Crypto Art

Description

Everest Pipkin:

"Cryptoart is a piece of metadata (including, generally- an image or link to an image/file, the creator of that file, datestamps, associated contracts or text, and the purchaser of the piece) which is attached to a “token” (which has monetary value on a marketplace) and stored in a blockchain.

An individual piece of cryptoart is called an NFT. You can think of each NFT as a trading card or a collectible with an individual value that is also affected by the general market value of NFTs as a concept, the Ethereum network and cryptocurrency in general. Like beanie babies without the beans.

Cryptoart is bought and sold with- and has its value calculated in- Ethereum, a 6-year-old cryptocurrency that was (at the time of writing, 2 pm March 2nd 2021) trading at 1 ETH = $1476.21 USD." (https://everestpipkin.medium.com/but-the-environmental-issues-with-cryptoart-1128ef72e6a3)

Discussion

Everest Pipkin:

"A piece of cryptoart- a non-fungible token, or an NFT- cannot be swapped for another NFT without entering a marketplace. It is not the same thing as a different NFT, even if it has the same value. It cannot be cut in half. A NFT also has its contract and metadata also embedded into the blockchain- things like associated image, creator, date, owner, etc- which is the “art” part of cryptoart.

You can tokenize anything into an NFT; all this means is the metadata of that non fungible token includes information which points to an external asset like an album, a videogame character skin, an image, a url, a house, or a contract. You can also make NFTs without media attached.

To make an NFT, you have to “mint it”- register it on the blockchain. Minting an NFT takes energy, but only abstractly- it gets bundled up into lots of other transactions which take energy to solve as a block, an aggregation scheme which has allowed the NFT market to deny culpability.

To go back to Superrare’s train metaphor, the Ethereum train is running (a new block is minted) every 5 minutes, no matter how many seats are filled. However, what they don’t mention is that the train is really small and seats are valuable. The baseline Ethereum network supports roughly 14 transactions (seats) a second; beyond this, minters enter a bidding war for these seats. A bidding war incentivizes miners to compute blocks with a particular transaction in them, increasing the number of miners working on specific blocks and directly contributing to emissions.

Either way, the artists pay “gas fees” to offset this energy cost.

These fees fluctuate depending on network use, but vary between $40-$1000. These are up front buy-in costs generally borne by the artist that have no guarantee of being returned via sale- and many NFTs sit minted but unsold, with the artist having paid for the privilege.

Once an NFT is on the blockchain, it is “owned” by the person whose digital wallet it is in. Ownership in digital space is a tricky concept, but like all ownership (physical and otherwise) this boils down to a social contract; an NFT is basically a certificate that says “I am the owner of this token and its attached metadata and can do with it as I will, including resell it on a marketplace”.

It is worth noting that there is nothing in place within the technology of an NFT to guarantee that they respect existing copyright (artists have already seen their work minted and sold without their consent, sometimes still with their names attached!) and while the “smart contracts” of NFTs can control their behavior on the blockchain, there is nothing legally binding about them, as they have never entered court.

While minting an NFT doesn’t stop the associated file, image, album, or gif from duplicating or circulating, but it does mean that by this social contract a copy is not “the original” because it is not held by the owner.

There are mixed feelings about this idea- plenty of NFT artists are excited about monetizing images, plenty of people shrugging and saying it is fake ownership and doesn’t change anything about how files work online anyway (tbd- we’ll see how this settles out in legal spaces), and plenty of people horrified to see artificial scarcity imposed on digital objects." (https://everestpipkin.medium.com/but-the-environmental-issues-with-cryptoart-1128ef72e6a3)