NFT Art: Q&A with Blockchain Entrepreneur and Crypto Investor Aram Barnett
March 19, 2021 FEATURES
NFT Art: Q&A with Blockchain Entrepreneur and Crypto Investor Aram Barnett
Unless you’ve taken a vow of internet celibacy, or have somehow managed to avoid the news cycle of the past two weeks, then you likely have come across the subject of NFT art. NFTs — which stands for non-fungible tokens — are non-divisible assets that exist on the Ethereum blockchain. This clunky wording refers to a complex system of minting a token in a public ledger that allows anyone to verify a work’s provenance and full ownership history. The system of verifying an NFT involves something called Proof of Work (there’s also Proof of Stake, which is less environmentally impactful yet not as secure), which means computers all over the world have to work really hard to validate it on the blockchain. In turn, this energy consumption is quite significant; those concerned about the environment have taken a hard stance against NFT art due to its contribution to climate change.
In this interview I talk with blockchain expert, entrepreneur, and AR/VR/videogame developer Aram Barnett. I ask him about all things NFT art, from both a technical and personal perspective. We discuss how NFTs are made, stored, sold, and traded, and Aram offers up some clear steps for how to go about purchasing or selling your own NFT.
Included at the end of this article are a list of resources with which you can learn more about NFT art, blockchain, the ecological toll of blockchain technology, the unfortunate rise of Beeple fame, and our culture’s long-upheld obsession with scarcity.
CORNELIA SMITH: How would you describe NFT art in a way that’s easy for non-techy people to digest?
ARAM BARNETT: NFT art is digital art that you can cryptographically verify that you own the original copy. You own the ‘one of one.’ This is incredibly powerful because images and pieces of art online get shared hundreds, thousands, millions of times; but being able to say ‘this is the genuine artifact’ is extremely valuable. What makes it special is being able to take digital art — which the art world traditionally shunned as a different medium — and now having the ability to show its provenance better than physical art. I can trust the blockchain a lot more than someone telling me a work of art is a genuine Picasso. I can look back in the chain, which is publicly auditable, instead of someone simply claiming a work as genuine.
NFT art also makes art far more accessible to the general population thanks to the speed with which you can transfer stuff, and the fact that anyone can go see the history of who has owned the piece.
CS: How long have you been involved in the NFT art space, and what draws you to the world of art and tech?
AB: When it comes to the NFT art space, I’m pretty new to the art side. On the NFT side, I’ve been involved since 2017, with the first foray being a video game. I’m one of the co-founders of the game Cryptopets (think NFT Pokemon). Nam and I met while I was working on Vanimals, which is AR NFTs. So I’ve had two pretty solid projects under my belt.
CS: When did you become aware of NFTs, and how did you get introduced to it?
AB: We saw the smart contract get created a few years ago: the ERC-721, which is what an NFT is. We saw that getting created, we saw somebody implement it with Cryptokitties, and I felt I could do better than that. Through the Ethereum community I came across it and decided to create my own NFT to build a video game around it.
CS: Does somebody create a piece of digital artwork, or something digital, and then make it an NFT?
AB: Effectively what the artist is doing is tokenizing the art. The non-fungible token is then mapped back to a piece of art. So I could go and create a digital piece of art, then go and mint the token, and then tie the token to a digital piece of art. So whoever owns that token owns that piece.
Another way I could do it is make an NFT that can then be bought and turned into a physical artwork. For example, a sculptor can take a 3D rendering of their sculpture, make an NFT of it, tokenize that, and then go put it out for sale; whoever purchases that NFT can then go and turn it into the artist, and the artist will be commissioned to go and make that sculpture. So you can turn the digital back into physical if you wanted to.
CS: Yeah I was curious about that. With what I’ve read about NFTs so far, it’s primarily digital pieces of art that are bought and sold, and I wasn’t sure how a physical work of art plays into that.
AB: Would you like an example?
AB: So there’s a project called Unisocks. There is a fixed amount of Unisocks — a pair of socks bought with a token. I can go turn in my Unisocks token and I’ll get sent a pair of Unisocks. This is one of the really big implementations of turning a digital good into something physical. It shows scarcity. So now one Unisocks NFT is trading at close to $100,000 [as of March 19, 2021 Unisocks was trading at $87,832.65], which is a great deal of money for a pair of socks. So you could be one of 3 or one of 10 people in the world who has this pair of socks. Which is pretty exciting.
CS: So in terms of minting an NFT, you need to do either Proof of Work (PoW) or Proof of Stake (PoS), right?
