Note: a heavily revised version of this post has been published on The Conversation.

I’ve been following CryptoArt on Twitter roughly since Jason Bailey first posted about it a few years ago, and I’ve been very skeptical of it. Now that it’s blowing up, and a lot of artists that I respect are active in it, I feel like it’s worth taking seriously. I don’t imagine that I would ever purchase CryptoArt myself, but I would like to at least understand it: why would anyone buy CryptoArt?
Here are some ways to think about it in the context of conventional art.

Note: certain types of blockchain enormously accelerate catastrophic climate change [1, 2], and so you should avoid these kinds of blockchain entirely.

CryptoArt grid
CryptoArt works scraped by Mario Klingemann

What is it?

Here’s a brief, nontechnical introduction: when you “buy” a piece of CryptoArt, a digital record is created that says that you “own” the artwork. This record, called an NFT, is stored in a shared global database. Ownership confers no particular rights, other than being able to say that you own the work. You don’t own the copyright, you don’t have a physical print, and anyone can look at the images on the web. There is merely a record in a public database saying that you own the work—really, it says you own the work at a specific URL. This database is decentralized, using cryptography and blockchain, so that no single company or individual controls the database of ownership. As long as that specific blockchain survives in the world, anyone can read or access it, and no one can erase what is already written there. Most of the interaction happens via online marketplaces, though theoretically anyone proficient in programming can read or write to the database.

Your digital “wallet” determines your digital identity. If you buy from an artist, you somehow have to establish digital identity outside of this system; and, in fact, artists’ work are being sold as CryptoArt without the artists’ knowledge or permission. (In more technical terms, a “wallet” comprises solely a private key and a public key for cryptographic signing—your “wallet” is basically just two very large numbers that are unique to you.)

(Thanks to John Collomosse for patiently answering a lot of my technical questions about CryptoArt.)

Why Do People Buy Art

There are many different reasons people buy art. People often think it’s purely about the intrinsic value of the work, but there’s much more to it than that.

Take a moment to think about the reasons why you buy original works of art. Suppose you could buy an exact replica of the original work that was cheaply made in a factory, rather than directly produced and signed by the artist’s hand. Would you? If not, why not? What makes the original desirable and valuable? (And, if you don’t seen any point in buying original art rather than reproductions, then perhaps CryptoArt is not for you.)

Art for your home. Speaking for myself, I only buy art for my walls, period. I want art to surround my living space, to please and inspire me visually. It’s something to stare at when I’m staring off into space, lost in thought; it’s something to contemplate, and something to inspire reflection upon the ideas and experiences associated with the work. In addition to paintings and prints that I’ve purchased, I also have some of my own watercolor paintings and photos on my walls.

Some prints on my walls
Some art on my walls from artists who's work I love: Helena Sarin, Zach Lieberman, Patrick Tresset, Tom White

Social reasons to buying art. Art plays social roles. I want friends and acquaintances to enjoy visiting my home. Art helps creates a sense of space and provides conversation topics. It communicates my interests and taste. I want to support artists and the arts, and buying from them directly does this as well. Artists need money just like everyone else. Visiting art galleries and fairs is a social activity, and I enjoy meeting the artists themselves and participating in the community when I can. Art can also be a unique gift as well. (I’ve only given my own paintings as gifts; I haven’t bought art for this purpose).

Building collections. Personally, I have no particular interest in collecting art that sits in my closet, unviewed, but I can see the appeal. People can get into collecting all sorts of things—model trains, commemorative plates, rare vinyl LPs, signed autographs—and collecting becomes an engaging hobby in itself, trying to hunt down that rare piece. Collectors form communities with likeminded collectors, sharing their knowledge and competing for finds. The collection itself can express a particular point-of-view or the collector’s taste, a bit like making a mixtape or playlist.

Art for the ultrawealthy. Perhaps the most visible form of art collecting today—and the one that drives so much of our public discussion about art—is the art purchased for millions, the Picassos and Damian Hirsts traded by the ultrawealthy. As I understand it, while the scale is different, the underlying reasons they buy art are the same as the rest of us. After all, once you’ve bought your second yacht and your fifth home, what else are you going to do with your money? You can own a unique Jeff Koons sculpture that your friends won’t own. There are social activities, at Sotheby’s auctions and fancy museum Board dinners. One wealthy art patron I read about compared attending art auctions to shopping for handbags. Some wealthy patrons see philanthropic value in their efforts, in supporting the arts, and creating collections of important works that will be eventually donated to museums.

