LET'S CALL NFT 'THE FATHER OF NEO ART' ('TFN') AND CRYPTO CURRENCY AS ITS VALUATION MEDIUM
By Johan Ishak
5 February 2022
NEO ART is a new term that I have decided to use to mark an era of a new art development phase. For so many years since the 90's the art landscape has been talking about Contemporary Art, for which, it marks an era of the latest modern art, giving an end, or a partial end to its predecessors namely Modern Art, Pop Art, Naive Art, Surrealism Art, Neo-Expressionism Art, Expressionism Art, Impressionism Art, Realism Art, Classical Art and many other subsets of them.
In various talks in events such as Venice Biennale, Documenta, Art Dubai, Art Basel and their contemporaries, art practitioners as well as enthusiasts of the art world ask the question, "What is after Contemporary Art?" Their lack of ability to answer this question had led to the Contemporary Art era to survive until today. Whilst Contemporary Art continue to progress, the earlier genres remain to be practiced by many others (still) simply because the introduction of a new art movement cannot be accepted or comprehended by purists of each era or genres. Today, we have Non-Fungible Token (NFT) - a new art development that may just be the answer to the question, "What is after Contemporary Art?"
I would like to call this new era (of art) 'Neo Art' that simply means New Art. What can be more pervasive and profound than the word 'Contemporary' if not 'Neo' (New). Many would disagree with me on this subject as they would still classify NFT as Contemporary Art. For them the word Neo or New is the same as Contemporary. Well, they said the same thing about Contemporary Art when it was first coined as an industry jargon. They used to say that Contemporary Art has the same meaning as Modern Art. History showed that for the need to mark a particular era, a name should be adopted. As a result, Contemporary Art became the identification of the new art movement to mark the post-Modern Art era.
So, I shall now mark this era as Neo Art era to mark the post-Contemporary Art era; and NFT is the beginning of it all. When a new movement is initiated, there would be advocates and oppositions. This is because time is the essence before society can accept (Neo Art). People need to understand what it all means. For Contemporary Art, it was simple - it is an art movement that is embedded with freedom whereby artists do not have to be restricted to certain rules of artistic methods like its predecessors such as Expressionism. For Neo Art, it is not that simple because it is intertwined with the ridiculous development of blockchains.
To understand what Neo Art is, one needs to understand NFT. To understand NFT, one needs to understand blockchains. If a physical oil painting is an original piece and its duplicate of image printed on canvas is the copy, then for digital art, NFT provides a method of authenticity giving a particular digital art its 'original' status like an oil painting. An oil painting can be easily marked as an original versus its print on canvas versions because you can feel, touch and view the texture of the brush strokes of the oil paint. For digital art, that is impossible. Therefore, a confirmation method is required to mark a digital art piece as the original. NFT technology is that confirmation method.
Why is NFT a confirmation method? Well, a straight answer would be that the NFT is a digital art piece that is embedded with a blockchain. A blockchain goes through a process of confirmation by multiple sources to declare that a particular blockchain is unique. Once a blockchain is declared unique, only then a value can be attached. In the case of NFT, that value is the authenticity of the piece to be called an original. Blockchains as confirmation tool was first used to provide that unique character to monetary currencies of the crypto world such as Bitcoin, Ethereum, USD Token, BNB and many more. The question here is, "Why would we accept a confirmation process to have the authority to declare values?"
The economic model of the human civilisation has evolved many times and without us realising it, this method of confirmation has been there since time in memorial. To provide a thorough comprehension, we shall use the word 'Promise' instead of 'Confirmation'. A confirmation is simply a promise that something is indeed something. I know it sounds silly but let us digress further into history.
In the beginning there was barter trade. I have one cow and you have twenty chickens. If we agree to swap, then we agree that a cow is worth twenty chickens or a chicken is worth one twentieth of a cow. The demand and supply mechanism has led to the acceptance of certain numbers of each stock to be the measured value for a transaction to take place as long as there is offer, acceptance and consideration. Just like the classical legal case, Carlisle vs Carbolic Smokeball when we learned Contract Law 101 in universities. This in itself is a promise (of values to be accepted).