AB: For this question you have to do neither, where the PoW vs. PoS comes into play is what type of blockchain you’re implementing it on. For the sake of simplicity, the artist won’t have to worry about that — that’s actually a super technical question. When you’re actually minting an NFT you’re effectively creating a contract on the Ethereum blockchain. Either you can do it yourself from your terminal, but usually people are going to go through a platform like Rarible or Zora or Foundation to ‘mint’ their NFTs. So what you’re doing is creating a piece of code, this contract 721; the minting process is just creating the contract itself, you’re creating the token. So the Ethereum blockchain is using Proof of Work, and is migrating to Proof of Stake.
CS: I’m curious about the ecological impact of proof of work in particular. I know some platforms are trying to move to proof of stake because it’s a little bit more sustainable. Artists can go through these platforms to get their NFTs minted, and they themselves don’t actually have to do the verification; but the process of verifying something takes a lot of energy, and lets out a lot of carbon emissions. I’m wondering what your view of that is, and what your understanding is of this process of minting something as an NFT that has such a detrimental impact on the climate.
AB: Proof of Work is certainly more environmentally impactful. There are multiple reasons people are trying to move to proof of stake, and I don’t think it being ecologically friendly is the main reason. Proof of Stake is a lot cheaper and transactions can move a lot faster. With the Ethereum 2.0 update, we are trying to get to what’s called Layer 2 solutions.
The way blockchain works, you first have to mint it, everyone in the world needs to get a copy of that record, everyone has to verify it’s legit — this gets expensive. There are computers all around the world constantly checking and constantly trying to mine. The mining process is what gets really expensive.
The difference between PoW and PoS is that when you get to PoS, all the tokens are mined. You’re no longer mining, you’re just guessing math problems and fielding transactions. Where the trade-off is right now is that you can go to an environmentally friendly marketplace, called layer 2. Instead of having all your actual contracts on the actual blockchain, it’s called a sidechain. What happens is that all the transactions happen on the sidechain and at the end of the week they all get batched up in one go and get put on the blockchain. It’s a lot cheaper for the end market and it’s a lot friendlier because the miners don’t have to do as much work. Now, stuff can go wrong in that week, and it’s not necessarily permanently on the blockchain itself until the end of the week. There’s a security trade-off when you’re dealing with these layer 2 solutions.
The underlying protocol for Ethereum is going to be a little bit sluggish. The big thing with blockchains now is you have this thing called Zooko’s Trilemma — you can only choose two: speed, security, and decentralization. So you can have speed and decentralization, but you’re sacrificing security. We’re trying to get all three locked down right now.
As an artist you can try to find a layer 2 marketplace that is more ecologically friendly. But I don’t think the art markets themselves are having the biggest impact. The artists themselves, the creation of an NFT, and the running of the art market isn’t contributing to climate change. I don’t want people to think that. It’s the actual mining of the tokens, and having computers guess random numbers hundreds of millions of times a second that is mainly contributing to the ecological impact of these blockchains. In my opinion, I don’t necessarily worry about the ecological impact of these art markets and NFTs. I’m much more concerned about the underlying protocols and how the tokens are being created. That’s where the big spin is coming in.
CS: Is Ethereum 2.0 projected to roll out soon? I know it’s been in the works for a few years.
AB: I don’t know what soon is. I couldn’t tell you. I’m not sure when everything will be fully shifted over. There are still debates on whether you’d want to do security or compatibility, when it comes to dealing with code itself.
You’re not just dealing with NFTs. There’s a bunch of other contracts running on here: financial markets, derivative markets, lending products. They’re all on top of this blockchain. You’re really trying to steer this ship and make sure that when you do these solutions, that you’re doing the right thing. There are the optimistic roll-ups, the ZK roll-ups. The biggest difference is that the optimistic roll ups make the existing infrastructure, the existing smart contracts, compatible with Ethereum 2.0. With an optimistic roll-up it’s easier to go and port stuff over. However, with a ZK rollup, you can make every transaction anonymous, which is valuable for security if you don’t want to be traced.
The big purpose of this blockchain is to have your digital anonymity, which is very very important. There are certainly different trade-offs. There’s hundreds of billions of dollars of value sitting on these things now. So we can’t just take things lightly. I say take your time — I think we need to take our time when it comes to developing these things. If it does get messed up then all your NFTs just kind of go out the window.
CS: How do you see blockchain technology potentially transforming the art market? What is its role?
