Economic value

Next to Maalavidaa, Krista Kim used her art in her own healing process and is sharing this practice now with her followers: “Every color has a different physiological effect on the body. My work is all about energy and it is healing for me to create it” (Mun-Delsalle, 2018, Annex, p. 117). Screens, which are causing many different problems and diseases in people nowadays, should be thought about in a new way: “see the screen as a mechanism for healing and for pure consciousness” (Nft now podcast, 2021, Annex, p. 120). Refik Anadol is also particularly concerned with the issue of health. He explicitly states that a “crucial question [for him is,] […] whether art can heal people” (Capodieci, 2021, Annex, p. 220). Therefore, he and his team work together with experts in molecular and genetic fields to combine forces – art and science – to find solutions for diseases like Alzheimer, dementia or depression (Capodieci, 2021).

Overall, after analyzing these artists it seems like people are more and more conscious in their life, about what they do, what they consume and how they behave, but they still seek some guidance and inspiration in this area, which they can get from these artists. Art inspires or

“encourages creative exercises in order to release and let go of thoughts and emotions”

(Vapor95, n.d., Annex, p. 138). Thus, artists have not only increasingly embraced new technologies and integrated them into their artworks and used them as a tool for the sake of art, but at the same time address current and significant issues in society and use it as a tool for other areas in life – healing through art.

but also doubts about the NFT market were expressed. Ultimately, these opinions and outlooks influence the economic value.

Art and Crypto Market

The crypto market is still new. Nevertheless, almost all artists studied currently owe their visibility more or less to this new technology. A good implementation and belief in this future and an assumption of economic value have done the rest to develop a wave of excitement that, however, according to some opinions, "[is] not a bubble" (Trapital Podcast, 2021, Annex, p.

201). Some artists address this “crypto era” in their artworks, depicting different cryptocurrencies, extreme wealth and fluctuations, or talking about broken old structures (see Figure 4.10 and 4.11).

Figure 4.10: Trevor Jones Bitcoin Bull. Source: Annex, s. 6.

Figure 4.11: Anna Dream Brush, Cutout from Leprecoin. Source: Annex, s. 16.

Overall, a positive sentiment among the selected artists about NFTs could be recognized, with

right moment, since it gives the digital artwork value and it makes it “rare”, unique: exactly what we were missing” (Brizi, 2020, Annex, p. 57). The artists were waiting for something like NFTs to happen but still questioned if the people were ready for this step (Nft now podcast, 2021; Cascone, 2021). In fact, they were, and some of them “believe[] […] that NFT was a reaction to those who do not see digital arts as a real art form” (Yasar, 2021, Annex, p. 231) and “it’s a fertile ground for the “future of ecommerce and art”” (Klein, 2021, Annex, p. 246).

Although it should be noted that a few artists approached NFTs somewhat cautiously at first. There is a certain amount of technical understanding required, and it is also a huge change for artists who may have created more physical works in the past. Also, a wide variety of industries are now represented in the NFT business and "it can feel a little overwhelming to determine what artists are worth paying attention to" (Morozova, 2021, Annex, p. 31). Another problem that Krista Kim addresses is permanence: "Part of the problem in the video game world […] is obsolescence, for instance if a domain name is no longer registered. […] What does permanence mean in this experience economy where things are so transactional, so ephemeral, and so disposable“ (Estorick, 2022, Annex, p. 99)?

As already discussed in chapter 2.2.1, scarcity remains as long as there is no saturation of the market or oversupply. However, among the artists, besides the supply and the question of how much they actually produce as an artist, the limited attention of people is also used to describe the scarcity effect – “the ultimate scarcity is people’s attention and how much time they have” (Brizi, 2020; Estorick, 2022).

Value through scarcity – artistic features

The artworks’ value rises when a specific scarcity can be constated. Especially for NFTs, the market is based on the principle of scarcity. Two themes were apparent among the artists when it comes to scarcity: Rarity through artistic features and exclusive access.

