It took Vignesh Sundaresan and Anand Venkateswaran a few minutes to realize that they had parted with $ 69.3 million for a digital artwork stored in a JPEG file, coincidentally securing their place in the the history of art.
“We weren’t sure we won,” Venkateswaran said, describing the trying final moments of the online auction for a 5,000-image collage by the artist known as Beeple. “We continued to refresh the page. “
The March 11 auction at Christie’s in London immediately made Beeple’s work one of the most expensive pieces ever sold by living artists, joining a well-known pool painting by David Hockney and an iconic sculpture by stainless steel bunny by Jeff Koons.
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Venkateswaran said he and his friend and business partner Sundaresan, both in their 30s, still agree to their landmark purchase. They also had to deal with external concerns that the transaction could have been a complicated ploy to inflate the value of the pair’s investment portfolio.
This is because Venkateswaran and Sundaresan have invested heavily in a new form of digital collection with the heavy name of non-fungible tokens, or NFT. Based on the cryptocurrency technology known as blockchain, these digital items function as proprietary Certificates of Authenticity, turning easily copied digital files into unique collectibles – 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 mind-boggling amount involved made headlines around the world and some suspicion that it could have been designed for the ad that brought more attention to 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, Venkateswaran said on a call from his home in southern India. “I think the biggest problem here is that people thought it would be impossible.”
It is certainly the case of Beeple itself, who in real life is a digital artist named Mike Winkelmann. “This whole NFT thing wasn’t something that I saw coming at all,” he said. During the auction, the artist was in his living room near Charleston, South Carolina, surrounded by family and a film crew, and said he felt like a “bomb had exploded in the room “as the bids rose rapidly. Another bidder and cryptocurrency entrepreneur, Justin Sun, lost in the dying seconds after bids exceeded the previously set maximum.
The NFT market is already taking off, with transactions quadrupling last year to $ 250 million, according to a report from NonFungible.com, a website that tracks the market. The sale of Beeple fueled this growth and helped transform NFTs from niche tokens appealing primarily to cryptocurrency nerds into a new type of digital asset that has captured the attention of the art world, the music industry, sports and speculators.
Not to be outdone, auction house rival Sotheby’s is planning its own NFT sale, collaborating with pseudonymous digital artist Pak in a sale next month.
Winkelmann began to see the possibilities of NFTs for digital artists in October when he tested the waters with a first “drop” of his work. “People can actually own my art and collect it and, you know, pay a lot of money,” he said in an interview this week.
It was after another sale at the end of last year that he contacted one of the losing bidders, Sundaresan, who uses the pseudonym Metakovan.
The art world was not a common topic of discussion for Sundaresan and Venkateswaran when they first met in 2013 while working for The Hindu, a daily in Chennai, India. Sundaresan was a technology consultant in his twenties; Venkateswaran was a journalist.
Both had a modest education. Sundaresan couldn’t afford a laptop when he was learning to code, so he would walk around with a USB stick and borrow his friends’ laptops, Venkateswaran said.
But by 2020, Sundaresan, who now lives in Singapore, had gotten rich from a series of cryptocurrency businesses and investments. 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 character Metakovan in reference to his affection for the virtual worlds known as the “metaverse”. The name means “King of Meta” in Tamil language. Venkateswaran, who lives in Chennai with his wife and two children, calls himself Twobadour. In a blog post last week the couple have revealed their true identities and sought to dispel some of the mystery surrounding their motivations.
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“The goal was to show Indians and people of color that they too could be patrons, that crypto was an equalizer between the West and the rest, and that the global South was on the rise,” they said. writing.
It was in December that the Metapurse pair made their first big Beeple investment, buying 20 of their works for $ 2.2 million and giving the artist 2% of their new fund of NFT tokens, called B20, which have were designed to allow large groups of people to share ownership of a work of art.
It was the precursor to the historic March sale of Beeple’s “Everydays: the First 5000 Days”, a digital file combining the works Beeple had created each day from May 2007 to the beginning of this year. Many of them are grotesque, cartoonish versions of what went on in American politics or pop culture. The work also follows Beeple’s rise from a little-known graphic designer to an internet personality with great following 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,” Venkateswaran said. “Not all 5,000 are masterpieces. That was never the argument. Not everything Beeple publishes is gold. We don’t worship at his feet. It was not our purpose. It is more of the combined narrative of what it represents.
The purchase shocked the art and financial worlds, but in some ways was quite conventional, New York art lawyer Leila Amineddoleh said.
“A lot of the art market says, ‘I own something unique, it’s rare, I own it, look at me’. It’s not that different, ”she said. “The whole value of an NFT is that it can be said to be an original. You buy the bragging right to say, “I own the token. But really, anyone can access art.
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Amineddoleh said the blockchain technology behind NFTs and other cryptocurrency markets also provides a transparent ledger to record artistic transactions. But for skeptics of the largely unregulated cryptocurrency world, the sale called for further consideration.
Christie’s declined to comment on details of the financial structure of the sale except to say that the full amount was paid into a cryptocurrency known as Ether, marking the first time that Christie’s has accepted the cryptocurrency as means of payment.
“There is obviously a silver trail and Christie’s had a set of exchanges that they were willing to work with that they checked and approved,” Venkateswaran said. “And those are the exchanges that were used to make the payment. Christie’s therefore has all the information.
Cryptocurrency exchanges can be prone to manipulative behavior, according to research co-authored by Friedhelm Victor of the Technical University of Berlin. But it usually involves investors buying and selling the same assets over and over to create a false sense of busy trading activity.
Such round-trip exchanges have not yet become mainstream with NFTs, in part because they typically incur higher fees, Victor said. “Mad speculation is not unusual,” he said of the Beeple sale. “It’s a really smart strategy to get more attention to this whole space. “
It certainly happened. But Venkateswaran said the attention doesn’t mean he and Sundaresan are making a big profit on the chips. “The math doesn’t add up,” he says.