Could Non-fungible Tokens Revitalize Hong Kong Creative Young Talents?

Jazmine Boykins is a 20-year-old digital artist. Her online artwork, while receiving positive feedback, did not produce any real income. But Boykins has recently sold the same pieces for profits using non-fungible tokens, also known as NFTs. NFTs enable artists like Boykins to gain from their artwork.

Hong Kong artists frequently struggle to get their voice out due to limited gallery spaces. Is it time for these artists to start looking into this new emerging tool to market their work?

On the surface, the whole concept reeks of a bubble: investors paying millions for works that can often be viewed and shared online for free.

Since the pandemic, innovative business models are constantly evolving. The financial sector is enjoying its own big-bang moment in the form of special purpose acquisition company (SPAC). Similarly, NFTs are throwing the art world into a frenzy. In January and February alone, more than US$150 million dollars were spent on such blockchain-backed artworks, memes, and graphics interchange format (GIFs). Even the National Basketball Association (NBA) has lunged headlong into this craze by creating ‘NBA Top Shot’, an NFT-based platform that allows basketball fans to trade licensed video highlights.

Like Bitcoin, NFT is built on a blockchain, which is a fraud-resistant decentralized ledger. But unlike Bitcoins that are fungible, NFT certifies a digital asset to be unique, hence the term ‘non-fungible’. To sell their artwork as NFTs, the creators must ‘mint’ digital tokens on a blockchain before auctioning their pieces in an authorized NFT marketplace.

On the surface, the whole concept reeks of a bubble: investors paying millions for works that can often be viewed and shared online for free. Many speculative collectors are looking at NFT as an alternative investment instrument, no different from any other financial product.

There is an argument to support NFT, however. Due in part to the pervasiveness of Internet piracy, many original digital creations are grabbing the attention of the younger generation, but only receive a disproportionately meagre financial return compared to traditional art. By permitting tamper-resistant ownership via NFT, artists can sell digital art for real value for the first time.

The inflated value is not just for artist’s labor, but also for the bragging right to lay claims to one-of-its-kind computerized pixels.

Beyond enriching our increasingly virtual lives, NFT levels the playing field between traditional and digital art. After all, why should we discount the value of one artwork over another by the creator’s medium of expression? The traditional art space has long been criticized as being elitist. NFTs can break down barriers by widening access, legitimizing the economics of being an artist, and attracting a new demographic of collectors.

Before this development, the value of digital art has been nebulous, in large part because the product itself is so freely replicable. Traditional art holds value because it exists in unique physical form. It explains why Pablo Picasso’s painting Femme Assise près d’une Fenêtre (Marie-Therese) was sold for a staggering US $103.4 million this month after only 19 minutes of bidding.

In contrast, it was more difficult to understand why digital creations have any financial value. NFT adds the crucial element of scarcity to digital art, which helps artists commoditize their works. The inflated value therefore is not just for artist’s labor, but also for the bragging right to lay claims to one-of-its-kind computerized pixels.

A bubble it may be but what do Hong Kong artists have to lose to give it a try? Limited by physical space and recognition, budding artists often suffer from a dearth of resources to show their talents. Using emerging technology such as NFT could inspire them to dip their toes into hitherto uncharted territory.

The wider public is receptive. In the west, a wave of new art lovers is looking for new communities, or even inspiring past generations of artists to develop new art forms. NFT payment can democratize the experience of art and its ownership. This is most apparent when looked at through the lens of black digital female artists such as Boykins, whose works carve out a long-waited avenue for diverse voices across the art world.

NFTs also epitomize new-age aesthetics. Many innovative, and sometimes controversial styles, of NFTs are grabbing the attention of artists and collectors alike. Recently, American digital artist, Beeple sold a piece for a whopping US$69 million, the third highest price fetched by a living artist. The work was a collage of 5,000 pictures that included drawings of Tom Hanks punching an anthropomorphized coronavirus. The influx of new art forms can reimagine the way artists speak through their work.

If such an unorthodox business model is proven viable, NFTs might represent a major leap toward the perfect combination of art, finance, and blockchain technology.

Perhaps reflective of the unconventional, provocative styles of NFT-based art, the enterprise also has its dark side. For example, how the current copyright laws interact with this emerging technology have left many legal experts scratching their heads. Then there are the environmental concerns. Like crypto mining, NFTs consume gigajoules of power and generate a massive carbon footprint. Technical barriers can also be prohibitive for older artists and those who do not have the technical bandwidth to fathom an Internet-fueled fad.

The shockwaves inspired by NFTs could still open new vistas for struggling Hong Kong artists. Novel technologies are always flawed in their rollout and can lead to potential market misbehavior. Despite the potential problems with NFTs, we should stay centered on how and in what way we can utilize such technology.

Nothing unique comes out if we bind ourselves to the mental grid of the past. Perhaps NFT can spur on Hong Kong-based talents to experiment and cross boundaries beyond the confinement of urban spaces. If such an unorthodox business model is proven viable, NFTs might represent a major leap toward the perfect combination of art, finance, and blockchain technology.

NFTs can serve as a harbinger that empowers new-age creators struggling to be seen. At the very least, Hong Kong artists must take a considered appraisal of NFT, rather than shunning it altogether. In its purest form, NFT can uplift the voices of artists in our almost-entirely digital world and, during the process, reward artists’ labor that has long been overlooked by the market.

(An abridged version of this article first appeared in the South China Morning Post)

Head of legal with an MBA@MIT. Exploring topics on education, data privacy, tech, entrepreneurship and PE/VC landscape.

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