(By the way, the resources I’ve found most useful for learning about this high-end world are the book Seven Days in the Art World, and the documentaries The Price of Everything and Blurred Lines: Inside the Art World.)

Art as investment and financial instrument. I think that many people buy art in hopes that it will appreciate in value. I suspect this is almost always a mistake, unless you really know what you’re doing (e.g., dealers who know the market and their customers well), or are ultrawealthy, and even then it is questionable. And, high-end art is thought to be widely used as a tool for tax evasion and money laundering.

So Why Buy CryptoArt?

If you look at that list of reasons to buy art, almost none of them require a physical work of art. Only for art for your home do you need a physical object. Every other reason for buying art that I listed above potentially applies to CryptoArt. You can build your own virtual gallery online, and share it with other people online, sharing your taste, interests, patronage of the arts, and/or wealth with anyone online that cares to look. Crypto enthusiasts are saying good things about the community around crypto. Artists are saying they can get paid whereas they were excluded from the mainstream art world. People are collecting art. And there’s currently CryptoArt for sale in the range of hundreds of dollars to literally millions. A rare few are doing very well: Beeple, a computer science graduate who didn’t originally consider himself an artist, has just auctioned a CryptoArt piece at Christie’s for $69 million.

Aside from whatever visual pleasure the physical object gives you, nearly all the value art offers is, in some way, a social contruct. This does not mean that art is interchangeable, or that the historical significance and technical skill of an Ingres painting is imaginary; it means that the value we place on these attributes is a choice. With conceptual art (e.g., Marcel Duchamp, Sol LeWitt, John Baldessari, Sherry Levine) art can be in the concept as much as in the instantiation. Maurizio Cattelan sold a banana duct-taped to a wall for six figures, twice; the value of the work was not in the banana or in the duct tape, nor in the way that the two were attached, but in the story and history around the work. CryptoArt takes this one step further, taking the notion of ownership to pure abstraction.

I believe that art is fundamentally a social activity, and, the more our social lives are lived online, the more it makes sense that our art collections do too. If you mostly interact with people online, you can’t show off your art collection at home to your friends if you only interact with them online. Displaying your CryptoArt purchases in an online gallery lets you share your taste, interests, patronage of the arts, and/or wealth with anyone online that cares to look.

With so much of our lives being lived online, in makes sense for art collecting go digital too. In the digital world, we have social interactions with strangers through social media; so many people are intensely involved with online communities of people they’ve never met. Video games are an early example of these social communities, where people work to grow their collections of badges, FarmVille/Animal Crossing plots, and in-game hats, often spending real money for these virtual collectibles. These things are valuable sometimes because they give you a sense of accomplishment, but also because you can show them off to other people playing these games.

Furthermore, it is absolutely wonderful that artists are making money on this, especially when they have been otherwise been struggling with the exclusiveness of the art world or the pandemic. More art, more artists!

Where Does Value Come From?

Here’s a common take:

Sure you can sell NFTs for bridges or numbers. But this misses the point.

In CryptoArt, there is an implicit contract that what you’re buying is unique. The artist makes only one of these tokens, and the one right you get when you buy CryptoArt is to say that you own that work, and no one else can. (Note though this is not a legal right nor is there any enforcement other than social mores). Hence, value comes from the artist creating scarcity.

And this is the same thing that’s happened in the art world ever since photographers had to figure out how to sell their work. In the world of photography and printmaking, a limited edition print is considered more valuable than an unlimited edition; the fewer prints in the edition, the more valuable they are. Artists create value in their mechanical reproductions through artificial scarcity, and CryptoArt is an extension of that.

Original paintings are generally seen as more valued and more desirable than prints and photography, which has often had a somewhat second-class position in the art world. There can be an emotional connection to knowing that the artifact in front of you was made by an artist’s hand, this is perhaps the same “aura” that Walter Benjamin spoke of. This connection is somewhat diminished in photography, though seeing the artist’s handwritten autograph and knowing that they did the exposure and production themselves still helps produce that connection. This connection is even more tenuous in digital art, particularly for traditionalists. But, all of these things are seen as valuable in some circles.

