Last year at this time, Michah Dowbak had never heard of crypto art. Last week, his latest drop grossed more than US$4.3-million – the bulk of that in the space of five minutes. This has cemented the Thunder Bay-born and raised artist – who goes by the name Mad Dog Jones – as a crypto-art sensation, with the most successful primary drop to date on the Nifty Gateway platform.
“How do you describe making $4-million in five minutes?” Dowbak said a few days afterward. “My hands were numb, for one. I couldn’t feel my fingertips. My whole body was shaking.”
Crypto art is digital art with an attached unique identifier, in the form of a non-fungible token (NFT), on the blockchain. NFTs can’t be replicated and only the holder of the NFT can own that piece of crypto art.
The work is offered in “drops” – online sales that generally happen in two ways. Buyers can purchase an open edition (think of it as a numbered print, in traditional art terms). Each edition is sold at a set price, but purchasers have only five minutes to buy. The other part of a drop is the auction of a 1/1 edition, a single unique work. Bids for those are taken for 23 hours.
The sales are held on platforms such as SuperRare and Nifty Gateway, which is the site Dowbak uses. Nifty Gateway, which launched its platform last March, is owned by Gemini – the company founded and controlled by Cameron and Tyler Winklevoss, the twins perhaps best known for their Facebook history.
The crypto-art market has grown steadily, building to a buzz now audible in the mainstream, in large part because of the artist known as Beeple (real name Mike Winkelmann). Beeple’s opus is currently for sale at Christie’s – the first time the storied auction house is selling a purely digital work. Bids are being taken over two weeks.
Separately, on Wednesday, a work of Beeple’s sold on the secondary market through Nifty Gateway for US$6.6-million.
Beeple made US$660,000 from that. Unlike traditional sales of art, artists in the digital space earn a percentage of secondary sales; 10 per cent is standard. This is a major departure from the fine art world, where an artist is paid only for the original sale.
The platform also takes a cut – on both primary sales and secondary sales.
Buyers often come from the crypto space, says Tommy Kimmelman, head of artist relations at Nifty Gateway. “It’s largely technical-minded people who inherently understand how this stuff works. But we are starting to expand into other demographics.” He says the platform did about US$8.5-million in sales in January and, in a staggering jump, more than US$50-million in February.
Owners might display the art through their online profile – their website, social-media…