From 'Quantum' to Beeple: How Tokenisation is Shaping Digital Art
Last updated
Last updated
of our deep dive into digital art, we explored its evolution—from early digital works to the rise of platforms that gave artists tools to create and distribute their work online. Now, in Part 2, we examine the emergence of Non-Fungible Tokens (NFTs), the technology that has become a game-changer for digital artists, offering new ways to monetize their art, guarantee ownership, and engage with collectors. NFTs have reshaped not only how digital art is sold and owned but also how it is valued, creating unprecedented opportunities and challenges for artists and the art market alike.
The concept of an NFT first appeared in 2014 when digital artist Kevin McCoy created "Quantum," widely considered the first-ever NFT. Quantum was a pixelated, abstract work of art, and McCoy minted it on the Namecoin blockchain. His goal was simple but revolutionary: to use blockchain technology to establish verifiable ownership of a digital asset, ensuring that the original version of his artwork could be owned and traded like a physical painting. While this early experiment didn’t immediately catch on, it laid the groundwork for what would become the NFT ecosystem we know today.
The foundations for NFTs can also be traced back to the work of Stuart Haber and Scott Stornetta in the early 1990s. They pioneered the use of blockchain to create secure, timestamped records for digital documents, an innovation that formed the basis for verifiable digital ownership. Their vision of immutable digital records was instrumental in the eventual development of NFTs.
In 2017, NFTs gained traction with the creation of CryptoPunks and CryptoKitties. CryptoPunks, a series of 10,000 unique, algorithmically generated characters, became a cultural phenomenon, illustrating the potential for NFTs to create scarcity and exclusivity in digital assets. Around the same time, CryptoKitties, a blockchain-based game that allowed users to collect, breed, and trade virtual cats, further showcased the potential of NFTs, with some rare cats selling for tens of thousands of dollars. These projects not only demonstrated the commercial potential of NFTs but also contributed to a new cultural movement that valued digital scarcity.
At the heart of NFTs is blockchain technology, particularly Ethereum's ERC-721 standard, which introduced the concept of a unique, indivisible token. Cryptocurrencies like Bitcoin or Ethereum are fungible—each unit is identical and can be exchanged 1:1—but NFTs are non-fungible, meaning each token is unique and carries specific metadata that distinguishes it from every other token. This concept of uniqueness and verifiable ownership was crucial for digital artists, who previously struggled with the issue of their work being copied endlessly online without control over distribution or royalties.
The smart contract functionality of Ethereum allowed NFTs to embed royalty payments directly into the token. This means artists can automatically receive a percentage of the sale price every time their NFT is resold. This feature was revolutionary for the art world, allowing artists to continue profiting from their work as it appreciates in value, similar to how physical artists benefit from the secondary market.
The rise of NFTs saw more digital artists flocking to platforms like SuperRare, Foundation, Nifty Gateway, and OpenSea, which offered marketplaces to mint and sell NFTs. This shift was driven by key factors:
Scarcity and Exclusivity: NFTs allowed digital artists to sell their work as a unique, scarce asset, creating value in a market where digital goods had often been seen as endlessly replicable.
Royalties and Control: Embedded royalties gave artists ongoing control and profit, addressing major pain points in the digital art space.
Access to Global Markets: NFTs democratized access to a global audience, allowing artists to sell directly to collectors without needing galleries or curators.
One of the pivotal moments during this early phase was when digital artist Beeple (Mike Winkelmann) sold "Everydays: The First 5000 Days" at Christie’s for $69.3 million in March 2021. Beeple's work, a collage of digital images he created daily over 13 years, became a symbol of the NFT craze. It marked the first time a major auction house sold a purely digital artwork as an NFT, legitimizing NFTs in the eyes of traditional art institutions and proving that digital art could command significant value.
By mid-2021, NFTs had reached fever pitch. OpenSea, one of the largest NFT marketplaces, recorded over $3.4 billion in trading volume in August 2021 alone. Celebrities, musicians, and brands entered the space, fueling the hype. High-profile drops from artists like Pak, whose "Merge" project generated over $91 million in sales, along with contributions from Snoop Dogg, Grimes, and other cultural icons, created a media frenzy.
However, this explosive growth came with downsides. The speculative nature of the market led to inflated prices, with some NFTs being bought and resold at exaggerated values. This speculative bubble burst in 2022, leading to a significant market correction. Many projects launched during the boom lost value, and some collectors found themselves holding tokens worth only a fraction of their original purchase price. While painful for many, this correction helped refocus the market on long-term value and sustainability, rather than quick speculation.
Despite the correction, the fundamental value proposition of NFTs remains intact. Artists, collectors, and platforms have shifted focus to long-term utility rather than speculation. As the market matures, there is now greater emphasis on creating sustainable ecosystems where NFTs offer more than just collectible value—serving as keys to exclusive experiences, memberships, and communities.
Traditional art institutions like Christie’s, Sotheby’s, and even MOMA continue experimenting with NFT auctions, signaling that digital art's integration into the broader art world is here to stay. Platforms are also improving the user experience, making it easier for non-technical users to participate in the NFT ecosystem.
Blockchain technology has evolved too. Ethereum’s transition to Proof-of-Stake in 2022 significantly reduced environmental concerns, making NFTs more sustainable. Layer-2 solutions and alternative blockchains like Tezos and Flow also offer cheaper and more environmentally friendly ways to mint and trade NFTs.
The emergence of NFTs has opened up unprecedented opportunities for digital artists, reshaping how art is created, owned, and valued. From the early days of "Quantum" to the record-breaking sale of Beeple’s "Everydays," NFTs represent a fundamental shift in digital ownership and creative empowerment. While the hype cycle of 2021-2022 may have cooled, the long-term potential of NFTs remains strong. As artists and platforms focus on building sustainable, value-driven ecosystems, we are witnessing the dawn of a new era for digital art.
Are you ready to be part of this transformation? Stay tuned as we continue to explore the tokenization of everything and its impact on the creative industries and beyond in the next part of our series.