The art of making millions (by accident)

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Non-fungible tokens (NFTs) sound like fun. The latest blockchain craze turns obscure artists into millionaires overnight. This includes two Swiss artists who stumbled upon a pot of gold while tinkering with the new technology themselves.

This content was published on November 11, 2021 – 3:02 PM

swissinfo.ch

The blockchain world is constantly throwing out weird stories and NFTs are no exception.

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What are NFTs? Non-fungible (unique) + token (digital code that lives on the blockchain) = unique bits of blockchain digital code.

Great, but what are they doing? They can be programmed as deeds of engagement or property contracts for objects such as art. Blockchain is a convenient digital system that transparently and up-to-date records of who owns, sells and buys such contracts.

Imagine making a living as a digital artist when anyone can make perfect, unlimited copies of your work. The answer is to attach an indelible digital anchor to the original. NFTs fulfill this task and can be programmed to automatically send royalties to the artist when their works are sold.

“Traditionally, an artist has a chance to make money with his work, and then there isn’t any more. You don’t see any royalty returns in the secondary market, ”Johannes Gees, one of the two Swiss artists in question, told me. “With the NFTs, the artist is in charge. This little thing changes my whole position in the art market, in my favor.

Gain momentum

It is a story that I have heard over and over again this year. A number of artists, including Geneva-based Charlotte Qin, lined up at the Crypto Valley conference in Switzerland last month to talk about how NFTs are transforming the art market.

The NFT art market has really taken off this year, with American artist Beeple selling a piece for $ 69 million. CryptoPunks, a blocky digital character series, has proven to be a runaway success for Larva Labs.

And it’s not just art. Twitter founder Jack Dorsey sold an NFT linked to his very first tweet, while Tim Berners-Lee successfully auctioned an NFT of the original World Wide Web source code. Even the Swiss Post has tried NFTs, linked to postage stamps.

This was all far from Gees’ thoughts when he started the Kleee02 NFT project in early 2019 with fellow artist Kelian Maissen. “We were just playing to see what was possible. It was like a proof of concept.

A few friends bought a handful of the 360 ​​NFTs created and then nothing. “I actually started losing interest because I thought no one really understood NFTs,” Gees explains. “There was some hype earlier this year, but I thought it was just hype.”

Glitch in the system

In August everything changed. Within days, all of their remaining NFTs were recovered and the two artists suddenly found themselves sitting on loot worth around CHF 1.4 million.

The paper thin catalyst was the fact that investors were noticing that the Kleee02 NFT launched the same week as a successful NFT Cryptopunk in 2019. That was all it took to make Kleee02 a daily hit. on the next day.

But there was a problem. The DIY system, built by two blockchain enthusiasts, couldn’t keep up with the sudden demand, meaning several investors didn’t get what they paid for. Some rushed repayments have reduced artists’ income to around CHF 1 million, but that’s still enough to invest in future NFT projects, Gees explains.

So what can we learn from all of this?

The NFT hype has reached its boiling point, but we don’t yet know if this is another blockchain bubble ready to burst. The outrageous sums lavished on NFTs usually come from cryptocurrency millionaires who want to support the latest blockchain craze. The connection of NFTs to the mainstream market will, as always, be proof that this pudding tastes good or crumbles the moment it comes out of the oven.

Gees says NFT technology has improved since he built his flawed model. Kleee02’s story, with its associated issues, is typical of the open source blockchain “anyone can try” scene. Bugs, hacks, and squeaky coding have marred some crypto exchanges and decentralized fundraising projects in the past – and likely will continue to do so. A robust technical infrastructure, combined with rules guaranteeing investor safety, is still under construction.

Inevitably, less healthy stories emerge – of artists seeking to inflate prices by buying their own NFTs for big bucks or of money launderers being lured into the craze. It’s worth noting, however, that almost every asset attracts disreputable characters and practices.


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