Rethinking Value And Economics: Can NFTs Democratize the Art Space?

Author: Rachel Martin

Image: https://www.pexels.com/photo/colorful-arts-hanging-on-wall-2372978/

More often than not, the stories we hear of NFTs regard millions-of-dollars sales for pieces that seem to be nothing more than collectible digital icons. The idea of NFTs at the start was to not continue the art market’s seemingly inaccessible sales, democratizing the art space and making it available for any and all collectors.

Has this happened? In many ways, no. And in others, yes. And further still, there is hope that it can still change for the better.

Who seems to have access to NFT purchases now?

By and large, the sales of NFTs have been targeted to wealthier millennials. In some ways this is a change, countering the older generations of wealthy, art-owning individuals and patrons. However, it is still a game for the wealthy. Articles discuss millennials wishing to “diversify their portfolio” with such purchases, while many millennials don’t have a portfolio to diversify at all.

This week, Art Basel showcased that the traditional art market was still alive and well. On the other hand, there are also many NFTs that are selling for wholly reasonable prices that anyone can purchase should they have the knowledge and access to blockchain marketplaces. Some of the sales at Basel were closer to 25,000 EUR, or 8 ETH. If you are an owner of cryptocurrency, you may be more able to purchase NFT artworks than you think.

What does “democratization” mean?

To the author, the term “democratization” in terms of the NFT art space would involve more simple access to NFTs at more reasonable prices, as well as sales to those who do not regularly purchase artworks. In terms of decentralized technologies, “democratization” generally involves opening up opportunities of ownership (essentially democratization of ownership). Currently the NFT market seems to be focused on recreating the same systems that previously existed in terms of art trading, and this democratization is focused on those who have the capital to purchase artworks through the blockchain or otherwise.

Do NFTs have the power to change the art market?

Because NFTs exist outside of the traditional art market, they offer incredible opportunities outside of regulated systems to change not only who can buy works of art, but how they can buy them. As NFTs are being sold by music groups, artists, and anyone who knows how to “mint” their works, the door is open for change.

Restructuring our relationship to economics in the art world comes from a deeper understanding of cryptocurrencies and their relationship to these online purchases. Because these currencies fluctuate so wildly, purchases themselves fluctuate. As cryptocurrencies tend to be seen as an incredible opportunity for democratization, it is only natural that this would filter into the purchases made with such currency, including in the art market.

In conclusion, NFTs’ power to change the art market and economic relationship therefore depends on a larger question relating to cryptocurrencies. However, because they are not tied to traditional structures, the opportunity for us all to restructure our relationships to owning artworks provides a large ability for positive change.