Founded in London in 1766, art auction house Christie’s is a symbol of yesteryear—and yet the company appears to be on the cutting edge. In March, Christie’s sold a collage by the digital artist Mike Winklemann, better known as Beeple, for 42,329 Ether, at the time the cryptocurrency equivalent of $69.3 million.
The artwork was sold as a nonfungible token (NFT), a sort of certificate of authenticity minted on the ethereum blockchain.
The sale was part of a larger boom market for NFTs that peaked in February and March, which has somewhat subsided since. But Christie’s remains long on NFTs. The auction house has this year sold a series of Andy Warhol NFTs for a combined $3.3 million, a digital version of Banksy’s street art for $100,000, and a collection from the 18-year-old digital artist FEWOCiOUS for a combined $2.2 million. In short, Christie’s is embracing an emerging market, as is its counterpart Sotheby’s. So Quartz caught up with Noah Davis, Christie’s NFT lead to see where things are headed.
This interview has been edited for length and clarity.
Quartz: What’s the state of the NFT art market today?
Davis: It is still in very rude health. The market experienced a correction that aligned with that of the crypto market, but that was a necessary and welcome change. We’re still seeing way too much rushing to market, but the prices being paid for great work are still really impressive.
Most recently, we sold FEWOCiOUS, who is a darling of this space and definitely a hero to many in crypto and the NFT community. We saw his sale perform extremely strongly, especially considering Fewo is 18 years old, this is his first outing with a major auction house, and just a year ago his works were trading for $100 or less.
I think that we are still just breaking things and figuring it out as we move forward, which has always been the ethos of people in tech.
That’s not usually the ethos of the art world.
No, this is a weird Venn diagram. NFTs exist in the overlap between tech and art. NFTs are really just decentralized applications that are running on a blockchain. But it’s particularly well suited to representing digital art because it is more of a concept than it is a physical object. This is a way to give objecthood to ideas or ephemeral commodities.
What does that mean, to “give objecthood to an idea” or to something as ephemeral as digital art? Who needs to buy in?
I like the way that [Yuval] Noah Harari, the philosopher, talks about money in [his book] Sapiens. There’s a whole chapter devoted to money and he describes money as the most successful shared fiction in a long history of human-made shared fiction. A five-dollar bill is only worth five dollars because of consensus. There’s nothing that intrinsically makes a five-dollar bill valuable or less valuable than a one-hundred-dollar bill beyond the collective agreement that it is.
Nonfungible tokens make the not collectible inherently collectible. That’s the way we’re using it as a utility in the art world right now. It’s a really dynamic technology and I can’t wait personally to see it completely absorbed into the way we do business in the art world.
When did you and Christie’s start paying attention to NFTs?
I came to art out of interest in absurd theater. That was my study in college. I focused on postwar French theater, particularly the absurdist strain, which is funnily enough a great preparation for working in the art world. There’s something ritualistic and performative about art at auction and something also inherently absurd about the entire art industry. And definitely for NFTs too. I have been running the online sales for the contemporary art department in New York City at Christie’s for about four years now. And in that capacity, I was the obvious person to evaluate the Beeple NFT because it translates well in an online-only venue.
I became aware of blockchain more generally speaking in 2018, when Christie’s sold the Barney Ebsworth collection. We did some work with [art-focused blockchain company] Artory back then to record the sales and all the information on the blockchain.
But it wasn’t until Beeple sold his first suite of super valuable assets at Nifty Gateway in December that NFTs popped up on my radar. I was in the office in early 2021 when the opportunity came across my desk and I ran with it. And lo and behold, I could not have told you how radically different my life was going to be after that sale.
Why did you think this was something anyone would want to buy, and that Christie’s should sell?
I thought it was just fun and different and weird and interesting. And it was the end of a very, very terrifying chapter in human history. When everything shut down, when life just came to a standstill for the entire world, our lived experience was necessarily really cut down to size. Lived experience no longer had this sort of primacy over virtual experience. People needed to find some way to replace that part of their lives that was now completely inaccessible or at least unsafe.
With what happened with GameStop and that sort of activist investor approach to the stock market, I also see a parallel to what happened with Beeple. It’s a group of crypto-native people who believe in the technology, And they all banded together to support this moment in time where everyone was ready for something to shake everything up.
Christie’s, by the same token—pardon that terrible pun—we were also ready to take risks. Our appetite for risk-taking was worth more than it usually is, just by nature of needing to keep the lights on and needing to be ambitious to try new things. And it helped that we had this $6 million result to reference that recently took place at Nifty Gateway.