Then that method evolved further. We did not want to carry twenty chickens or drag our slow moving cow to the market. Instead, we decided to use a currency in the form of precious metals whether it is gold, silver sterling or bronze. Why did we believe that a bag of gold is enough to purchase a cow? Maybe because the market has evolved to accept that if you have a bag of gold, it is promised that someone will be able to give you a cow in exchange.
Then it evolved further. We feel that it is too heavy to carry bags of gold. So we decided to deposit the gold at a bank. The bank then issues a letter, a promissory note, that promises that the bearer of the letter shall be entitled to take certain bags of gold from the bank. Since we are comforted by that promise, forget the gold, let us just travel around the market carrying pages of promissory notes. That promissory note evolved to the cash we have in our wallet today except that, instead of a promise that the bank will give us certain quantity of gold, that promise is now taken by the Reserve Banks and/or the Government that the bills shall carry the said values even without any gold reserves.
This is why the United States of America can print as much money as they want as the Government continues to give that promise. Most countries in this world have evolved to not use gold reserves to substantiate the value that a currency bill carries. They either benchmark it to US Dollars or a promise from a Reserve Bank and/or the Government. Now, imagine that promissory concept, but abolish the physical currency bills - What do we have? We have money in a form of electronic transactions - ie. the use of debit cards, credit cards, e-wallets and many more. In the end, we have moved away from physical matter to electronic, which is, virtual matter.
Despite that evolution, one character remains, that is, a promise. Take that promise that is fuelled by the blockchain method and assign it to a digital art. That digital art embedded with that promise is an NFT, an art that carries with it intrinsic value of a promise of a value as well as the monetary value of what measurement the market shall accept for it to be traded. In the end, no matter how complicated things are, we will always fall back on the neo-classical economic school of thought by Adam Smith - the demand and supply mechanism.
So, as you can see, if humanity had accepted the many evolution stages of monetary currency, why are we so scared to apply the same concept on NFTs? The answer is the stability of the underlying new method used, i.e. the crypto currencies. To understand this, we shall need to understand the history of second hand markets. A particular item can be re-traded in the market. We may have owned a cow for ten years but there may be a time when we would sell it to get twenty chickens. Post-World War 2, the army apparels were sold in Army Disposals stores. The Jews invented many second hand markets for many items. It was well accepted by society.
We need currencies to buy stuff, but yet we trade those currencies in foreign currency exchanges making profits not from the primary purpose of the currency (to buy goods) but from the supply and demand of the currencies. We buy shares in various companies on the back of a primary believe that the company is in good businesses and that handsome dividends shall be paid, but yet, we trade our shares in the bourse making profits out of pure speculation of the share prices instead of the fundmentals of the underlying businesses. The same with derivatives such as options, futures, forwards and swaps where instead of its primary purpose of hedging, we trade those derivatives in various derivative exchanges.
Now, those examples given earlier has one thing in common, they all have/had a stable primary purpose that privides a strong fundamental for the secondary purpose to be manifested. However, for crypto currencies, many economies have yet to establish its primary purpose. Once I noticed people buying cigarettes from a strore in Tokyo using Bitcoins. That is a good example of a primary purpose. However, what else can you buy by using Bitcoins? Can we some day, buy a house? Or a car? (Using Bitcoins). This primary purpose needs to be strengthened in order for the market to have confidence over the promise that crypto currencies can deliver.
What we see in many economies today is that, even when the primary purpose has not been properly established, people are already jumping into exchanges for crypto currencies trying to make money from pure speculation of the fluctuations of the values of crypto currencies relative to the fiat currencies. This is where the second hand market has evolved faster than the primary market - hence providing the lack of confidence, or lack of promise, or lack of confirmation.
