Taos County resident Cory Marchasin, company founder and former CEO, sold a photo of his foot for $ 3 online. Marchasin attempted to sell it for 400,000 Ethereum (which is a unit of cryptocurrency), but said he sold it “immediately” after lowering the price. The image of its foot is known as a non-fungible token or NFT. NFTs exist exclusively online and their popularity has increased significantly over the past year, but have been around since 2015.
An NFT is a verifiable digital asset such as digital art or other collectibles that exists on a digital ledger of networked computer transactions, otherwise known as a blockchain. Ownership of an NFT is verified by a user’s digital signature.
While some may value Marchasin’s Foot at $ 3, other NFT artwork increases in value and price. The artist known as Beeple has sold a massive collage of his artwork for $ 69.3 million with auction house Christie – the largest for which an NFT has sold. NBA Top Shots is another NFT art with hefty prices – think basketball cards with a short video clip. A LeBron James NBA Top Shot plunging a basket sold for $ 230,032. Even former First Lady Melania Trump is capitalizing on the NFT’s popularity craze by selling an item titled “Melania’s Eyes.” It was criticized by “Matrix” actor Keanu Reeves and musician Brian Eno who described the craze as “a way for artists to get a small slice of the action of global capitalism.”
“If you are truly a great artist, then there is a good chance that and whatever medium you choose to produce your art, someone will see it as a valuable asset class,” Marchasin said.
He said he thinks questioning the value of NFTs is comparable to someone questioning the value of an Ed Sandoval painting or the hold Van Gogh’s “Starry Night” might have. on him.
“People have argued for hundreds of years about this, the inherent value of art as an asset class,” Marchasin said.
However, he said he didn’t think there would be much resale value on some NFT art 50 or 100 years from now, unless it was one of the first GIFs. on the Internet. For example, an NFT of the Nyan Cat GIF, an 8-bit animated cat with a Pop Tart body from 2011, sold for over half a million dollars in February. Marchasin said that millions of GIFs of similar cats exist and that they have no scarcity to create value. However, he doesn’t rule out the possibility that cat GIFs and other NFT artwork will become collectibles in the years to come.
“I like the idea that a bunch of these stupid NFTs will have a market 50 years from now because someone likes to collect antique NFTs,” Marchasin said.
One of the main popular NFT artwork in circulation is from the Bored Ape Yacht Club – cartoon primates that made the cover of Rolling Stone magazine and were popularized by celebrity ownership. One of the 10,000 in the collection currently sells for around 53 Ethereum, or nearly $ 204,000.
Another Taos County resident Molly Byrnes, with the self-proclaimed title of “Intergalactic Internet Witch,” sees the potential of NFT art to go beyond the terse-looking monkeys of cartoons. Byrnes got into NFTs in January and started selling NFTs on OpenSea. She is also engaged in NFT communities through the Clubhouse social media app. She sees many potential opportunities for Taos artists and a way for communities to come together.
“I think NFTs seem to be right now, sort of… like the entry point into blockchain for a lot of people. And [NFTs] I think they’re going to be used as tickets or a club membership, or a way for people to fundraise for the creative vision they want to do and find their community, ”Byrnes said.
On January 11, Byrnes will teach an HIVE course at the University of New Mexico-Taos, “Intro to NFTs,” which will explore Cryptoart, Web3.0, and blockchain for all ages and levels of web experience. The class will help students better understand NFTs and other metaverse terms and concepts.
“I think NFTs seem to be right now, kind of like, they’re like the entry point into blockchain for a lot of people,” Byrnes said.
Byrnes doesn’t find some of the popular NFT arts “very compelling” and said it reflects whoever is currently exploiting the space.
According to a September study by Pew Research, 16% of American adults have personally invested, traded, or used cryptocurrencies like Bitcoin and Etherium. The study also indicated that 18 to 29 year olds are particularly likely to say they have used cryptocurrencies. Bynes hopes for more diversity between race, gender, class and age with the creators of NFT.
