Image Source: Unsplash
By Aela Niget-Powers, Student at ESSEC Business School
“Rembrandt” and “Artificial intelligence” are both such distinct words that no one could have imagined a relationship between a Dutch artist and a machine. Yet, in 2016, “The Next Rembrandt,” developed by a group of creators and technologists from an Amsterdam advertising firm, demonstrated the ability of technology to produce innovative works of art in the vein of historic artists. The art world is not immune to the rapid changes technology brings. Although how can these two seemingly disparate aspects, Art and Technology, possibly be linked?
You have probably pondered about acquiring one, heard the name casually, or just had enough of NFTs. Some of us may be troubled by the development of the digital era in today’s culture and imagine a world where technology is omnipresent, as seen in films such as Never Let Me Go, Jurassic Park, Terminator, and the list goes on. Some worry that technology will someday replace individuals, causing them to wonder how this will affect the society we belong to today. In contrast, others may be inspired by the staggering possibilities and unique prospects such as NFTs present in a shifting economic landscape. Regardless of the situation, there has been abundant controversy surrounding the creation of NFTs. As these unique digital currencies are authenticated on a blockchain network, the ownership of an NFT can be easily recognized and traced back to the originating inventor, allowing artists to add an additional financial value.
In 2018, the digital image “Forever Rose” was purchased for nearly $1 million in an online auction. Due to the growth of these online markets and NFTs platforms, artists can now sell and exhibit NFTs artworks outside conventional galleries, allowing collectors to purchase unique digital artifacts. However, the requirement for technological expertise and exposure to the blockchain may be more of a burden than an opportunity for smaller galleries or artists. Some argue that NFTs need more cultural and historical importance associated with conventional art forms and have a limited capacity for innovation in a wholly digital setting, which underpins the use of men in the conceptualization of art. Although NFTs do come with more restrictions, they provide new opportunities, such as overcoming some lineage challenges. NFTs thus highlight the ongoing discussion about whether NFTs are now more of a burden or indicate a promising future for artists. However, how do we explain NFTs’ psychological ascent in the art market?
Similar to those that fuel the global art market from a psychological aspect, the perceived value of artwork would be the first apparent psychological element to explain the influence of the development of NFTs in the art world. Yet, what is perceived value? In accordance with Kotler’s thesis, perceived value is the worth that a person ascribes to a specific good or service based on their convictions, objectives, and principles. All of us can go back to a familiar toy from our early years, or “Doudou,” as the French would say. Despite the fact that it had no monetary effect, we were deeply attached to it and were the ones who determined the primary value. NFTs are similar in that they have no intrinsic value on their own. Only available in the digital realm, this attachment to this fictitious value and the premise of these non-financial assets’ scarcity gives the NFTs an abundance of value on the art market.
Yet a different psychological factor that can partially account for the acceleration of NFTs’ growth in the art industry is the FOMO theory (fear of missing out). This notion became more prevalent in the 2000s with the emergence of social media. The thesis, first proposed by marketing expert Dan Herman, indicated that individuals only buy products out of familiarity or out of worry about missing out on an advantageous opportunity. As social media sites such as Tik Tok become popular, certain influencers create hype and market their way of life. More people feel indirectly pressured to invest if they want to attain the same lifestyle portrayed on social media.
The NFT investment can also be very appealing. Driven by rising interest in cryptocurrencies and relying on a sense of ownership in the art sector, NFTs created a speculation bubble with high volatility. This also highlights the present conundrum of art becoming increasingly entwined with technology and the purely commercial objectives that are integrating into modern art.
By 2022, the interest in NFTs started to wane (see graph below), leading some to believe that the NFT bubble had already burst.
Source: Statista
On the other hand, NFTs continue to be unpredictable and volatile in the art market. A number of notable museums, including the Pompidou Center and the Los Angeles County Museum of Art, are establishing new NFT collections. We can speculate if this represents a prospective return of the sector or merely a recall of something that has become our past.
What is left to convey is, as Bucchianeri pointed out, “Art is in the eye of the beholder.” Even if more psychological theories may account for the rise and decline of NFTs in the art world, they underline the complexity of all the interconnections that influence how digital art can be evaluated. Galleries may need to employ cutting-edge technologies and approaches while adhering to their core values and mission if they are to adapt and thrive in these challenging times. Only time will tell whether NFTs will survive, be reintroduced, or be replaced by a different type of technology as a result of the end of a trend. The challenges surrounding the digital effects, particularly on the art world and the underlying ethical quandaries, will be of greater significance.
Aela Niget-Powers
Aela is a student at ESSEC Business School, holding dual French and American citizenship. Committed to her passion for the arts, she attends night classes at l'école du Louvre to further her knowledge and appreciation of artistic expression. Aela has explored diverse cultures worldwide, fostering a global perspective. Her editorial endeavors are driven by a desire to elevate conversations, infusing them with a nuanced exploration of the dynamic interplay between art and society.
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