Future Tense

How in the World Did a “Digital Artwork” Sell for $69 Million at Christie’s?

All your questions about Beeple, NFTs, and a decapitated Buzz Lightyear, answered.

A detail of "EVERYDAYS: THE FIRST 5000 DAYS," a collage by Beeple.
A detail of “EVERYDAYS: THE FIRST 5000 DAYS,” a collage by Beeple. 2021/Beeple/Handout via Reuters

Exactly what just sold for $69,346,250 at Christie’s?

A collage from the artist Mike Winkelmann, better known as Beeple, who composed a new piece of digital art every day for 5,000 days starting in May 2007 and has collected them in a work titled EVERYDAYS: THE FIRST 5000 DAYS. It’s arranged as a patchwork of his pieces in somewhat chronological order. The Christie’s description reads, “Society’s obsession with and fear of technology; the desire for and resentment of wealth; and America’s recent political turbulence appear frequently throughout the work.” It is the third most-expensive artwork ever sold from a living artist. What’s notable about this piece of digital art, though, is that there’s no special in-person way of appreciating it. There are innumerable copies across the web—including at the top of this article—that you can see for free.

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Digital … art? How does it work? Does the winner actually own this piece now?

The winner doesn’t “own” the work in the traditional sense of the word. There isn’t a painted canvas to stow away in a bank vault, though the winner will get a digital file and some rights to display the image. The real prize that people were bidding for is a sort of cryptographic certificate of ownership attached to the work known as non-fungible token, or NFT. The owner can sell that certificate on a blockchain, the digital ledger technology that underlies cryptocurrencies. However, with NFTs, the owner typically does not get the copyright and can’t collect royalties from the art. That usually remains with the artist. (It’s unclear whether this case was an exception.)

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Who is Beeple? People keep saying he drives a Toyota.

Beeple, or Mike Winkelmann, is a 39-year-old artist—with no gallery representation—and father of two from Charleston, South Carolina. And yes, he says he drives a “fucking Toyota Corolla piece of shit.” Before the pandemic, he was a graphic designer and animator, creating concert graphics for Justin Bieber and Shakira’s wall of fire at the Super Bowl halftime show.

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On May 1, 2007, inspired by the British artist Tom Judd, Winkelmann began drawing an image from start to finish every day. The digital, pixel images frequently lift figures and images from pop culture, and are all posted on his website. Donald Trump wearing pasties. Jeff Bezos as an octopus. A decapitated Buzz Lightyear. (Buzz Lightyear is a major Beeple motif.) Everydays is composed of 5,000 of these images.

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Once the pandemic hit, Winkelmann’s concert artwork had ground to a halt, so he dove into the world of NFTs. “People kept hitting me up, saying, ‘Oh, you should check out this NFT thing,’ ” he told the Art Newspaper. “And so finally, when I looked at it, in about mid-October, I was like, ‘What the hell, this is just crazy.’ From there, I just went apeshit trying to understand everything. I talked to collectors, I talked to the CEOs of these platforms, I talked to artists in the space—anybody that could help me wrap my head around what was going on.” Beeple’s first art “drop”—21 JPGs—happened in December. Within a weekend, his art grossed more than $3.5 million. This week’s Christie’s auction was Winkelmann’s first foray into the institutional art world.

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OK, remind me what NFTs are.

One of the images that makes up "EVERYDAYS: THE FIRST 5000 DAYS," in this case a smiley face emoji with its tongue out, but constructed as though it is an ancient monument.
A detail of one of the images that makes up “EVERYDAYS: THE FIRST 5000 DAYS.” Christie’s Images Ltd. 2021/Beeple

NFTs are a type of cryptocurrency in which each token is one of a kind and accrues value independently. This is different from a cryptocurrency like Bitcoin, since you could swap any one Bitcoin for another and end up with the same value on either side of the bargain. You also can’t divide an NFT into smaller pieces, as you can with Bitcoin. The nonfungible nature of NFTs makes them useful for selling art like Beeple’s collage. People have also used them to sell music, virtual objects in video games, and even tweets.

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And now Christie’s—like, the serious art world—is involved?

Yeah. Weird!

Who’s the buyer? I’m dying to know.

Christie’s has declined to name the winner, though Bloomberg is speculating that it’s Justin Sun, founder of the cryptocurrency platform Tron, because he bid the hammer price of $60.25 million. Sun is known for his extravagant spending, recently bidding $2 million for an NFT attached to Twitter CEO Jack Dorsey’s first tweet.

Weren’t you saying a week ago that NFTs might be a bubble? This seems pretty serious!

