But, art on a piece of canvas? Tangible art that exists in the real world? Get with the times.
On March 12, 2021, a crypto-asset investor who goes by the pseudonym “Metakovan” purchased a digital-only artwork for $70 million from Christie’s. He paid for it with the crypto-currency, Ether.
The auction for this work of art, created by digital artist Beeple, was the first-ever sale of digital-only art by a major auction house. It also takes the form of a new kind of digital asset: a Non-Fungible Token, or NFT. The work is authenticated and certified by blockchain. The buyer is also the founder of Metapurse, the world’s largest NFT fund.
So let’s review these details: A digital-only work of art created by an artist with a pseudonym was bought by an investor tied to crypto-currencies who also doesn’t use his given name and paid the most famous auction house in the world with Ether.
Is this a sign of the times or what?
The days of tangible assets bought and sold with traditional currency by wealthy and highly visible people known to the public — those good old days are behind us.
And this is not a change devoid of meaning: There are fascinating new ideas at play in this transition. The work of art in question, called “Everydays: The First 5000 Days,” is a collage of 5,000 images, each made one day at a time over 13 years.
As the buyer said in a press release: “Techniques are replicable and skill is surpassable, but the only thing you can’t hack digitally is time. This is the crown jewel, the most valuable piece of art for this generation. It is worth $1 billion.”
“The only thing you can’t hack digitally is time.” This essentially suggests that we are moving away from what things are, and toward what they represent. For Metakovan, the value of this art is not just its expression and ingenuity, but the amount of work spent by the artist.
That’s both old school, in the sense of appreciating something for the human effort involved, and also new, in that our relationship to human creation and achievement has become as much about the creator as what’s created.
No, I’m not trying to become an art critic. I’m happy with my career in trading and investing. But, this trend is visible across the economy. More and more, we are trading tangible assets for intangible ones.
Bitcoin and all the other crypto-currencies are just a bunch of ones and zeros in cyberspace. Even paper money used to be backed by gold or other assets. Ever since US President Richard Nixon abandoned the “good as gold” Bretton Woods system, the US dollar is just the faith and credit of the American people.
Across culture and business, more and more of us are embracing digital assets, even as we continue to have difficulty ascertaining the real value of those assets.
These extrinsic assets are worth whatever you say it’s worth, or whatever the people say it’s worth. It’s an extension of this bigger system. People are beginning to realize that their money is only worth whatever the market says it’s worth, so why do we have to buy tangible things?
We see the same trend in video games, where people pay “real” money for gold or items that exist only in the virtual world of the game.
Why is this sword in League of Legends worth $50? I guess you hang it on your digital wall?
We now accumulate digital assets the way we used to accumulate physical ones. Nowhere is this more apparent — or arguably more important — than its parallel in the business world.
Just this month, digital asset investment products reached a record $5.8 billion. Still interested?