I love art, especially when it comes to oil paintings and glass vases and bowls. I always enjoy art from Leonardo da Vinci, Michelangelo, Rembrandt, and these Old Masters. It is easy for me to recognize these figures without taxing my imagination.
Admittedly, I struggle a bit with watercolors and modern art. Put Monet, Manet, Andy Warhol, or Salvador Dali in front of me and I get lost in the colors or their unusual creativity.
And I still don’t understand Art Deco.
This just goes to prove how personal art is to the consumer.
What's the deal with art and NFTs?
Why am I writing about art?
Because, for a long time, art has been talked about as an appreciating asset. But 99.9% of all art is purchased for personal reasons with no expectation of appreciation. And in most cases, the art is sold or liquidated for less than the purchase price.
Of course, Sotheby’s in New York and London would give you a very different story.
Now let’s talk about art as a bartering piece. Artwork and other products have always been traded for goods and services. “I’ll trade you this incredible painting for a month’s worth of food and groceries” is not a new concept—today, it just has the fancy title of “NFT.”
You may have heard that the NFT of Twitter CEO Jack Dorsey’s first tweet sold for nearly $3 million to Sina Estavi, a Malaysia-based crypto entrepreneur.
Art dealers are also getting in on the auction, with Christie’s running an auction for a virtual work from the artist Beeple which eventually sold for nearly $70 million.
Christie's released this image of the digital collage titled, Everydays — The First 5,000 Days, by an artist named Beeple. (Christie's Via AP)
What are NFTs, anyway?
Consumers have long been willing to fork over exorbitant sums on unique items—paintings, baseball cards, and vintage cars. Now, collectible items have moved into the digital space in the form of non-fungible tokens, or NFTs.
You can think of NFTs along the lines of the crypto alternative to first-edition music tracks or rare sports memorabilia.
A Fungible Token includes currency-like products, such as Bitcoin.
How do NFTs work?
And to make your head spin, NFTs can potentially tokenize any real world asset–even beyond art and music, which are the most common forms of media on NFTs today.
I love several types of art and always appreciate the creative effort that goes into art.
I don’t mean to rain on the NFT parade, but I’m still old school when it comes to art and the other NFTs mentioned above. When it comes to art, buy it because you love it, or because it fits perfectly in your home or office.
Buy the sports memorabilia because you love this athlete or it would make a great gift. Heck, you can even barter sports memorabilia: I’ll trade you my Mickey Mantle rookie baseball card for two Joe DiMaggio cards.
And when art hits my wall or bookcase, you know I did not purchase it for appreciation. I purchased this art for love and looks. And I am a buyer.
Today, many investors are looking into NFTs as a speculative investment, hoping to flip them for a higher price. To this, I say buyer beware — NFTs have no intrinsic value, other than what somebody else is going to pay you for it. It’s all speculative at the end of the day... And they may very well be another crypto fad that will eventually drift into irrelevance.