The Art of Making Money is the title you see in the airport bookstore. But, now a little Young British Artist, Damien Hirst, took it literally.
Art and NFT: Hirst’s latest art project, Currency, consists of 10,000 A4 sheets of handmade paper covered in very similar but not identical color spots. The reverse side of each painting is numbered and signed. By the artist with the title of the work, holograms are difficult to counterfeit.
Interestingly, Hirst turned this into an interesting experiment in the highly irrational economy of collectibles and blockchain technology. In fact, the buyer of each work paid $ 2,000 for the digital token alone. If they want real art, they must choose to redeem their tokens by July 21, 2022.
Damien Hirst melds art and NFT to mess with blockchain investors https://t.co/GOVl4q0112
— TNW (@thenextweb) September 1, 2021
If so, the token is destroyed. Suppose they choose to keep the token for themselves. The artwork will be destroyed. They cannot have both.
Second, the market is driven more by money than love. The 10,000 works are valued at $ 20 million. But in the last month, since the work was sold, over 1,800 works have been resold for nearly $ 40 million, now $ 120,000 for number 6272.
These secondary sales gave an idea of whether buyers would consider the artwork identical (or economically “fungible”). The name of the project, these works of art do not make very good money.
What can currency do?
Firstly, they are indivisible. Hirst’s writings have many of the properties of real money; they still lack essential properties to function as currency. In this sense, they are similar to the so-called “cryptocurrency”.
Even the two most famous, Bitcoin and Dogecoin, can hardly be used to buy anything. Thousands of lesser-known cryptocurrencies are even more useless to pay.
Currency market
Art and NFT – The artwork acts as an initial public offering. Aspiring buyers can sign up and say how much they want (but can’t list any personal work). The offer was exceeded as more than 30,000 people wanted more than 60,000 tokens (i.e., three times the demand in the second electronic market (operated by HENI, a processing company). Initial sales).
Secondary sales – There are currently about 500 works of art for sale. Recent sales were about $ 50,000, more than 20 times the original selling price. For example, “Yes,” the $ 120,000 Hand Distribution, is one of the few works with a one-word title.
Art and NFT: Collectible value
Hirst’s experiment has exposed the uncanny economics of valuing collectibles. In economics, the standard pricing method “discounts” future value. Thus, the hand is worth more than one in the bushes.
But the artwork is similar, and the collectibles are different. While some buy for love, speculators buy with money on the assumption that their value will be higher in the future. The reason is mainly in the “dumbest theory“.
The buyer, in turn, must expect someone else to pay more, etc. So far, Hirst’s experiments have shown this. This often leads to a speculative bubble that often ends in tears. Prices may fall.
As Isaac Newton regretted after losing £ 20,000 in the South Seas Bubble in 1720. Coincidentally, Hirst’s work is currently selling for the same price as Bitcoin. The pictures are at least beautiful. And there is the option to at least change the NFT to a physical form that the owner can keep surname.
Image courtesy of HENI/YouTube