Crypto Artists Unlock Value With Lambos, Kitties and Blood
(Bloomberg) -- Last month, Michael Jackson, the venture capitalist and former Skype executive, spent $400,000 on a 10-foot-long neon sign consisting of 42 yellow letters and numbers that make up the blockchain contract address of a crypto-themed work of art called “Yellow Lambo.”
Artist Kevin Abosch conceived it as a symbol of success, a way to physically manifest the wealth a digital coin can represent. Jackson doesn’t know whether the work is, or ever will be, worth the money. And yet this Yellow Lambo went for more than many real Lamborghinis.
“Crypto assets -- they are so difficult to understand,” Jackson said. “A Lambo in real life is something the guys want to look up to. They are only doing it to show off, it symbolizes wealth. But a token -- no one can see it.”
Crytpocurrencies boast a market cap of $430 billion, leading people to question the actual worth of invisible assets unconnected to any traditional store of value. So while Bitcoin appreciated 14-fold last year, billionaire investor Warren Buffett is still calling the currency “rat poison squared.” Now artists are weighing in, raising their own questions about value, ownership and crypto’s underlying technology.
When JPMorgan Chase & Co. Chairman Jamie Dimon called crypto a “terrible store of value,” artist “cryptograffiti” responded with a piece with the same name. “Terrible Store of Value” is a portrait of a “disintegrating” Dimon -- “mirroring the public’s trust toward traditional banking institutions,” according to cryptograffiti’s website -- executed on a bank deposit box that’s connected to a Bitcoin wallet.
The piece sold for $33,000 at auction this year. More works will go up for bid May 12 in a charity art auction at the Ethereal Summit in Maspeth, New York.
Blockchain, the ledger technology underlying many cryptocurrencies, has “huge potential” and is attracting dozens of established artists, said Christiane Paul, director of the Sheila C. Johnson Design Center at the New School’s Parsons School of Design in New York.
“Artists have always been engaging with the latest technologies,” said Paul, who is also adjunct curator of digital art the Whitney Museum of American Art. “It’s important that artists capture a certain kind of moment in cultural and technological evolution.”
In June, the Whitney’s website will start showing a three-minute film by Jennifer and Kevin McCoy that offers clues to a Bitcoin address where the first 50 people can claim part-ownership of the piece, which the artists plan to donate to the museum. The owners will be able to resell their shares in the work, allowing other people to get their names associated with the piece -- in the museum world, donors typically can’t be added after the fact.
“This piece rips the existing infrastructure apart, and that to me was incredibly interesting,” Paul said.
Abosch, of the Yellow Lambo, has put himself into his work, selling more than 2.5 million tokens for as much as $10 a throw as part of his “IAMA Coin” project. Each IAMA coin represents a piece of the artist, he said.
“I imagined if I were a coin, how would I distribute myself to the masses?” Abosch said.
Using his own blood and a rubber stamp, he imprinted 100 physical artworks with the contract address on the Ethereum blockchain “corresponding to the creation” of 10 million virtual works titled “IAMA Coin.”
Abosch is also behind what may be the highest-priced crypto art sale. Ten buyers paid a total of $1 million for a blockchain-registered share of “The Forever Rose,” a digital photo of a flower. Starting May 24 at the State Hermitage Museum in St. Petersburg, he’ll exhibit canvas sacks imprinted with wallet addresses -- but without the private keys needed to unlock the wallets.
Online art dealers are also cashing in on the trend. Cryptoart.com, which sells limited-edition prints, saw sales more than double in the first quarter year-over-year, according to owner Troy Fearnow. Lynx Art Collection also offers physical artworks with crypto themes (“Bitcoin’s White Paper, On Wood!”).
“A lot of people were looking for ways to spend their cryptocurrencies,” Lynx co-founder Frank McKeever said. “They want something cool to buy that can also represent what they like and what they believe in. It’s our most popular category.”
Some items, costing between $80 and $900, have sold out within hours, McKeever said. He figures that as many as 10 percent of the 822,000 subscribers to Reddit’s Bitcoin page may be interested in something they can put on a wall, “and it can appreciate.”
McKeever is also partnering with Rare Bits, a marketplace for digital assets, to sell ownership to digitized artworks through tokens that go for $200 to $600.
Entrepreneurs are already using blockchain to verify the authenticity of artworks. And according to Bryce Bladon, communications manager at Axiom Zen, crypto could help resurrect the digital art market, which collapsed when the internet made it possible to endlessly reproduce and distribute files. Digital art could regain value if ownership is recorded on distributed ledgers, he said.
“There are serious problems with art that the blockchain could solve,” said Bladon, whose company makes the popular blockchain game CryptoKitties.
In CryptoKitties, players breed and trade virtual cats. There are about 700,000 different digital kitties, some of which have sold for more than $100,000. Guilherme Twardowski, art director at CryptoKitties, calls the game “procedural art.”
Crypto art got its start thanks to incentive-driven puzzles by figures including Marguerite deCourcelle, creator of “The Legend of Satoshi Nakamoto,” named for Bitcoin’s pseudonymous mastermind.
Three years ago, she posted a photo of the abstract oil pastel, which contained clues to unlocking about five Bitcoins. By the time a winner finally claimed the funds this February -- guessing that the flames on the painting’s border contained a code -- the Bitcoins were worth about $45,470. The winner called the puzzle “a breathtaking and dramatic experience.”
“It was exactly how I wanted it to be solved,” deCourcelle said. She hasn’t sold the actual painting, she said, though she’s received offers.
Just how much this art will appreciate in the coming years remains an open question.
“I’m no expert on Bitcoin but I’m a little wary of it,” Bob Banks, who offers art appraiser services, said in an email. “Limited-edition prints have gone down over the last 20-30 years and combining the two does not seem like a good combination to me. You will not find me investing in it.”
But many collectors are like Jackson, the buyer of Yellow Lambo: long-time crypto fans who admire the concepts but don’t dwell on long-term appreciation.
“It’s going to provoke a lot of questions, and I like that,” Jackson said.
Besides, he added, it will look great above his indoor pool in Luxembourg.
©2018 Bloomberg L.P.