres ranging from rock to hip hop, Vasuki calls it non-mainstream Tamil music, which is “introspective, raw and rooted”. Last month, he sold a phone recording of one of his popular songs, Vasanam, for 50 ETH, or Ethereum, valued at about ₹1.5 crore at the time of sale. It was bought by Singapore-based Metakovan, who also bought Beeple’s work. Vasuki says Metakovan has been his patron for a long time.
Now you have names like Beeple, Larva Labs and Harshit Agrawal coexisting with Andy Warhol and Jean-Michel Basquiat as creators, making digital art just as lucrative a collectible as physical art. Digital artists are excited. “It’s interesting to see how patronage changes and enables creativity. If a patron is someone who upholds some value and is buying art, what NFTs have done is create an alternative value asset class. And when you democratise patronage, you democratise value,” says AI artist Raghava K.K., co-founder of 64/1, a Bengaluru-based curation and technology research collective. A multidisciplinary artist, his practice now centres on building public understanding of how artists and AI can come together to create art for the “post-human age”. To this end, he has been working with scientists, architects, “prompting artists to think like scientists, and for scientists to be more creative in the way they look at the world,” as he mentioned in an interview to the Deccan Chronicle. He maintains that to be a digital artist, one need not have a background in technology, but just have a great story to tell in a way that makes it accessible to people.
The artists in this space have begun exploring myriad themes, some even challenging the very concept of NFTs and digital art. Agrawal cites the example of an artist who goes by the moniker Murat Pak, whose identity is not public. In April, Sotheby’s—in collaboration with Pak—held a three-day auction of the artist’s NFTs. The collection, known as The Fungible, was sold exclusively through Nifty Gateway, a marketplace for NFTs. “He posts regularly on Twitter about what makes sense to collect as a digital asset. One of his works pokes fun at the medium itself, in which he tries to sell the same work with different tokens and edition numbers. When he put it out for auction, interestingly, the pricing varied a lot,” says Agrawal.
Space for more artists
NFTs are setting the stage for a new economy, giving meme and GIF creators, YouTubers, WhatsApp joke writers, podcasters and others entry to a world so far closed to them. “Those are artists too as they are creating some kind of meaning through their humour and have the ability to spread ideas,” says Raghava.
This year has seen memes, GIFs and even tweets being sold as NFTs. Many may remember the video Charlie Bit My Finger, which went viral in 2007. Fourteen years later, the clip has been sold as an NFT for £500,000 ( ₹5.14 crore). On 19 February, a GIF of the Nyan Cat meme, based on a YouTube video uploaded in April 2011, sold for about $590,000 at an online auction. In March, the first tweet ever, Twitter CEO Jack Dorsey’s “just setting up my twttr” from 2006, went up for sale as an NFT. The original source code for the World Wide Web, written by inventor Tim Berners-Lee, sold for $5.4 million as an NFT at a Sotheby’s auction earlier this week.
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The NFT ecosystem in India
The NFT space does away with intermediaries, allowing artists to connect with buyers across the world. However, the onus of marketing and promotion falls on the artist. Some say simply putting out a good work is not enough; one has to create a community around the practice, and that often involves being active on social media.
Chennai-based artist Dhanya Ajith has sold over 60 NFTs of her digital works—paintings that look like paper craft—across three different global NFT platforms since March 2020. An electrical engineer by profession, she doesn’t have formal training in art. In 2012, she started making sketches on her smartphone and uploading them on social media. As her art became popular, she created a Facebook page for it. Dhanya approached galleries to showcase her work but they didn’t have the infrastructure to display digital work. She didn’t have the funds to cover the costs of such a show. So the Metaverse—all the virtual worlds—has come as a boon.
“I had never participated in an art show. But after following up on NFTs, I joined a marketplace. And within a month, one of my paintings was selected for an NFT exhibition organised by global peer-to-peer platform OpenSea. I was the only Indian in it,” says Dhanya. So far, it’s mainly European and South American collectors who have bought NFTs of her works.
Over time, she has realised the need to engage with people on social media. This has not only boosted her credibility, it has helped her connect with artists around the world. “There are practitioners who are helping emerging artists with the gas fee (or the monetary energy needed to use the system),” she explains. Dhanya was helped by four American artists, who gave her the initial seed money to create a wallet on the hic et nunc (HEN) platform. “It uses Tezos cryptocurrency coins ( a decentralised, open-source, energy-efficient proof of stake blockchain network that can execute peer-to-peer transactions), which were not available in India at the time. This helped me put up one work, and from its sale, I was in turn able to provide gas for two people on the platform,” she says. The registration, listing, gas fee and minting costs can vary, from less than a dollar to $150, depending on the platform one is using.
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The NFT space has changed dramatically over the past year, especially in terms of pricing. Digital artists who used to sell their works for a couple of hundred dollars are now selling for $40,000-50,000. “These are people who joined in early 2018 and are now legends of this space. When I joined in August 2020, I was pricing my works conservatively,” says Agrawal.
His initial works, priced at $700-800, have been resold for $2,500-4,500. He was the first, and continues to be the only, Indian artist on SuperRare, and his primary sale prices now start from $4,000-5,000. “The prices have gone up by four-five times in the past seven-eight months. The resale values are more interesting as they depend on the value of Ethereum. When I started out, the value was $200-300, and I was selling for 3 ETH. Now that same 3 ETH is priced at $6,000-7,000. Collectors can buy more works with the same amount of Ethereum,” he explains.
Who are the collectors?
