Cryptoart is any unique digital creation authenticated to a distributed ledger. For most, this definition is not enough to explain the origins of this art form and how its value is determined.
As the 21st century progresses, new generations value digitized products and economies more, including works of art. social networks and CRYPTOCURRENCIES are on the rise, making it simpler and more attractive than ever to transact online.
The definition of what is considered art is constantly evolving and crypto art is at the forefront of the latest wave, challenging perceptions of novelty, value and authenticity.
It’s hard to establish exactly when the first piece of crypto art was created, but the consensus seems to be that Mike Caldwell’s Casascius Coins were some of the earliest examples. These physical metal coins were minted in 2011 and each contains a private key on an embedded sheet of paper containing the digital value of Bitcoin. Once redeemed on the blockchain the cryptocurrency value associated with the physical currency is transferred to that user’s account.
The Rare Pepe crypto project was created by global artists between 2016 and 2018, based on the internet meme “Pepe the Frog”, and traded as NFTs on the CounterParty blockchain. In October 2021, a Rare Pepe – PEPENOPOULOS – sold at a Sotheby’s auction for US$3.6 million.
The popularity of crypto art exploded in 2020 when artist Beeple sold a collection of illustrations and animations titled Everydays: the First 5,000 Days. The sale made him the third most valuable living artist in history, earning him a whopping US$69.3 million at the time of purchase.
Fast forward to 2022 and cryptoart has taken on a primarily digital presence. Contemporary examples include .jpeg files, Internet memes, GIFs, 3D virtual renderings, video clips, and music.
The value of these works of art is linked to non-fungible tokens (NFT), verified and insured by distributed ledger technology (the blockchain). Given the digital nature of these pieces, replication is simple. However, as with physical art, there can only be one original composition.
NFTs authenticate cryptoart, providing an immutable fingerprint of ownership. To better understand what this means, think of NFTs as unique identifiers tied to individual works of art. When cryptoart buys, sells or gives away an NFT the transaction is recorded and validated throughout the blockchain network.
This method of certification is perhaps more definitive than the practices used to verify physical works of art, such as paintings and sculptures. In these cases, historians and experts establish legitimacy by analyzing tangible elements of the art. As time goes by, the means to confirm authenticity naturally decreases.
Rather, blockchains are designed to be decentralized, perpetual ledgers that exist in peer-to-peer networks.
Crypto art concerns
Easily the most troubling issue threatening the longevity of this groundbreaking art form is its environmental implications. The validation of transactions on the blockchain is known as crypto mining.
This process involves solving complex mathematical equations to unlock encryptions. Due to the profitable incentives (cryptocurrency rewards) offered for these mining tasks, people employ significant volumes of computing power that waste huge amounts of electricity.
There are a few different approaches that try to change the way transactions are validated in an attempt to be less ecologically damaging. Instead of a proof-of-work concept that drives competition among miners to solve cryptographic algorithms, a proof-of-stake mechanism randomly selects validators to verify transactions. This process substantially reduces the amount of wasted electrical resources.
Other solutions include carbon credit trading, although these are validated on the blockchain, and real-world environmental acts, such as tree planting and waste management initiatives.
Intense volatility, reluctant real-world adoption, and accessibility issues have encouraged consumer advocates to call on governments to regulate cryptocurrency markets.