“That’s why I’m so passionate about bringing the concept to you know, the diversity of people. because there are so many, there are so many cooler things we could do, ”Byrne said.
The lack of diversity among the creators of NFT is not the only criticism of NFTs.
Max Dilendorf of the New York City Dilendorf law firm, specializing in NFTs and cryptocurrencies, told Taos News to learn about the cryptocurrency law, such as the report “Cryptocurrency: An Executive ‘application’ 2020 of the Ministry of Justice. He said sellers and buyers should exercise “due diligence” when browsing the crypto and NFT spaces and seek legal representation where necessary.
“People who get involved in NFT don’t realize that they can be very, very dangerous. And so when you… maybe as an artist entering NFTs, there are a number of very, very serious legal considerations that you have to keep in mind, ”said Dilendorf.
Dilendorf added that possible criminal charges may arise from failure to comply with the bank secrecy law, which detects and prevents money laundering. He said reselling an NFT can easily go from being an art to a medium of exchange or money.
He said others can get into legal trouble with the Securities and Exchange Commission by selling and buying unregistered securities.
Recently, the blockchain company behind NBA Top Shot, Dapper Labs, found itself accused of illegally selling unregistered titles in a lawsuit.
“Don’t think you’re smarter than the system. Just follow the rules, do your due diligence on how the legal system works. You know, read the cases, ”Dilendorf said.
Byrnes doesn’t overlook the fact that people launder money through NFTs, but encourages people to be careful and determine their tax plans for potential audits. She anticipates that the IRS will hire crypto-auditors.
“I mean the important thing to know too is that our government, [is] still sort of writing rules for how cryptography works, ”she said.
Other criticisms of NFTs are the amount of energy consumed for an NFT or other crypto transactions. A May Harvard Business Review article stated that “Bitcoin currently consumes around 110 terawatt hours per year, or 0.55% of global electricity production, or roughly the equivalent of the annual energy consumption of small countries like Malaysia or Sweden.
Byrnes and Marchasin saw both sides of the carbon footprint of cryptocurrency transactions. However, they both compare that just as much energy consumption is used for a credit card transaction. Marchasin said cryptocurrencies could get “greener” in the future.
“It’s cheaper to get solar or wind power than it is to burn coal. So where are people trying to mine Bitcoin? They are trying to mine Bitcoin in dams, wind turbines, and solar farms and are trying to find ways to conserve most of the energy. I just read an article about a guy who used excess heat from his mining rigs for his swimming pool. It is therefore a driver of innovation, ”said Marchasin.
Marchasin said he would like to see more energy regulation in the form of tax cuts to incent Bitcoin mining to become more energy efficient.
For now, Wilder Nightingale Fine Art Gallery owner Rob Nightingale prefers tangible art to digital art.
“For me, it’s difficult to grasp this idea. I mean, I’d rather have a piece of art that is mine that can be hung, ”Nightingale said.
Revolt Gallery owner Steve McFarland sees great potential in NFT art, but said he is playing the “waiting game” with NFT art. He said he sees art galleries venturing more into virtual reality, digital art and NFTs, but said this scene has not spread to Taos and is unwilling to sell it.
“I don’t want to buy a bunch of screens that people can look at art on and buy it on. It’s more like I’m helping local artists and people can come to community events, do the music events that we did last year for six months, every week. It really brought people to life and a sense of community, ”said McFarland.
UNM-Taos Animation Instructor Jesse Thompson, who is keen to start making NFTs, is excited about the potential they may have for game and digital art creators.
“It’s like building a patronage for digital creators to allow them to show what they want, to show their visions and their worlds and not rely on bigger companies,” Thompson said.
For more information on Byrnes Hybrid Zoom and in-person classes, visit taos-hive.com or contact program specialist Rose Reza at email@example.com to reserve a space.