Going back to the NFTs, the crypto currencies used for the NFT trading must first earn that trust from the society. This trust can be earned from various initiatives to enhance the primary purpose of the crypto currencies. Governments and Reserve Banks need to step in to take affirmative actions to ensure that the same promise that has evolved from the barter trading method to the currencny electronic e-wallets are carried through of a proper supply and demand substantiation on the back of accepted promise and/or confirmations.
There are many other components of the NFT ecosystem that need development and market acceptance. The exchanges (also referred to as the Network) where crypto currencies are traded need to support the crypto currencies that are used on NFT platforms. The NFT platforms as well as the exchanges need to support the crypto wallets for it and vice versa. The crypto wallets need to be supported by the conventional banks so that crypto currencies can be converted into fiat currencies such as US Dollars. The Reserve Banks and relevant authorities need to support all of these components. Finally the law makers, i.e. the Government and the Parliament, needs to support the whole entire ecosystem.
What we see in some economies today is that, the Government and the authorities are slow in their evolution to support the progression of crypto currencies. Hence, it has an unfavourable impact to the development of the NFT movement. When all of these issues are sorted, then behold the next era for art, the Neo Art era, giving an end to the term Contemporary Art. As you can see, art cannot just be a creative output. It needs to have its economic substance to also grow together. We cannot just use the right brain. Our left brain must function equally.
Pulling back this whole debacle into an art subject, let us illustrate the real life pragmatism of NFT. For a conventional art piece, say a painting by Salvador Dali, one would be proud to boast his or her ownership of the art piece by hanging it on the wall for friends to see. For NFT, how is this possible? Well, the boasting element comes from the narcissistic nature of the current social media society. By simply saying, "I owe an NFT done by Jisoo of Blackpink", it will suffice. Show the digital art on your phone to your friends and you shall get that satisfaction. Perhaps one day, when we are all living in a virtual world, like those showed in the movie, The Matrix, or the TV series, Black Mirror, we can boast about NFT like how we boast about Salvador Dali's piece.
Contemporary artists once benefited from being labeled as non-conventional relative to their predecessors such as Impressionism artists or Expressionism artists. Today, Contemporary artist may be recategorised as conventional artists instead depending on how well Neo artists blossom on the back of the hope that NFTs can become a phenomenon, if it has not yet become one, and the continuous spread of this new economic model structured based on crypto currencies. When this happens, artists of all walks of life will be compelled to comprehend this new era or face the risk of obsolescence.
What can be preserved by Contemporary artists in the Neo Art era is the purist approach of unique art movement. NFT is wrongly (or rightfully, to some people) growing on a 'lazy' concept of just using one shape but reproduced into many versions of different themes or colour codings. It is as if artists have lost their ability to think creatively. It is as if artists have re-introduced the idea of restrictions unlike what Contemporary artists were fighting against.
So, perhaps it is healthy for Contemporary artists to stay firm with the idea of unique art and apply it in NFT providing an alternative Neo Art to that offered by their lazy and younger counterparts of the Neo Art generation. In fact, the other genres such as Expressionism and Impressionsim can also make a come back but in a new breath altogether, hence justifying their inclusion as Neo Art. In the end, society needs to support artists by giving them the recognition to their role in society as the shapers of culture and human civilisation. In return, artists must also move with the dynamic and ever changing trends and technology beyond art itself.
Perhaps one day NFTs can expand its relevance well beyond art were the confirmation process of blockchains can play a role - for example: passports, exclusive concert tickets, vaccination certificates, land titles, drivers license, universities' certificate of education, security access cards and many more. In any case, we shall see where this NFT shall ned up. For now let us end this discussion with the conviction that we shall together provide that promise and that confirmation we talked about earlier to the extent that we can promote the essence of the title of this article - LET'S CALL NFT 'THE FATHER OF NEO ART' AND CRYPTO CURRENCY AS ITS VALUATION MEDIUM
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