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Purchasers of NFTs may be rewarded with perks. Bored Ape owners have access to chats and live events with the community of other owners. Owners of the LFC Heroes Club, an NFT collection created by the Liverpool Football Club and sold through Sotheby’s, can meet players and get discounts on merchandise.

Nathan Yu, Fashion Business Management ’18, created limited editions of NFT trading cards featuring K-pop stars, with a tiered system of perks. Yu is chief strategy officer of KStarLive, a South Korea-based media company producing K-pop news for a global audience. The NFTs featured short videos of K-pop stars from a KStarLive music TV series called The Show The digital cards were sold as mystery boxes for about $20 each in crypto, so fans didn’t know which star they would get. Also, the cards were classified according to rarity and came with perks that scaled from “common” to “legendary.” Fans who won one of 40 “epic” cards could attend The Show tapings for life; one “legendary” winner also got a free trip to Seoul, South Korea. Yu used NFTs for a few reasons. First, in the K-pop world, there are a lot of scalped tickets and unlicensed merchandise, so bringing authenticity to the trading cards cut down on fraud. Second, many K-pop fans live in places without sophisticated banking systems, so cryptocurrency could make international purchases easier.

Next, KStarLive will roll out profile picture NFTs images of K-pop icons that fans can use on their social media profiles. Having a valuable profile picture “is a new way of flexing with this generation,” Yu says.

NFTs vs. the Art World

like making a copy of a Van Gogh and selling it as if it were real. If you buy a plagiarized NFT, you’ve wasted your money. Even in the seemingly ephemeral world of digital art, provenance matters.

Melton notes that NFTs raise questions for museums, too. “How is a digital artwork cared for, both in terms of conservation and questions of deaccessioning?”

Despite these concerns, artists are still exploring the medium. C.J. Yeh, professor of Communication Design Pathways, minted his first NFT in February 2022. Without gallery representation for his NFTs, it has been a challenge to develop an audience, but he is excited by the technology. “I see this being an interesting channel for artists, designers, and brands,” he says.

Carlos Miranda, Illustration ’23, who created the art for this story, was intrigued by NFTs as a way to sell his predominantly digital art. “I’m always thinking about how I can sell my work if it’s not something physically painted,” Miranda says. “It’s hard for a digital artist like me. People don’t see that work made on a computer has much value.”

Miranda was selected to list his NFTs on SuperRare, an NFT marketplace that resembles a gallery in that it presents curated collections to buyers. The site even hosted a physical pop-up in a Soho gallery in 2022, with the artworks displayed on monitors. So far, he has sold just one.

The Future of NFTs

That March, an NFT artwork by famed digital artist Beeple sold for $69 million at a Christie’s auction—the most expensive NFT acquisition to date. But what is an NFT?

Because digital artworks like Beeple’s JPG can be copied endlessly, they have traditionally been challenging to sell. That’s where the NFT, or non-fungible token, comes in. An NFT is a digital asset, logged permanently in a blockchain or other type of digital ledger, that provides proof of ownership of something a digital artwork or collectible, a physical artwork, a club membership, a tweet, or even a house. The image file can still be copied, but the NFT establishes ownership. It’s an electronic certificate of authenticity.

CryptoPunks, a collection of 10,000 illustrations of faces minted in 2017, are some of the first NFTs and among the most valuable. They were originally given away for free; in February 2022, one resold for $23.7 million.

The Bored Ape Yacht Club is a collection of ape illustrations, minted by a group of creative technologists in April 2021. Celebrities like Paris Hilton and Justin Bieber bought them, helping to drive prices up, and a few months later, a Bored Ape resold for $3.4 million. For a while, all the cool kids wanted NFTs.

Major artists Damien Hirst, Takashi Murakami, Frank Stella have also created NFT collections. And museums have minted and sold NFT editions of their masterworks as a fundraising tool. According to The New York Times a series of NFTs created from Klimt’s “The Kiss” netted the Belvedere Museum in Vienna 4.3 million euros. So far, it does not seem to have affected the price of the physical artwork.

NFTs raise a host of ethical and legal questions for art dealers and scholars. The ability of artists to sell directly to buyers online has caused consternation among gallerists, worried that “it could make the art world obsolete,” according to Natasha Degen, chair of the MA program in Art Market Studies. Galleries serve an important purpose, she explains: They assign artwork value and keep prices steady, and without them, the value of artworks could skyrocket or plunge based on the whims of the market.

“On the one hand, NFTs offer the possibility of forging your own path as an artist,” Degen says. “But there are reasons why gatekeepers exist and why the gallery system doesn’t just show work but also offers exhibitions where artwork can be contextualized in history.”

Additionally, galleries offer consumer protections not available in the Wild West of the internet, says Paul Melton, associate professor of Art Market Studies. And most of the traditional galleries also curate NFTs. Without the help of a gallery, naive buyers could lose staggering sums—on a digital artwork that drops precipitously in value, for example.

Legally, NFTs raise even more issues. Degen points out that bad actors can mint and sell NFTs out of artworks that are not their own. It’d be

In 2022, NFT sales slowed considerably, and many questioned whether there was a future in digital art. A Bored Ape that Justin Bieber bought in January 2022 for $1.3 million was worth only $69,000 by November.

Remember those Klimt NFTs? At press time, they were listed on OpenSea for as low as 0.56 ether (about $870), less than half of the original price. And an NFT of Jack Dorsey’s first tweet, which sold for $2.9 million in 2021, was pulled from auction in 2022 after the top bid came in at a paltry $280.

“The market got overheated, and there was a lot of excitement,” Degen explains. “There’s definitely been a correction, and we probably won’t see prices go quite as high as they have been.”

Still, Degen sees a future in this method of digital authenticity. “We live in a digital world, and digital art is going to be important going forward,” she says. “All major businesses in the art world have incorporated blockchain, cryptocurrency, and/or NFTs.”

Renee Leibler, who teaches Web3 technologies in the Entrepreneurship Department, doesn’t know if people will be minting and buying NFTs in the future, but she believes the underlying concept remains important. “Whether or not you think NFTs are going to be a bubble, you cannot discount the fact that you now have digital authenticity, which can relate to art, domain names, scientific papers, or music. We’ve never had that before.”