AB: From what I’ve talked to with artists, galleries have kind of shunned digital art. This medium had the ability to adapt to blockchain in using the technology, and they didn’t listen, and now software runs art now. I think people don’t really understand the great impact it will have. I can take my NFT and put it up as collateral to get a loan. That’s pretty powerful, and I can do that super securely right now. So being able to take a loan out with my pieces is really interesting, and also price discovery is something very powerful. Art markets are very opaque, blockchains are very transparent. Being able to find the actual price of a piece is pretty cool. In addition to that, being able to give artists a lot of their money back instead of having a gallery taking 50% and you take the other 50%, the artist can sell a piece with a gallery but can now get 10-15% in perpetuity every time one of their pieces gets sold. So they can constantly have a stream of income based off of the pieces they created. It’s extremely powerful.
For the size of the art market, art being on blockchain now will grow the market 10x. It’s the perfect storm: you’ve got a bunch of digital artists with a generation who grew up looking and enjoying their pieces on Instagram, who are digitally made and digitally understand how non-fungible tokens work, who now have the ability to not only purchase their favorite content creator’s stuff, but also use that for other traditional financial assets. For NFTs and crypto in general, we are in the third inning right now, top of the third, which is very revolutionary. So I think it’s gonna have profound impacts — especially the ability to go and take the digital physical. I’d love to buy one of KAWS’s pieces if he had an NFT, and then commission him to go and create a KAWS statue.
To go back to your original point, I think that’s going to be the ecological impact. If I have the NFT, I have the option to go and turn it into a physical piece. For example, If Nike has 100,000 sneakers that they want to create and they sell the NFTs for, they don’t have to produce all 100,000 sneakers anymore. Inevitably, people want these sneakers now for the resale value. If I can capture that resale through digital means, then why do I have to have the physical in the first place? Nike only might have to make 50,000 shoes depending on what the actual demand is. Most of the time people are buying super exclusive sneakers and just sitting on them, using them as a tradeable asset. If anything, that is the value itself.
CS: Do you think NFTs on blockchain will lead to a more equitable art marketplace?
AB: For sure. I certainly think it’s going to be a lot fairer because creators can collect royalties in perpetuity. And someone, say, on Instagram, who has 100k followers for their art, can now go and monetize that following. They are no longer at the mercy of an art gallery or producer. They can now go and tokenize their creation and leverage their existing community to monetize and add value to it. Creators of culture are finally going to be able to live off of their art and not be taken advantage of.
It’s interesting from a legal point of view. Let’s say if I made a beat, and someone goes and steals it, if I tokenized it there’s a cryptographic record of the date I created it. It’s proof in a court of law. Everyone in the world can see this is a genuine artifact. It’s really the democratization of art and creation and how that stuff gets monetized. There doesn’t have to be a middle man — there are just people who are going to be participating in creating something. There are far less gatekeepers.
CS: So artists can benefit from sales of NFTs by getting a cut every time it sells. Are there any other advantages to artists using NFTs that you’d like to specify?
AB: The cut of sales in perpetuity is a pretty big deal. Also, with an NFT, you have a perfect replica of your art. That’s another upside. Now if you take the digital physical, then things are going to be a little bit different in the physical space. But in the digital it will be perfect. Another benefit is that it reduces the cost in art supplies.
CS: How do people engage with NFT art?
AB: One of the solutions is having assets in AR, though that doesn’t work for all images. Another example is a company called Nifty Frame. The frame itself is a piece of art, but the underlying software allows me to go and cast my NFTs to a screen as if I was in a gallery. I can go and buy a Nifty frame, it comes with the TV itself, and I go and scan the QR code and I can show all my assets on display. So there’s different mediums.
One of the things I love about what Nam and I are doing is we’re really pushing the way you’re interacting with these assets. We’re working with an artist to go and put art pieces in Harlem, placing AR art down the Hudson and three in Central Park with the actual geo-coordinates put inside of the NFT itself. So you have to actually be at the location of the installations to go and view it.
You could also have a fully VR experience, going into this digital world and experiencing an exhibition. I’m also putting together a company now to do holograms for NFTs. We’re constantly trying to push the envelope on how you experience an NFT.
CS: On a much more basic level, the ways to see an NFT and potentially buy one is to go on one of these marketplaces.
AB: Correct. You can go on a marketplace, or someone can gift you an NFT. I’m actually gifting NFTs to people right now as we talk.
CS: So if I wanted to buy an NFT, how would I go about doing that?
AB: Right now you have to buy an NFT with ether. If you want to buy an NFT:
1. You have to have a wallet. This will hold the ether you use to purchase it, and the NFT itself. Do NOT use Coinbase to buy NFTs. Don’t do it! You’ll hurt yourself.
2. You need to download something called MetaMask. MetaMask is a plug-in for your Chrome browser (there’s also an Android and iOS application, but the majority of blockchain apps are going to be accessed through your computer).