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There has certainly been a lot of hype around NFTs over the past few weeks. This is partly thanks to the prevailing surge in cryptocurrency prices in 2021 and to the sudden flurry of activity in NBA Top Shot, a virtual marketplace for trading basketball highlights that uses NFTs. (Yes, people pay hundreds of thousands of dollars to “own” highlights they can watch on YouTube.) Some investors have been concerned about the space given just how much money people are willing to pay for NFTs. “I do think there is somewhat of a bubble, to be quite honest,” Beeple recently told the Observer. “It’s something that I was actually fairly worried about for a while, and now I’m not worried about it at all.” In the interview, Beeple argued that a technology that confers ownership to people online will likely stick around in the long term, because there are so many potential uses for it, many of them undiscovered at this point. For what it’s worth, that case basically jibes with what Mark Cuban, one of the most visible promoters of NFTs, has been saying. The entrepreneur and Shark Tank judge told CNBC that the initial excitement has been inflating prices, which will settle down as more people become involved in the market. Still, he sees the technology itself as having staying power in the long term. And clearly, those prices haven’t settled down yet.

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Are a lot of artists doing this? How much money are they making?

Yes, there are many artists trying to get a piece of the NFT craze. NFT marketplaces like Rarible, OpenSea, and Nifty Gateway are seeing a huge boom in digital art. Nifty Gateway has sustained 50 percent month-over-month growth since March 2020, and Rarible has hosted about $5,668,986 worth of transactions over the past month. Overall, consumers have reportedly spent $174 million on NFTs since November 2017. Prominent artists and other celebrities have also been holding high-profile NFT auctions. The experimental pop artist Grimes made about $6 million during an auction last week featuring 10 pieces of art that featured flying babies and medieval landscapes. Lindsay Lohan also recently sold an NFT portrait for $58,947 and the creator of the legendary Nyan Cat GIF made $590,000 by auctioning off the feline meme.

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Is this … a good thing?

Digital artists have long struggled to make money from their work, since the art is often infinitely reproducible and it can be difficult to establish exactly who the creator is. In this sense, NFTs are a long-overdue way for these artists to more reliably earn money. In fact, many NFTs ensure that artists get a cut every time their work is bought and sold on the secondary market. At the same time, though, a person who attaches an NFT to a certain work doesn’t have to prove that they’re the original artist. There have reportedly been cases in which scammers steal another person’s art to sell as an NFT.

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The environmental impact of NFTs has also been a sticking point. As with most cryptocurrencies, creating and trading NFTs requires a huge amount of energy from computers, which in turn results in carbon pollution. This is partly because the Ethereum blockchain, which hosts most NFTs, uses a proof-of-work model that requires users to expend a lot of energy in order to mine and trade tokens in order to prevent frivolous actions. An audit of the NFT marketplace Nifty Gateway revealed 30 of the releases from its most popular artists in February resulted in more than 2,100 tons of carbon dioxide emissions. Beeple has pledged to address the issue, telling Gizmodo on Wednesday, “I can assure you that moving forward that all of my drops will not just be carbon neutral but carbon NEGATIVE. I will also be buying carbon credits for my past drops to not only completely offset those but also make them carbon negative as well.”

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OK, say I’m the winning bidder. How do I show off my Beeple piece? If I can’t hang it in my brandy cellar to wow my guests, I’m not sure what I just paid $69.3 million for.

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Wow, congrats on your brandy cellar. It’s true, an already-Instagrammed collage would not seem to merit such a price tag. Here’s the case Beeple makes: “The NFTs were designed in a way that makes them immediately distinguishable from Instagram and immediately distinguishable as a collectible,” he told Decrypt. With one of his earlier NFT auctions, hosted by Nifty Gateway, he mailed plastic, tangible frames to buyers that displayed the NFT on loop and featured a holographic QR code that revealed the NFT owner when scanned. Owners also get a unique link where they can register their token, post information about their storing of the piece, and begin to build an online community around their Beeple art collection. They also got a Beeple hair sample.

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Beeple has expressed his desire to work with the buyer of Everydays to brainstorm creative ways to exhibit the piece, whether that means displaying the work on a personal TV screen or on a building at the Art Basel art fair.  At any rate, Christie’s says that Beeple will deliver each piece directly to the buyer and that his “unforgeable signature” will be encrypted onto the NFT.

This might be a cosmic-brain question but: What if it’s a good investment?

Although only time will tell the investment’s worth, internet speculation is already buzzing. A finance reporter for Defiant News thinks that the $69 million price was a steal. “Christie’s auction was the first true intersection between digital ‘Internet’ art and the mainstream, high-end art world. This is now a historic piece of art, and it will only go up in value,” he tweeted. Others think that the art’s worth is more the precedent it set. One NFT investor wrote on Twitter, “It’s not gonna make the buyer rich and it’s not gonna make the buyer poor. But what this trade will do is serve as a benchmark for future CryptoPunks and the Hashmasks.” (CryptoPunks and Haskmasks are both successful crypto-art projects.) The co-founder of open-source blockchain network Tezos, Kathleen Breitman, told the Wall Street Journal that cryptocurrency-focused private equity firms are behind on the NFT rush but may buy in if recognizable names enter the field. So far, though, investments in Beeple’s art have a pretty good track record—an NFT a Miami collector bought for $66,000 in October sold for $6.6 million just a few months later.

This makes so little sense to me I’m concerned I might be in a dream right now?

Whew, same. But depending on how you feel about decapitated Buzz Lightyear, maybe more of a nightmare?

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.

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