Damien Hurst is a famous British artist. He has been accused of backdating works of art that were used in an NFT project. We discuss the accusations and how NFT art could fare in the current cryptocurrency rally.
In 2016, artist Damien Hirst set about creating a series of oil paintings on paper. Numbered at around 10,000 works, they were for a larger project named The Currency. Their eventual aim was to be transformed into non-fungible tokens, a form of digital collectible artwork. The physical pieces were marked with a microdot to verify their authenticity. They also had a date, title, and signature written on the back in pencil, presumably by Hirst himself.
According to the Guardian newspaper, many of these have not been created by Hirst at all. They state that he has made them on a production line at his studios in Gloucestershire and London. The authorized dealers for the works, Hirst and Heni, have also claimed they were created by hand in 2016, though they were actually made much later. It is believed that around 1000 of the pictures were not made by Hirst at all.
The Currency was a project designed to explore the relationship between art and currency. Once the pictures were created, they were transformed into an NFT. Buyers could purchase these for $2000 each. They then had the option to keep the NFT version of the artwork or trade it for the physical one. It is estimated that it created around £18 million in value for Hirst’s company, Science Ltd.
The crypto market recently had its biggest rally in a long time. At the time of writing, Bitcoin almost hit the record 82k mark, peaking at $81,888. The key indicators for its momentum signal that this growth is going to continue, with some predicting it could hit $100,000 by the end of the year. There have also been strong inflows towards Bitcoin ETFs. Many collectors of NFTs and digital art are wondering if the NFT art market will do the same.
An NFT is a non-fungible token. This means they cannot be cloned or copied. They represent digital ownership or an item of an asset. In the case of this story, it is artwork. However, they can also be used for music, photography, collectibles, and even for real-world applications like real estate contracts.
When you want to buy an NFT, you have to go onto a specialized marketplace. You can then purchase them using the major cryptocurrencies, like Bitcoin and Ethereum. It is then transferred to your wallet, where you can keep it or choose to sell it on at a later date. The sale of NFTs hit a high in 2021, when the market was valued at around $2.9 billion. Since then, they have been in decline almost 50% year on year.
There are some positive signs, the main one being that a lot of regulatory concerns regarding cryptocurrencies have been resolved. These include upcoming changes in Europe, along with ones in Hong Kong and the US. Traditionally, NFT art has been sold through dedicated online marketplaces, with traditional auction houses, barring the odd few, sticking to their own art. However, as regulatory changes occur in financial institutions, we may see the same thing in art dealerships. Traditional art traders may begin to act on NFT sales. While sales remain down for this year, the rally has only just occurred, and it could be well into 2025 before the impact is really felt.
The question of authenticity is muddied somewhat, as there is no definitive answer to when an item should be dated relative to its time of production. Most pieces of work are dated upon completion, though occasionally they can be dated to when started or even midway through the process. It is also not unusual for Hirst to date items from the date he started them. For example, many of his famous formaldehyde artworks were dated to the 1990s but not completed until 2017.
One mark of authenticity is that Hirst is carrying out his pledge to provide only a physical picture, or NFT. Anyone who chose to have the physical printing soon found it removed from their digital wallets, with all links going dead. To date, around 100 have been resold at auctions, with prices going as high as $28,000 for some.
The future of NFTs looks set for a rally. The hype surrounding them has died down since 2021, and now it seems like they are being integrated into the traditional method of art sales, just as financial institutions are accepting wider cryptocurrencies. However, art has one thing that finance does have on its side: It is subjective. Simply being an NFT is not a golden ticket to success. Quality, high-end artwork will be the factor that determines how the market survives.
Anna Melnykova, "Palace of Labor (palats praci), architector I. Pretro, 1916", shot with analog Canon camera, 35 mm Fuji film in March 2022.
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