Digital art is attracting both seasoned and new-age collectors. According to the Christie’s spokesperson, the auction house has seen more “traditional” collectors becoming interested in the NFT market as well as an uptick in new collectors from the crypto art community. May’s auction, Machine Made, featuring five Andy Warhol NFTs, saw near-equal participation from established Christie’s clients, who usually bid for physical artworks, and new registrants from the crypto art community. The buyer breakdown by region was close to two-thirds from the Americas and the rest, equally, from Europe and Asia. Registering the potential of this space, the auction house’s fourth annual Art + Tech Summit, to be held on 15 July, will focus on NFTs and beyond, in terms of democratisation, monetisation, emergence and sustainability.
In India, collectors such as Praveen Kumar Karempudi say the secondary market for NFTs is warming up after the Beeple auction. Since that sale, the Hyderabad-based crypto investor and trader has managed to sell 60 NFT works from his collection, for two-three times the amount he had bought them for. He still recalls the first art piece he invested in; it cost about $1,000.
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Indian auction houses too are exploring ways to tap this intersection of new and seasoned collectors. They are not necessarily looking at contemporary digital art but are minting existing works by modern masters as NFTs—thus bringing physical artwork into the digital realm. Prinseps has two unique NFT auctions coming up in July-August—one featuring sketches by the late Academy award-winning costume designer Bhanu Athaiya and the second based on the Avatar series of 1950s-radical artist Gobardhan Ash. “We decided to recreate the 1950s auction as NFTs. As you know, ‘avatars’ are used in the virtual world as representation of a user’s persona. They are usually very simple, with vibrant colours and minimal detailing. Crypto Punks, a collection of 10,000 figures or avatars, was released in June 2017 as the first ever NFT on the Ethereum blockchain by Larva Labs. If you see Gobardhan Ash’s work from the 1950s, it has the same characteristics as the Crypto Punk avatars—the same primitivism, characters with distinct personality traits,” says Indrajit Chatterjee of Prinseps. Moreover, Ash’s work—watercolour on paper (two-dimensional renderings), with vibrant colours—is ideal for transformation into digital art.
Terrain.Art, a new blockchain-powered online platform for South Asian art, too is presenting works by a modern master as NFTs. Founded by Aparajita Jain of Nature Morte, the virtual space is displaying 27 recent paintings by Lalu Prasad Shaw, making him the first living Indian modern artist to showcase paintings with registered NFTs.
Jain has explored AI in art through past exhibitions such as Gradient Descent. “The only place that hadn’t been disrupted in a long time was art. But now it is, with NFTs. We would have been way behind the curve if we didn’t come up with a plan to democratise art using technology,” she says.
Though Terrain.Art has started its journey with a modern master, it will focus on a new generation of digital artists in the days to come. “Blockchain and NFT is such futuristic technology and here is a veteran Bengali master (Shaw). This exhibition shows that we can all coexist for the betterment of the art world,” says Jain.
The good and the grey
Both Terrain.Art and Prinseps want to clear the misconception that NFTs can only be bought with cryptocurrency. According to Jain, crypto is still a grey area in India, and the platform doesn’t want to dabble in anything ambiguous. In recent times, some crypto platforms and traders have come on the government’s radar. For instance, WazirX, a three-year-old cryptocurrency exchange platform, received a show-cause notice from the Enforcement Directorate last month for allegedly violating the Foreign Exchange Management Act for cryptocurrency deals valued at ₹2,790.74 crore. “The Indian government doesn’t want people to speculate in crypto. They also audit crypto exchanges,” says Chatterjee.
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Given that the currency is still a grey area, Indian buyers are uncertain about liquidating their coins. “Since there is no regulation or legal framework in India, I don’t know how much tax I have to pay. That’s why I have not withdrawn the coins,” says Karempudi, who says his collection is worth ₹1 crore at the current ETH rate.
“You need not use cryptocurrency to buy NFTs,” says Chatterjee. Both Terrain.Art and Prinseps are offering patrons the opportunity to purchase an NFT using a credit card. “We are selling Gobardhan Ash’s physical artwork as well as its NFT. A collector has an option of buying either or both through a regular transaction. But once the NFT is sold, you will need to update the Ethereum blockchain, and that will require a gas fee, which might be the only crypto element in the transaction,” he says. Collectors are encouraged to buy both the physical and digital works, though separate ownership is technically possible.
Meanwhile, WazirX is confident about the future of cryptocurrency-led NFT. “We are confident that the RBI (Reserve Bank of India) guidelines will soon be in place and that we will have defined regulations. Having said that, NFTs can survive with or without crypto, and hence their future is bright in India,” say the company’s spokespersons.
NFTs have not escaped criticism. The question being asked is whether the high prices have, or will, overshadow the quality of art. Is tokenised art veering towards the “gimmick-y” in a bid to shock and disrupt? “Right now the hysteria around NFTs is primarily because of the mind-boggling numbers which have captured the world’s imagination,” says Arvind Vijaymohan, chief executive, Artery India, an art market intelligence firm.
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Some say the hysteria has been generated by those with an interest in the cryptocurrency business—hence monetisation of NFTs is part of that strategy. “No doubt NFTs are great for creating a transparent ledger, which allows for a registry to be created. However, right now the world is only celebrating the crazy numbers, and one sees mediocre content being passed around,” adds Vijaymohan. He advises that, like with all acquisitions, in NFTs too one must focus on the quality and importance of the artwork.
Buyers, however, are willing to take the risk, hoping for future returns. For Arijit Das, a Hyderabad-based collector, NFTs represent an innovative tech idea. “I think it’s better to be the first to get into that space,” says Das, who bought The Arrival, part of mixed-media artist Vimal Chandran’s Folk SciFi series, for a value of $1,844.8 last month.
When Raghava is asked whether NFT is a passing fad, he responds with a question of his own: “Speculation is of no use. The question is how do we give a direction to this opportunity in a way that is liberating and fair. That is what we should be focusing on.”