Aug 6, 2022 - Economy & Business

Digital or physical art? Artist Damien Hirst experiments with NFTs

Data: NFT Price Floor; Chart: Axios Visuals

When given the choice between physical and digital art, people prefer the physical. That's the verdict from one of the more interesting NFT experiments, which came to its major inflection point last week.

How it works: UK artist Damien Hirst made 10,000 small (letter-sized) paintings on paper, in a series called The Currency. He then minted 10,000 NFTs, each one corresponding to one of the paintings, and sold 9,000 of them for $2,000 each.

  • The catch: The NFTs were freely tradable immediately, but after a year, the owners had to make a choice. Either "burn" the NFT in exchange for the physical artwork — or keep the NFT, in which case Hirst would set fire to the corresponding painting.

The verdict: Hirst decided to keep his NFTs and burn the corresponding paper works. After all, he already owns a huge amount of physical art by himself and others.

  • Of the other 9,000 NFTs, however, only 3,851 now remain. The rest were burned, exchanged for physical art. That's a 57% to 43% vote in favor of reality.

Why it matters: The NFTs are much easier to sell than the physical works — and, while they have fallen in value over the past year, they are still worth a lot more than the original $2,000 sale price.

  • Burning an NFT worth roughly $10,000 in order to get a physical painting is tantamount to buying the painting for $10,000. That's a lot of money for a small work on paper that's functionally identical to 5,148 other works, even if the piece of paper is signed by Damien Hirst.

The bottom line: The Currency seemed at first glance to be a kind of conceptual game, where participants were trying to anticipate whether the physical or digital artworks would be more valuable. In the end, however, I think people just chose whichever one they personally preferred to own. For most of them, that was something they could hang on their wall.

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