Sotheby’s is joining the non-fungible token craze through a collaboration with digital artist Pak.
“We’ve been following the NFT space for some time,” said Sotheby’s CEO Charles Stewart on Tuesday at CNBC’s “Squawk Box”, where he announced the auction house’s partnership with Pak. The next sale is scheduled to launch next month.
“This is new for all of us,” added Stewart. “But there is a lot here that is really exciting and we think it has staying power.”
Pak has been producing digital art for decades, but the artist’s identity is not known.
“The artist prefers to remain anonymous, partly because the artist wants it to be about art, which is not necessarily a new thing in the art world,” said Stewart. “But it is one of the many new things about crypto art, in particular, that I think is different and potentially a little disturbing, certainly when you compare it to the world of traditional art.”
Sotheby’s decision – founded in 1744 and known for selling multimillion dollar paintings and other luxury items – to embrace NFTs represents the latest milestone for the growing digital art form. It comes after Christie’s auctioned a $ 69 million NFT collage last week at auction, elevating its creator, Beeple, whose real name is Mike Winkelmann, to a place among three most valuable living artists.
NFTs are blockchain-based assets that are unique by design, a shortage that proponents say supports their value. Ownership of a specific NFT is registered on a blockchain network, the distributed digital ledgers that support cryptocurrencies like bitcoin.
In addition to digital art pieces, basketball highlights known as NBA Top Shots have become popular to buy as NFTs. Earlier this month, rock band Kings of Leon released their latest album in the form of an NFT.
Some have rejected NFTs as a fad, whose values will plummet over time. Skeptics also note that the rise of NFTs coincided with a huge rise in cryptocurrencies such as bitcoin, famous for its volatility, and ether, which runs on the Ethereum blockchain network.
The buyer of Winkelmann’s $ 69 million NFT was the pseudonym crypto investor Metakovan.
Winkelmann said he sees a range of applications for the digital infrastructure that underpins NFTs. “I really think this is a technology that has so many use cases,” he told CNBC on Friday, calling it “a blank slate, even beyond digital art.” He added: “Whenever you want to prove ownership, I think there is a use case there.”
But even for NFT-based digital art, it’s still “too early, needless to say”, according to Stewart of Sotheby’s.
For its partnership with Pak, New York-based Sotheby’s will sell unique pieces of digital art and “what’s called ‘open editions’ in the NFT world, where many people can buy tokens for the same job,” explained Stewart.
The NFTs are bringing a new interest and a “new aesthetic” to art, Stewart said, arguing that there is potential “to bypass many of the traditional guardians and verification processes in the physical world of art”. He added: “This is really exciting and, as it develops, we are very curious to see where it takes us.”
Benoit Pagotto – a co-founder of RTFKT, who helped create a collection of recently sold NFT-based digital sneakers – told CNBC that he expects some people to take a little time to fully understand the excitement surrounding collectible crypto.
“Educating and updating people is something we need to do,” Pagotto said on Tuesday at “Squawk Alley”. “But at the same time, we know that people will never understand [NFTs], just as today there are still people who do not understand why e-sports is so strong and such a cultural movement. With these people, we will not waste a lot of time explaining. “
– Jessica Bursztynsky from CNBC contributed to this report.