The artists achieve rarity or scarcity in their artworks through special artistic features, some of which would not be possible without the existence of NFTs. For instance, Mad Dog Jones has built an NFT collection, Replicator, which automatically generates a new NFT every 28 days until it reaches a certain generation. The collection represents a photocopier, which can also have a dropout in real life. Thus, an automatism was built in, which can let the generation end early to create even more scarcity (NFTexplained, n.d.) (see Figure 4.12, 4.13 and 4.14). Others, like Yam Karkai, used an algorithm to assemble the NFTs for her World of Women (WoW) collection based on 200 designs she did herself (Christie’s, 2022).

Figure 4.12: Mad Dog Jones Instagram Post. Source: Annex, s. 23.

Figure 4.13: Mad Dog Jones, Replicator Gen 3. Source: Annex, s. 24.

Figure 4.14: Mad Dog Jones Instagram Post. Source: Annex, s. 27.

Another major topic in this area is the metaverse. Six artists are already actively building their own metaverse, where their artworks as well as other benefits can be experienced. The metaverse is new, it is in many parts still an idea rather than fact, and by leading the way in

incorporating additional digital features into physical as well as digital artworks, which can be achieved by scanning a code, for example. Overall, the artists are expanding their product range from "simple" artworks to entire games, worlds and experiences (Calandra, 2021; Christie’s, 2021; Coin Rivet, 2019; Estorick, 2022; Fewocious, Annex, s. 34; Trapital Podcast, 2021; Yam Karkai, Annex, s. 6).

Value through scarcity – exclusive access

Another mechanism artists use to create value through scarcity is exclusive access. Four artists applied this by giving their followers access or priority to new artworks or events if they already owned a certain NFT from the past. For example, Fewocious held exclusive paint parties for these owners, Micah Johnson gave them a free NFT via airdrop, and with Mad Dog Jones owning an NFT meant ownership of more automatically generated NFTs in his Replicator series (Fewocious, Annex, s. 25; Kinsella, 2021; Langston, 2022). However, there is also some criticism, since these NFTs can mostly be acquired in a certain price range and almost create an "own elite" in the crypto world. Likewise, the waiting list to get into Refik Anadol's

“Dataland” is for example already closed (Anadol, n.d.) (see Figure 4.15). Through this mechanism, artists manage to create an exclusivity and movement in the market, which is characterized by speed and prosperity and, the sooner one is in, the better.

Figure 4.15: About Dataland and Wait List. Source: (Anadol, n.d.), https://dataland.art/.

The aim of this study is to find an answer to the SQ1 of how the use of NFTs innovated the value proposition of artists. Artists are taking advantage of the technological possibilities by shifting their entire offering, their artwork, partially into this new reality or creating new things with it. The cultural value of the NFTs of the artists is thematically interesting to analyze, however, it has changed decisively only with some artists through the use of NFTs. The innovation here was more through new application methods such as virtual reality, the use of codes, airdrop and artificial intelligence. The economic value, however, looks rather different.

NFTs are a new building block in a whole complex of new possibilities. NFTs have enabled artists to increase their economic value through scarcity (artistic features or exclusive access). De la Torre (2013) has differentiated cultural and economic value, which could also be confirmed in this study. However, the change in cultural value has less to do with NFTs per se than with the whole virtual reality and metaverse movement, through which aesthetic, social and spiritual values can be conveyed. Economic value, as stated by de la Torre (2013), is determined by the physical market, which in this case is achieved through access and exclusivity (in the virtual as well as physical market) and fundamentally entail the innovation of now being able to differentiate works of art with a digital certificate of provenance.

Furthermore, Kapoor et al. (2022) have already stated in their study that it is less about the NFT image value than about "branding and metadata" (Kapoor et al., p. 3). This cannot be confirmed one-to-one by this study, as the artists studied consistently showed a strong artistic as well as cultural character. However, it should be noted that initial success in the NFT business is beneficial for further publicity and attention, which has a positive iterative effect.

In other words, part of the economic value is determined by past sales and price figures (Kapoor et al., 2022). Nevertheless, branding is important for artists, especially when it comes to value

their NFTs. In addition, when it comes to the emerging metaverses of these artists, branding and making the benefits clear to the users is evident. Overall, one could say that the use of NFTs has started a fundamental innovation of the value proposition of artists, but further innovation in cultural value (use of technology) and an overall rethinking of the possibilities made the innovation complete (and not finished yet).