3. Once MetaMask is installed, you’re going to purchase ether. You can purchase ether from Coinbase, if you need to, but you don’t necessarily want to hold all of your coins in Coinbase because I don’t think Coinbase is compatible with NFTs yet. Once you purchase your ether, you go and take your MetaMask wallet address, copy that, and then paste it into Coinbase, and then send the ETH from Coinbase to your MetaMask. It’s just like sending an email but instead of words it’s money. You don’t need to use Coinbase—you can purchase ether from anywhere that sells it.
4. Now find a marketplace of your choice. It could be Zora Gallery, Rarible, Foundation, it doesn’t really matter. From there you can go and purchase your art. Once you buy the NFT, you send the money to the market, and they will send you a smart contract.
5. Now you have the NFT in your wallet. I recommend two things: for a quick look up to verify that it’s in your wallet, you can go to eth.af to see the contents of your wallet. Option 2 is to download Rainbow Wallet for iOS.
CS: On the other end, how would an artist go about selling an NFT?
AB: So you got your Metamask, you bought your ETH. You then go and click the create button. You have the choice of creating either an ERC-721 or a rarible NFT. The difference is a matter of cost. The 721 costs more money to create because a lot of information is on the chain itself. Regardless of what you choose, you own the asset 100%. Once you upload your art, add a description, and then you hit the mint button. And it costs money to mint so you should have ether in your wallet to go and mint the token itself. Once you mint the token, you can start promoting and selling it. You can have people bid on the work or sell it at a fixed price.
CS: So the buyer then has ownership of that thing. Where does the artist stand in terms of ownership after it’s sold?
AB: As soon as the piece is sold it’s no longer the artist’s, it’s the owner’s.
CS: Can the buyer do anything they want with it?
AB: I believe so. They could sell it, but I’m not sure about the digital rights and reprints. I would assume the buyer could do whatever they want with it because they now own the piece.
CS: What would compel someone to buy an NFT?
AB: Like most things in crypto: utility and resale value. The ability to go make a profit and store a value. It’s part of the reason people buy traditional art. It’s the emotional connection to the piece, the resale value, and the stored value. The utility could be used as clout, as well as an asset.
CS: That’s what I was getting at with assets and asset-building, that’s kind of what the art market is generally. Do you have any favorite artists or NFTs that you’ve collected or had your eye on?
AB: I have one piece which I love, by an artist named 3irdeye. It’s called “To the Moon” and is all about Bitcoin. It shows off the wildness of the space, using really bright colors. There are a lot of artists coming down the pipeline who are existing artists doing NFTs. Will Nichols, who we’re working on an installation project with, has become one of my favorite artists because I love his pictures and the stories behind them.
I like purchasing things that I like. I’m a pretty average person, and luckily being average, there’s a lot of other people like me so my tastes align with the culture. Usually NFTs do pretty well on a return on investment when I’m looking at that. The 3irdeye piece I’m definitely not going to sell. I have a lot of Cryptokitties as well that I purchased a couple years ago. The 3irdeye piece I’m never selling, ever. 3irdeye is actually my little brother. Aside from it being my brother, even if I saw the piece, I’d purchase it. Just the color itself, the memes if you look into the picture—it’s a bit of a meme itself. I want everyone to see this piece.
WORKS CITED / ADDITIONAL RESOURCES
How Crypto-art Might Offer Artists Increased Autonomy, Rea McNamara, Hyperallergic
How to Look at NFTs, Brian Droitcour, Art in America
What are Non-Fungible Tokens (NFTs)?, MakersPlace
ERC-721 Non-Fungible Token Standard, Kalle Moen, Sam Richards, Artur Gontijo, ethereum.org
NFTs are transforming the digital art world, Foundation
The NFT craze encapsulates the absurdity of the art world—and its obsession with authenticity, Blake Gopnik, The Art Newspaper
‘Art enthusiasts’ burn a Banksy print then sell it as an NFT, Anny Shaw, The Art Newspaper
Episode V. Toward a New Ecology of Crypto Art: A Hybrid Manifesto, Memo Akten, Jason Bailey, Alice Bucknell, Chloe Diamond, Primavera De Filippi, Fanny Lakoubay, Geert Lovink, Casey REAS, Flash Art
CryptoArt.wtf — to see estimations of the carbon footprint of CryptoArt NFTs as a result of blockchain interactions (Proof of work, Ethereum)
Reports of Stolen Art on NFT Marketplace Raise Issues for Crypto Collectors, Valentina Di Liscia, Hyperallergic
‘Beeple Mania’: How Mike Winkelmann Makes Millions Selling Pixels, Mickey Rapkin, Esquire
What is a Blockchain? Is It Hype?, Shira Ovide, New York Times