In CryptoArt, that feeling of connection to the artist is even more diminished, but it’s potentially still here. In a sense, what you are buying is a connection with the artist. Perhaps this connection is part of the importance of all the Tweets from artists publicly thanking people for buying their work: this helps reinforce that connection the buyer feels with the artist.

Depending on your point of view, CryptoArt could be the ultimate manifestation of conceptual art’s separation of the work of art from the instantiation. It is pure conceptual abstraction, applied to ownership. Or, CryptoArt is the ultimate in cynical capitalism, reducing art to pure conspicuous consumption and further commodifying relationships.

In Victor Pelevin’s satirical novel Generation “П”, the main character visits an art exhibition where only the names and sale prices of the works are shown. When he says he doesn’t understand—where are the paintings themselves?—it’s made clear that this isn’t the point. Buying and selling is more important than the art.

(Thanks to Alyosha Efros for telling me about Generation “П”.)

Why Not Buy CryptoArt

The main reason not to buy CryptoArt is entirely obvious: because CryptoArt is entirely ridiculous. It is insane to buy what is, in computer terms, just a pointer. You are literally buying nothing. Moreover, since they are infinitely mintable, people can create all the NFTs they want about anything, over and over again.

For me, I want hang art that I love on my walls, so I have no interest in buying CryptoArt.

That said, if buying it right now gives you pleasure, and you enjoy sharing what you’ve bought right now, and you’re enjoying the community around it, that’s great.

If you’re buying it for some future reward, well, then that’s risky. Will people care about your digital wallet/showroom in the future? Will you care? Will CryptoArt even be a thing in a few years? Who knows?

It’s a fad. There have been lots of fads before—mood rings, pet rocks, Rubik’s cubes, beanie babies—things that were all the rage, flying off the shelves one year, and then filling up landfills the next. It’s easy to get caught up in the fervor one minute and then wonder what you were thinking in the next. Even if CryptoArt lasts, maybe the particular artist or platform you’re buying won’t survive.

It’s a bubble. Why are prices so high? The exponentially rising prices, the massive hype, the absolute confusion about long-term value, some sales that seem truly worthless: all these things indicate a bubble. It just seems inconceivable to me that frequent six-figure prices reflect true value, in the sense of these works having higher resale value in the long-term. Like in the traditional art world, there are a lot more works being sold than could ever possibly be considered significant in a generation’s time.

It supports illegal activity. It seems likely that the bubble is driven, at least in part, by bad actors and price speculators. CryptoArt seems almost purpose-built as a haven for criminal activity? What are two big tools for money laundering and tax evasion? High end art sales and bitcoin. Combining them gives the anonymity of bitcoin with the respectability and the veneer of fine art world. How do you feel about the fact that your art sales might be providing a home for illegal and unethical behavior?

Nothing is zero-trust. The argument for blockchain is that things are completely decentralized and there is no government regulation, in theory; you can have real transactions without trust. The problem with blockchain is that things are completely decentralized and there is no regulation. It’s trivially easy to “steal” an artist’s work and sell it on one of these marketplaces. As a buyer, you need to confirm that you’re actually buying from the artist via some other means outside the blockchain. You can also limit your buying to marketplaces that are more exclusive, in which case the marketplace becomes the arbiter of trust.

What other attacks and points of failure are there in this lawless world where anyone can write to the blockchain without regulation or enforcement? Will this theft become widespread, poisoning the well?

Environmental costs. Also, as mentioned above, proof-of-work systems entail catastrophic environmental costs and you should not buy in these blockchains.

Over the past few days, I’ve seen a groundswell on Twitter toward a marketplace called hit et nunc, which seems to be more sustainable. But maybe this will change again a few days later; things are changing so fast right now.

For all the reasons that I’ve listed, I personally cannot see myself ever buying CryptoArt, other than just to try it out. This may also reflect my social circles—my friends and colleagues care about this a whole lot less than I do—as well as my place in life and relationship to art. Were these things to change I might be interested, and that seems like a very unlikely.