Physical versus Digital — Are NFTs Really Worth 3x Physical Art?
Pioneering Amsterdam artist Dadara posed the question: Which would be perceived as more popular — physical art or digital. NFT startup MHOUSE sent a strong message by buying both pieces. But perhaps the result of the auction is not the end of the story, but rather the beginning of a journey to find answers.
About Dadara: Dadara is internationally recognised for blurring the lines between reality and fantasy. Perhaps a black mirror, but one that has a rainbow at the end of the tunnel.
After making a nine meter high Greyman Statue of No Liberty in 1998, his Grey Man project took him to the iconic Burning Man festival in 2003 and made him an underground legend.
“People always told me my work was beautiful, but they never commented on the fact that I used a canvas: like 'WOW man, that is a painting with paint on a canvas, that’s so cool!', it was the conceptual idea, the colors, the brushstrokes, and how it was communicated that excited them. It’s about the painting, not the medium. It will be the same with NFTs, especially when NFTs are going to lose their novelty factor — the medium is less relevant than whether new boundaries are being pushed” — Dadara
About MHOUSE: The international invite-only members club for NFT innovators, MHOUSE represents integrity in the NFT space and is a stepping stone for exciting new opportunities.
“Our sole focus is to deliver value to our members. Cryptogreyman is a seminal moment in the quest to redefine art, culture and ownership in a digital age. We believe this will be a genre defining work of historical importance” — MHOUSE
NFTs Meet IRL in AMS
The relationship between In Real Life and Non-Fungible Tokens — a concept of digital property in the metaverse — continues to be explored in a challenging new project by renowned Amsterdam artist Dadara. The Burning Man legend asked which would be more valuable — a physical art piece or the same NFT. But his question did not stop there.
It’s well known that the quality of answers you receive are directly proportional to the quality of the questions you ask. Dadara did not fail.
To make the question more intriguing, Dadara created a hand-painted physical art piece to exactly mimic the 8-bit pixelated style of OG NFT projects immortalized by Cryptopunks. The physical piece is hand-painted… but hand-painted in pixels, as if generated by a Commodore 64 or Amiga. It looks like a piece of digital-native art. The only giveaway is the artist’s natural signature, a telltale and intentional giveaway that this pixelated artwork originated in the real world. A bridge, if you will, between the real and the virtual, or is it the other way around?
The NFT is a "one of one", a unique digital artefact that will never be reproduced by the artist. It is a digital scan of the original hand-painted piece… which itself was designed to look like digital.
Inception much? Now we are making art!
There were two auctions — the physical work and the NFT.
The physical auction was via www.bva-auction.nl requiring an account with username/email and password and traditional banking. The NFT sale was via www.rarible.com requiring just a web3 wallet and ETH or wETH.
The Koch x Bos gallery in Amsterdam hosted a live event and live streamed it to Innkeeper.eth, a venue in Decentraland, a virtual world in the metaverse.
The Physical Auction
It was relatively easy to register for BVA’s website and apply to take part in the auction. Username, email and password. No financial information required. In a charmingly old-fashioned way, honour and trust seem to mean something. Even though we are online and literally anybody with just an email address can bid. Ok.
CodeRave is MHOUSE co-founder and discovered Dadara’s work while featuring as an expert on an art marketing podcast with KochxBos gallery owners for vPatina in early 2021.
Dadara was one of the gallery’s featured artists, showing his WTF NFT and WFT manifesto. CodeRave was impressed by an artist actively thinking about NFTs and trying to push boundaries.
Interestingly, there was no financial commitment necessary to bid on the piece and as far as we can tell no mechanism to ensure payment is made, putting the artist in a precarious position. For the record, Coderave has already paid, though now he needs to trust that the physical artwork will be kept safe for him and will not be damaged in transit. Such buyer and seller risk are eliminated in the world of NFT art where digital payment and transfer are guaranteed by the blockchain.
The NFT Auction
The NFT auction took place on Rarible. A web3 site where you only need to connect a crypto wallet. Have some ETH? Great! Wrap it to wETH (wrapped ETH) and you are ready to bid. Suddenly the auction is open to the world.
Bidding was fierce between Rair.tech, a long-time fan of Dadara running a blockchain-based digital rights management platform, The Dogecoin Family.ETH, who via the Pak discord of Lost Poets found out about the nft Amsterdam event and Dadara and this project, and MHOUSE, who were represented inside the room by Def1nft and Kjakman.
During a bidding war that took place over two continents on the Ethereum network through the Rarible website, the price of the NFT quickly climbed to over 2 wETH which was around 3 times the price of the physical painting. The final price was 2.429 wrapped ETH, around $10,500 at the time of writing.
Interesting to note though that the final price of the painting (including VAT and auction costs) which sold officially for €3,208, was actually around €4,300 Euros. Indeed, there is something higher than Ethereum gas prices after all!
What Did We Learn?
Great artists produce great art and great art sells, regardless of the medium.
The NFT version is now already in use as an avatar on multiple platforms and Metaverse.
In some ways it is not surprising that the NFT sold for more than the physical piece. A borderless crypto marketplace allows anybody on the planet to bid. This accessibility and lack of friction will always have the advantage. Not to mention, instant payment to the artist as well as perpetual royalties from any future sales are guaranteed. For the buyer, they also benefit from immediate delivery and ownership. No trust, no shipping, no waiting. No VAT and no hidden fees!
Ironically for a global market, the NFT was won by an online bid from MHOUSE who were physically at the auction at the KochxBos gallery in Amsterdam. This seems poetic in a way, as from the outset Dadara wanted to play with the concepts of what is real and what is not, what is digital and what is physical. It seems fitting that MHOUSE bought the physical piece via Coderave in Spain and the digital piece via Kjakman and Def1nft in the Amsterdam gallery.
Macbeth said all the world is a stage. In the modern age, he might have said all the world is a simulation in the metaverse. Perhaps it is true and cutting edge artists such as Dadara are orchestrating its script.
All we really know is that sometimes, one great question is much more important than any answer.