That’s because Venkateswaran and Sundaresan invested heavily in a new form of digital collector with the complicated name of non-fungible tokens, or NFTs. Based on the cryptocurrency technology known as blockchain, these digital items function as exclusive certificates of authenticity, making it possible to transform easily copied digital files into exclusive collections – sometimes worth tens of millions of dollars.
The Beeple sale broke a record for the most expensive NFT ever sold and started a global conversation about NFTs, their value and whether they are a lasting addition to the digital landscape. But the impressive sum involved attracted global headlines and some suspicions that it could have been planned for advertising that drew more attention to the NFTs, which could increase the value of the pair’s existing holdings.
The involvement of Christie’s, a century-old auction house, should be enough to reassure skeptics, said Venkateswaran on a call from his home in South India. “I think the biggest problem here is that people thought it would be impossible.”
This is certainly the case with Beeple himself, who in real life is a digital artist named Mike Winkelmann. “This whole NFT thing was not something I predicted,” he said. During the auction, the artist was in his living room near Charleston, South Carolina, surrounded by family and a video crew, and said it looked like a “bomb went off in the room” as bids rose quickly. Another cryptocurrency bidder and entrepreneur, Justin Sun, lost in the final seconds after bids exceeded his previously set maximum.
The NFT market was already taking off, with transactions last year quadrupling to $ 250 million, according to a report by NonFungible.com, a website that monitors the market. The sale of Beeple fueled this growth and helped transform niche token NFTs, especially attractive to cryptocurrency nerds, into a new type of digital asset that attracted the attention of the art world, music industry, sports and speculators.
Not to be outdone, auction house rival Sotheby’s is planning its own NFT sale, collaborating with the pseudonym digital artist Pak on a sale next month.
Winkelmann began to see the possibilities of NFTs for digital artists in October, when he tested the waters with an initial “drop” of his work. “People can really own my art and collect it and, you know, pay good money,” he said in an interview this week.
It was after another sale last year that he sought out one of the losing bidders, Sundaresan, who uses the alias Metakovan.
The art world was not a common talking point for Sundaresan and Venkateswaran when they met in 2013, while working at The Hindu, a daily newspaper in Chennai, India. Sundaresan was a technology consultant in his early 20s; Venkateswaran was a journalist.
Both had a humble upbringing. Sundaresan didn’t have the money to buy a laptop when he was learning to program, so he walked around with a thumb drive and borrowed his friends’ laptops, said Venkateswaran.
But in 2020, Sundaresan, now living in Singapore, enriched himself with a series of ventures and investments in cryptocurrencies. With Sundaresan’s money and Venkateswaran’s analytical eye, they started exploring NFTs with a new fund called Metapurse.
Sundaresan, who declined to be interviewed this week, created the persona Metakovan as a reference to his affection for virtual worlds known as “metaverse”. The name means “King of the Goal” in the Tamil language. Venkateswaran, who lives in Chennai with his wife and two children, calls himself Twobadour. In a blog post last week, the pair revealed their true identities and sought to dispel some of the mystery about their motivations.
“The aim was to show the Indians and people of color that they too could be patrons, that cryptography was an equalizing power between the West and the Rest and that the global south was growing,” they wrote.
It was in December that the Metapurse pair made their first major investment in Beeple, buying 20 of their works for $ 2.2 million and presenting the artist with 2% of their new NFT token fund, called B20s, which were designed to allow large groups of people to share ownership of a work of art.
This was the precursor to the historic March sale of Beeple’s “Everydays: the First 5000 Days”, a digital archive combining works that Beeple created every day in May 2007 at the beginning of this year. Many of them are grotesque and cartoonish approaches to what was going on in American politics or pop culture. The works also follow the rise of Beeple from a little-known graphic designer to an internet personality with great followers on Instagram and multimedia projects with pop stars like Nicki Minaj and Justin Bieber.
“If you look at each image at face value, obviously not all of them will stand the test of time,” said Venkateswaran. “Not all 5,000 are masterpieces. That was never the point. Not everything Beeple exhibits is gold. We don’t love it at its feet. That’s not what we were. It’s more about the combined narrative than what it represents.”
The purchase shocked the worlds of art and finance, but in a way it was quite conventional, said New York art lawyer Leila Amineddoleh.
“A lot of the art market is saying, ‘I have something unique, it’s rare, I own it, look at me.’ This is not so different, “she said.” The whole value of an NFT is to be able to say that this is an original. You are buying the right to brag about saying, ‘I own the token.’ But really, anyone can access art. “
Amineddoleh said the blockchain technology that underpins NFTs and other cryptocurrency markets also provides a transparent ledger for recording art transactions. But for skeptics in the largely deregulated cryptocurrency world, the sale invited further scrutiny.
Christie’s declined to comment on the details of the sale’s financial structure, except to say that the full amount was paid in a cryptocurrency known as Ether Define, marking the first time that Christie’s accepted cryptocurrency as a payment.
“Obviously, there is a trail of money and Christie’s had a set of grants she was willing to work with, which she examined and approved,” said Venkateswaran. “And these are the exchanges that were used to make the payment. Therefore, Christie’s has all the information.”
Cryptocurrency exchanges may be subject to manipulative behavior, according to research co-authored by Friedhelm Victor, of the Technical University of Berlin. But this usually involves investors who buy and sell the same assets over and over again to create a false sense of hectic business activity.
This round-trip negotiation has not yet become commonplace with NFTs, in part because they usually imply higher rates, said Victor. “Crazy speculations are not uncommon,” he said of the Beeple sale. “This is a very smart strategy to draw a little more attention to this whole space.”
It definitely happened. But Venkateswaran said the attention does not mean that he and Sundaresan are making a big profit from the tokens. “Math doesn’t match,” he said.
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O’Brien reported from Providence, Rhode Island and Chan reported from London.