Are NFTs the future of art?

While opinions continue to be divided, it is evident that NFTs have revitalised the art market.

There has been a noticeable shift in buying trends, which point towards a likely repositioning and revitalising of art as an alternative asset class. In the period prior to 2007-8, during a robust economic environment, there was a marked interest in art as a financial instrument, which was affected to a large extent in the subsequent period as a result of the recession. In fact, in the Indian art market scenario, there was a huge loss of confidence in art as an investment possibility.

However, since the growth in popularity of NFTs, there has been a significant impact on the overall art market itself. The use of blockchain technology has ensured that there is greater transparency in the transactions, digital records are maintained and are accessible, royalties are clear and established, and in general, transactions are swift and completed with ease. This has benefitted both the collectors and the creators. Artists no longer need to rely solely on the gallery system for sales but have the option to monetise through Facebook and Instagram pages, or digitise their art and make use of NFT platforms.

While this model has revolutionised the art market substantially, the financial and digital literacy challenges involved in minting NFTs form a barrier to a large section of artists in the country. Yet, with assistance, it has become easier for Indian artists to monetise through multiple channels and overseas platforms to create additional avenues for sales. The ‘digital token’ simplifies the process of transfer and completely circumvents the processes involved in packing, transportation and insurance of artworks.

Overall, in the last few years, there has been an increase in art awareness and its appreciation as a medium for entertainment and as an asset class. Amidst this, the younger population, which enjoys a much larger risk appetite, is not averse to alternative forms of financial investments. And, therefore, interest in art as a viable alternative asset class in the diversification of investment portfolios is rising with several new players likely to enter the market to offer auction services, and investment opportunities in the form of physical art sales, fractional ownerships, art funds and NFTs.

It has to be said that much discussion has revolved around the value or worth of digital assets, and while opinions continue to remain divided, it is evident that NFTs have contributed significantly towards generating interest in art and revitalising the marketplace. Whether the trend will continue or it will pivot into another format remains to be seen.

The author is a Bengaluru-based art consultant, curator and writer. She blogs at Art Scene India and can be reached on [e-mail]

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