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How 2 friends made art history buying a $70M digital work
Creators making millions with ‘non-fungible tokens’
NonFungible.com founder Dan Kelly and Ledger chief experience officer Ian Rogers explain the technology behind the new asset class of ‘non-fungible tokens.’
It took a few minutes for Vignesh Sundaresan and Anand Venkateswaran to realize that they’d parted with $69.3 million for a digital artwork stored in a JPEG file, coincidentally securing their place in art history.
“We weren’t sure we won,” said Venkateswaran, describing the nerve-wracking final moments of the online auction for a collage of 5,000 images by the artist known as Beeple. “We kept refreshing the page.”
The March 11 auction at Christie’s in London immediately made Beeple’s artwork one of the most expensive pieces ever sold by living artists, joining a well-known swimming pool painting by David Hockney and an iconic stainless steel rabbit sculpture by Jeff Koons.
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Venkateswaran said he and his friend and business partner, Sundaresan, both in their 30s, are still coming to terms with their landmark purchase. They’ve also had to cope with outside concerns that the transaction could have been a convoluted scheme to inflate the value of the pair’s investment portfolio.
That’s because Venkateswaran and Sundaresan have invested heavily in a new form of digital collectible with the unwieldy name of non-fungible tokens, or NFTs. Based on cryptocurrency technology known as the blockchain, these digital items function as exclusive certificates of authenticity, making it possible to turn easily copied digital files into unique collectibles — sometimes ones worth tens of millions of dollars.
The Beeple sale broke a record for the most expensive NFT ever sold and kick-started a global conversation about NFTs, their value and whether they are a lasting addition to the digital landscape. But the eye-popping sum involved drew global headlines and some suspicions that it could have been engineered for the publicity that drew more attention to NFTs, which could boost the value of the pair’s existing holdings.
CREATORS MAKING MILLIONS WITH 'NON-FUNGIBLE TOKENS'
The involvement of Christie’s, a centuries-old auction house, should be sufficient to reassure skeptics, Venkateswaran said in a call from his home in southern India. “I think the bigger problem here is that people thought this would be impossible.”
That’s certainly the case with Beeple himself, who in real life is a digital artist named Mike Winkelmann. “This whole NFT thing was not something I saw coming, at all,” he said. During the auction, the artist was in his living room near Charleston, South Carolina, surrounded by family and a video crew, and said it felt like a “bomb went off in the room” as the bids quickly rose. Another bidder and cryptocurrency entrepreneur, Justin Sun, lost in the final seconds after the bids exceeded his previously set maximum.
The NFT market was already taking off, with transactions last year quadrupling to $250 million, according to a report by NonFungible.com, a website that tracks the market. The Beeple sale turbocharged that growth and helped transform NFTs from niche tokens mainly appealing to cryptocurrency nerds to a new type of digital asset that’s drawn mainstream attention from the art world, the music industry, sports and speculators.
Not to be outdone, auction house rival Sotheby’s plans its own NFT sale, collaborating with the pseudonymous digital artist Pak in a sale next month.
Winkelmann began seeing the possibilities of NFTs for digital artists back in October when he tested the waters with an initial “drop” of his work. “People can actually own my art and collect it and, you know, pay good money,” he said in an interview this week.
It was after another sale late last year that he reached out to one of the losing bidders, Sundaresan, who uses the pseudonym Metakovan.
The art world was not a common talking point for Sundaresan and Venkateswaran when they first met in 2013 while working at The Hindu, a daily newspaper in Chennai, India. Sundaresan was a 20-something technology consultant; Venkateswaran was a journalist.
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