NFTs: Considering the Issues and Ethics
Part Three: NFTs in 120 Minutes Series
Bernadine Bröcker Wieder moderated a panel with
Aleksandra Artamonovskaja Co-founder of Electric Artefacts, Christine Bourron Founder and CEO of Pi-eX
and Cynthia Gayton Owner of Gayton Law.
Aleksandra is the co-founder of the digital art gallery and agency Electric Artefacts. She curates NFTs for sales and helps artists and curators on how to manage this. Christine is the founder and CEO of Pi‐eX, a London based broker‐dealer. She has spent the last 15 years analysing the trends of the evening auction sales at the three largest auction houses. Cynthia M. Gayton, Esq. is the owner of Gayton Law which concentrates on small business formation, intellectual property, information technology, and business transactions/contracts. She runs through the ethical and technological issues of NFTs with artists.
In the final part of this series, this panel discussion will address the copyright, licensing, liabilities and carbon footprint of NFTs. The panel begins by introducing themselves and their area of expertise.
Cynthia begins the discussion stating that it is necessary to understand and read the terms and conditions of a contract whether you are the buyer, artist or platform. There is a reliance on platforms to enforce smart contracts but artists and collectors need to know what is going on to feel comfortable and be protected. There needs to be an understanding so there is confidence in the purchase and in the industry.
Christina started the first online gallery in New York in 1997. She rode the internet wave and gave power to the artist because they could platform and claim their work as their own. There was initial hesitation to join this website platform until Christina explained that officially publishing their work was better than someone coming in, photographing the work and claiming the creative concept as their own.
It was only in Spring 2021 that auction houses began participating with NFTs. It began with Christie’s “Beeple” Auction in March 2021 followed by Sotherby’s “The Fungible Collection” and Phillips “Mad Dog Johns” Auction in April. Christine described the different approach of each auction house and notes how much the value of the crypto currency influences the value of the NFTs.
Christies sold 1 NFT for $69.4 million with 353 bids which was extraordinary particularly post pandemic.
Sotherby’s had three auctions - classic, creative then marketing actions. Overall, they sold 6,266 NFTs worth $16.8 million
Phillips had 1 NFT that will multiply itself. There was 62 bids which came to $4.1 million
Aleksandra launched Electric Artefacts which began as an online gallery that sold video works and prints of digital images. With the growth of NFTs, it became one of the first galleries to start integrating curating NFTs. With the curation, Aleksandra works with platforms like Etherium and Tezos, publish educational materials, provide independent platforms for exhibiting art and keeps an eye on new technologies and how they can be integrated for the different art market players.
Main blockchains are Etherium and Tezos which Aleksandra recommends as a good entry point. Electric Artefacts also have a great guide on buying NFTs.
What are you buying when you buy an NFT?
Cynthia first establishes there are similarities for when you buy a physical piece of art. With physical work, “you don’t have copyright or license to make posters of the work…you have the right to exhibit it.” Individuals are misled in the belief that with digital work you can do whatever you want. Generally, the copyright remains with the artist and the purchaser buys the licence to use the work. There are adjustments and you can work with the artist to modify this, particularly Cynthia points out if you are spending £1 million on an NFT, “I would want more rights than the default terms and conditions.”
Are digital artists worried about copyright and “right clicking” and downloading their images?
Aleksandra says “every artist will have their own opinion depending on what they are selling.” She expands explaining some would love their work to be accessible to “right click and save” as the “virility and exposure of the work only adds value… It is about seeing an NFT as the certificate of authenticity and [that] the work belongs to you.” With some other artists, there is unlockable content that you can add to the description when you are selling. Once you make a sell, you can send the contract to the buyer if you are offering more so “there is a level of conversation you can have after the purchase, it does not need to all be online.”
Do platforms need to improve how they monitor fakes and NFT theft? Where does the responsibility lie?
Aleksandra agrees there are flaws, and suggests “independent players should not be the custodians, the platform primarily holds the responsibility for its clients.” This is one of their top priorities but she also notes that there is a strong community of reporting fake accounts. You can often tell if it is not original when it is not linked to twitter or if an original collection does not quickly sell out. Bernadine notes you “can send [a fake] to a wallet that is unclaimed so that no one can ever buy it again. And that is a way the system can correct itself as you can burn a fake work.” But, Bernadine adds the platform does not take responsibility for that money.”
Christine highlights that this unregulation is a problem as “the platform has no responsibility for the provenance that they are selling” and Cynthia recommends that you make sure you know what you agree to when on these platforms. Some platforms will on a case by case basis remove and/or refund the fake to protect their own reputation. The “highly curated platforms that check this carefully, while they might not have a huge selection, at least you know they are paying attention.”Cynthia recommends artists to keep track of their own work and make the hash that relates to their works available to people so they can check against the artist. “NFTs might not be around in a couple of years and you don’t want to be caught up in something that diminishes your reputation”. Cynthia adds that you should take advantage of the personal relationship that can be built between artist and collector.
Will there be an integration between the physical and digital work spaces?
Yes, Aleksandra says some galleries are exhibiting video art and NFTs on video screens inside the gallery. Exploring AR technology is another option which will be a hybrid and mixed reality experience. Christine also supports this and says some auction houses will sell crypto park in their regular evening live sale. The NFT is online but it enters the “real world.”
What are the merits of collecting NFTs and what it would bring to a collector of traditional art?
Cynthia introduces hardware which is how the art is displayed as an answer to this question. People can use their own frames and display things physically.
Aleksandra continues, digital art has been around since the 50s, “I see collectors who are buying NFTs enjoying it as much in virtual and physical spaces, maybe it is a different generation or tech enthusiasts who find it fascinating. We saw some people using their projectors on the walls and it is a mesmerising experience… you can immerse [yourself] in the work”
Bernadine also brings in the importance of supporting the artist. They might not have been financially supported previously, and now they have “liquidity and time to dedicate to their art.”
Cynthia also suggests considering the token which has capacity to do many things. “The utilisation of the token technology can create a whole new experience.”
Is it becoming less accessible because certain countries won’t be able to access these things?
Aleksandra agrees there is the problem of technology as “it is democratising but the accessibility is low.” It is the same with physical work as many people can not travel to see exclusive exhibitions but with the help of technology they are able to. “The responsibility we are taking is producing more material to be able to educate more people and give people access.” Places like in India cryptocurrency has its restrictions yet it still has an incredible amount of innovation. This is “the beauty of this technology as it can still be accessed for those that are willing.”
Cynthia encourages us to learn who you can trust and find people who have the knowledge and are willing to talk to you about it. There is still opportunity to participate but it will take time and energy.