Non-Fungible Tokens, or NFTs, are talked about most often in mainstream media when relating to the original art market; not limited edition releases, but a one-off NFT representing a digital asset which will never again be made into an NFT. This means the buyer effectively owns the “original” digital artwork, whether it’s a digital painting, photograph, video, or any other type of file. These are the types of NFTs making tens of millions of dollars as contemporary art at major auction houses, and they fetch those prices precisely because they’re a one-off; the rarest kind of art you can buy.
NFTs have many other applications though, in many types of industry, and another increasingly popular art market use for NFTs is as something more like a certificate of authenticity for special, limited edition series of art prints.
Any time you mint an NFT digital artwork, you have the option of creating any number of NFTs relating to that digital asset; you can make one to sell as “the original”, you can make thousands to sell much like a low cost print or postcard, or you could make a low number like ten, and treat it as a high value limited edition print run. Even an artist who can sell individual pieces for millions may choose to try some limited edition projects to make their art accessible to a wider audience, or calculating they can make more from a thousand prints than a singular original.
NFTs, provenance, and limited edition certificates of authenticity
Certificates of authenticity fulfil a crucial role in the art prints and limited edition market; how do you know you’re buying an official art print, licensed and approved by the original artist? Only authentic prints with clear provenance really gain much value, so they are usually supplied with a Certificate of Authenticity. Of course, COAs can also be forged or faked, which over time has led to registrars such as Tagsmart in London establishing themselves, who ensure legitimacy and maintain a detailed provenance record.
NFTs conveniently have provenance records built into them; they link back to the original creator as well as the current owner, and automatically update whenever they are bought and sold over the blockchain. As is often the case with new technology, these features were somewhat oversold to collectors at first, convincing many that NFTs couldn’t be faked. Unfortunately though, anyone can mint an NFT and pretend to be a well known real world or digital artist; this infamously happened when someone pretended to be the street artist Banksy and sold an NFT for over $300,000.
NFT auction and shop sites such as Foundation or Superrare do make efforts to ensure they are listing genuine NFTs from the original artist, however with many NFT artists and collectors enjoying their anonymity this will not always be a simple task.
So how does all of this fit together to help artists?
For art collectors, it’s clear that always the more investigation you can carry out the better; real world art registrars seem to be more reliable for attribution, but the functionality of NFTs has some benefits over COAs, especially for artists. Many registrars and galleries, such as our own Lenticular Art Gallery, offer the best of both worlds; we are registered to provide Tagsmart registration and certificates of authenticity, which offers optional blockchain registration as an NFT as well.
And unsurprisingly, many artists who manage their own work are offering art prints or original artworks with a digital NFT tied to them, providing the collector with ownership of both “originals”, and relying on the NFT as a long term provenance record, with the benefit of a commission and cryptocurrency payment system built into it as well.
Around 80% of wealth managers and online art buyers see authenticity and provenance as the greatest risk factor to the art market, and would like to see COAs become absolute standard practice for the industry. While NFTs don’t guarantee correct attribution, they make a strong provenance system accessible to almost every artist, and that can only be a positive addition to the art market.