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NFTs Are Booming, But They’re Nothing New in the Art Market

Tokens backed by digital art may seem weird, but they have a precedent in photography collecting.

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Photo Illustration by 731. Photos: Getty Images (2). Shutterstock (1).

Four months after Pablo Rodriguez-Fraile spent nearly $67,000 on a digital artwork of Joe Biden and Donald Trump in the nude, the piece had transformed. Designed to respond to election results, it had morphed into a naked, graffiti-covered Donald Trump lying on a trash-strewn lawn. The price changed, too: Rodriguez-Fraile sold it for $6.6 million. “Obviously, I thought it would take a bit longer” to appreciate in value, says the 32-year-old with an MBA from Columbia, who describes himself as a digital asset investor. “Having said that, funnily enough, I actually think it was a fantastic deal for the buyer.”

The work in question is a short video created by Mike Winkelmann, an artist who goes by Beeple. But what Rodriguez-Fraile sold was not an everyday video file. The art is attached to something called a nonfungible token, or NFT. Like the cryptocurrency Bitcoin, NFTs run on blockchain technology. Unlike Bitcoins, each NFT can be a unique digital property—one NFT can represent ownership of a specific work of art. It can also be designed to suit a creator’s needs: NFTs connected to Beeple’s artworks, for instance, give him a 10% royalty every time his art changes hands. Far more important, Beeple’s NFTs have his signature and proof of sale built into their code. There’s no way to fake or forge or replicate one of his artworks, at least as long as the NFT is considered integral to the work.