What is crypto art? Digital file by Beeple sells for $69 million at Christie’s auction

The composite work was offered as a non-fungible token or NFT by the auction house

Everydays – The First 5000 Days, by artist Beeple, made history on March 11 by becoming the first virtual Non-Fungible Token (NFT) artwork to to be sold by a major auction house, for a staggering $69.4 million, snowballing from a starting bid of $100. Christie's reported that 22 million people tuned in "for the final moments of the historic sale".

The sale also catapulted the South Carolina artist (real name is Mike Winkelmann), into the category of the "top three most valuable living artists", said Christie's. Beeple places third after Jeff Koons and David Hockney. The latter's Portrait of an Artist painting sold for a little more than $90m in 2018, while Koons's Rabbit sculpture went for $91m in 2019.

Unlike the traditional mediums of choice of his contemporaries, however, Beeple chose to render - and sell - his artwork in the digital format. The work is made up of 5,000 drawings created over the past 13 years.

Every day since May 2007, Beeple produced a drawing – at first with pen and paper before eventually moving to software – and these images make up the composite artwork.

In February, Christie’s announced the online-only sale of the work, claiming that it is the first time a purely digital artwork would be offered by a major auction house. Christie’s also said that it would accept payments via the cryptocurrency Ether, another first.

The artist sold the work as non-fungible tokens or NFTs, which are digital certificates that authenticate ownership through blockchain technology. NFTs can come in the form of drawings, music, video or other digital media, even tweets, memes, online articles or podcasts.

The NFT exists on the blockchain, where it cannot be copied or manipulated.

Since they are verified with a digital signature, NFTs offer the advantage of easier authentication important to the art world. NFTs also enable a digital work to be tagged, in a sense, as an original, which adds value to a medium that can be easily copied and duplicated.

Before the sale, Christie’s detailed what the buyer - who as yet remains unknown - can expect.

"The buyer receives the artwork file containing a digital signature from the artist and all vital details including time of creation, edition size and a record of any prior sales. These details are permanently attached to the artwork, providing an enduring guarantee of value.”

Prior to the Christie’s auction, Beeple wasn’t well-known in the art world, although he has produced concert animations and visuals for celebrity clients and maintains a large following online, with 1.8 million followers on Instagram and 200,000 on Twitter.

In December, a number of his artworks were sold at a different auction for up to $100,000 each. Overall, the artist made $3.5 million in a single weekend.

His artworks are oftentimes dark and absurd, with visuals that look as though they exist in a video game or dystopian sci-fi film. He transforms recognisable characters from pop culture and film, such as Buzz Lightyear in Toy Story, for example, and places them in fantastical worlds.

His subjects can be political, too, as in his NFT piece Crossroad, a digital video that features a naked Donald Trump lying face down on the grass as people walk past him. In February, the work was resold on the secondary market for $6.6m through the website Nifty Gateway.

Typically, when an artwork is resold by a buyer for quick profit – an act also known as “flipping” – the artist does not earn anything from the jump in price. NFTs may be able to change that. In Beeple’s case, his contract outlines that he receives 10 per cent of every sale on the secondary market.

In a statement released by Christie’s before the auction, the artist wrote: “I think this is a truly historic moment not just for digital art, but for the entire fine art world. The technology is now at a place with the blockchain to be able to prove ownership and have true scarcity with digital artwork so I think we are going to see an explosion of not only new artwork, but also new collectors and I am very honoured to be a part of this movement.”

Beeple is not the only individual using NFTs to sell their works. Musician Grimes sold her digital animations and artworks, WarNymph Collection Vol 1, on Nifty Gateway this month. It sold out within 20 minutes for about $6m. The band Kings of Leon are also releasing their new album as an NFT.

The result of the Everydays auction is a game changer for an art market that is eager to expand in the digital realm.