With GameStop, there’s a narrative of activist investors taking on Wall Street through collective action. What’s the analog here?
Beeple is GameStop. Beeple is the artist that’s not supposed to succeed. He is now the third most expensive living artist at auction and he just skyrocketed to that position from obscurity. The other artists we’re talking about, Jeff Koons and David Hockney, are practically household names at this point. And then you have Beeple. And that is not supposed to happen. So there is something about the system being almost hijacked in a way by outsiders. We had more than 40 bidders in the Beeple sale and only three of those bidders were previously known to Christie’s. So this is a price that was driven pretty much completely by crypto-native people who had never interacted with Christie’s before.
My impression is that a lot of the people bidding on this digital art are in the crypto world and had some sort of vested interest in it succeeding.
That seems to run a little bit counter to what you’re saying. Is there an element of “crypto propping up crypto” puffery that should shine skepticism on this whole thing?
Skepticism I don’t think is the right word because it’s definitely real. The money might be fake in that it doesn’t exist. But it has real power. And everything that these guys are doing in space has real reverberations throughout all of the creative industries that are out there.
After the Beeple sale, I was contacted by all sorts of famous musicians and movie studios and you name it, if they have intellectual property, they were trying to figure out new ways to use that artist to create new verticals and revenue streams.
And definitely, the people bidding on [Beeple] were coming from the crypto space. But MetaKoven [the buyer] is a really committed collector of NFT-based art. And Justin Sun [the runner-up in the sale] too, and all the other bidders who didn’t make their bidding public but helped to get the result to where it was. There’s a strong number of really sophisticated collectors out there who are driving the results in this marketplace, but it’s no different when you compare it to the kind of small cadre of people in real-life art that we sell. I don’t think it’s a mirage or there’s any sort of tomfoolery going on with the results you see.
So why is an NFT more than a JPEG? And what does the buyer get when they buy an NFT?
They get an indelible entry on the blockchain where that NFT is hosted. Most NFTs are hosted on the ethereum blockchain because it has the capability to run decentralized applications.
An NFT is linked back to a smart contract that explains how the NFT interacts with the blockchain in perpetuity. So what you’re getting when you buy an NFT is indelible proof of your ownership that cannot be augmented. It cannot be faked in an impressive and convincing way. You’re buying an absolute unequivocal assurance that you own this work. It cannot ever belong to anybody else unless you decide that it’s going to move. Otherwise, it’s just going to stay in your wallet and be yours forever.
But it’s not like buying the Mona Lisa where the atoms are unique. Why would someone spend that Warhol money on a piece of digital art?
Why is it important that Duchamp’s urinal is a work of art and an icon of modernism, whereas the one you and I use in the bathroom every day is just a thing that’s there for us to pee on? It’s because the community has decided that it’s important. I often ask people when they have this question—they are usually of a certain age—and I say, do you have kids? And if they say yes, I ask if they play Fortnite. More often than not, they say yes. And I ask if they’re familiar with the concept of owning a “skin” in Fortnite, which gives you absolutely no competitive advantage in the game but is the reason why Fortnite is so incredibly lucrative. People are buying these things via microtransactions constantly. If they can understand where that desire comes from, then you start to understand the draw of NFTs.
You said before you can’t wait till NFTs are completely absorbed into the art world. What does that look like?
I was researching the CryptoPunks [art project], which vividly illustrates what the blockchain can do. And if you apply the Cryptopunks model to any of the markets that exist out there for bluechip fine art, it will radically change the way we conduct business.
If a user makes an offer to buy a Punk, that’s recorded. If a user buys a Punk, that’s recorded. If a user lists a Punk for sale, that’s recorded. You can see the path that every Punk has taken since 2007 when it was released on the ethereum blockchain. You can trace it back to its origin, because that’s what a blockchain does. It’s just one reliable, truthful record.
So if a compendium of information on every authentic Pablo Picasso was out there, it would totally, radically, and forever change the marketplace for Pablo Picasso’s work. It would solve for authenticity testing, because if the work you’re about to buy is not recorded on the Picasso blockchain, then it’s not a Picasso. But you would also know how much the person is trying to sell it to you for, how much they paid for it. Do they actually own it? What else do they own? Who owned it before then? What’s its price history? What are the prices being paid for comparable work? It would just be a radical tool for the art market. And I think that it’s inevitable that it’s going to be useful for every industry that sells things where the price is a combination of objective, subjective, or licking your finger and sticking it in the air. The utility just can’t be ignored. It’s that revolutionary.