Picasso’s Femme Nue Couchée Au Collier Indicates Changes Are Necessary for the NFT
Marketplace
The NFT boom
In March this year, Justin Sun, the 31-year-old Chinese founder of the Tron cryptocurrency platform, paid $20 million at auction for Picasso’s Femme Nue Couchée Au Collier. That same evening, he bought Warhol’s Three Self-Portraits for a further $2 million. So far, unremarkable — tech entrepreneur buys blue-chip art. Except that Sun has now announced that the two works will be among the first to be registered on blockchain via a new fund, JUST NFT, that he is setting up. This move by Sun amounts to a huge leap forward for NFT-based art, and it raises a host of fascinating and intractable issues.
NFTs, or non-fungible tokens, are a means of owning and exchanging virtual art. The artwork itself may be publicly available, but the Ethereum-based trading system provides buyers with a certification of ownership. It turns a virtual artwork into something that is just as much a personal possession as the Basquiat above the mantlepiece in a collector’s living room.
NFTs are booming and have been since Beeple’s NFT piece Everydays: The First 5000 Days sold for a record-smashing $69 million at Christie’s in New York earlier this year. That was the most spectacular moment so far in this new and disruptive marketplace, and it did more than any other event to make NFTs a popular investment option. (It now turns out that Justin Sun was the underbidder of the day.)
Investors and collectors acquired more than 60,000 NFT-based artworks from May to June this year. Their motivation is surely more than just financial. They are buying into the buzz as well because NFTs come with the added gratification of pioneering a new tech industry, developing one’s own identity through art, and supporting an upcoming generation of artists.
It is significant that NFT pieces are not just being bought but are also being re-sold. Yours Truly, a work by digital artist Bellini, was originally purchased for approximately $100,000 but is now on the market for $450,000. Bellini will receive a 5% royalty each time the work is re-sold. That, too, is something new. ‘It’s so amazing that even if it gets traded 10 or 20 times or more, I’ll still be getting my fee for it,’ says Bellini. ‘That’s totally not how the art world has worked until now.’ Secondary sales of NFTs have soared from 3,422 over the course of one month in April-May to 29,980 in May-June. Bellini and other artists in her position will certainly continue to reap the resale benefits.
An unregulated market
Meanwhile, with his newly acquired Picasso, Justin Sun has introduced one of the giants of twentieth-century art into this fast-growing digital eco-system. The ‘tokenization’ of Femme Nue Couchée Au Collier could turn NFT-based art into a stable luxury market. The legal framework, however, particularly around copyright law, has yet to catch up, and that could spell trouble further down the line.
Managers of the Picasso work who are based in France are evaluating the ramifications of Sun’s upload of the piece as an NFT because it may be that the Femme Nue’s digital existence is not technically legal. France’s stringent copyright law system is very different from China’s. There is likely to be a disconnect between the two systems regarding intellectual property rights and regarding violations of those rights.
It will take time to thrash out those thorny issues. In the interim, thousands of NFT-based artworks from undiscovered hopefuls will flood into an unregulated market. That will certainly dilute the quality of works for sale. It could even undermine NFTs as a feasible, long-term platform because the risk of purchasing illegally minted artwork might serve to deter buyers altogether.
A new copyright law
The fact is that NFT-based art can be acquired anywhere, instantly, with a click of a mouse. That immediate accessibility is what makes copyright regulation necessary. Now that Sun’s Picasso is on blockchain, global collectors could theoretically trade the work, or a share of it, dozens of times before the French government decides on the legality of its existence as an NFT. The tangled web of ownership could easily involve multiple jurisdictions and legal systems. There would be questions about who is liable for transactions — is it Sun alone or each individual collector who buys in?
This is not something that governments can decide in isolation. An internationally instituted regulatory system is required. A well-instituted body, appointed to oversee NFTs, would go some way to standardizing the approach to the ownership of digital assets in an ever-changing market.
Uncharted potential
All in all, there are many reasons to view present developments with optimism and excitement. Processes now under way could well give rise to an art space that thrives in parallel to the existing art realm. It is possible to foresee a symbiotic relationship that catalyses artistic growth in both the virtual and physical markets. Artists who typically use tangible materials could choose to collaborate with digital creators to make as-yet undreamed-of masterpieces. No bridge presently exists between the two worlds, but the foundations of a bridge were laid over the past pandemic year, as museums turned to online exhibits and virtual-reality experiences.
Times are changing. Creativity, technology, and commerce are working together to forge a revolution in the art world. In the end, that must surely be a very good thing.
