Role of Bitcoin in the Artistic EcosystemJuly 7, 2020
There are two sides of bitcoin, as well as any other digital currencies, that are important for the ecosystem of the arts. On one hand, bitcoin represents money. Thanks to that, it can take its part in the wider art marketplace. With its use, artists can sell their creations to a new audience and easier than ever before, with fewer intermediary entities than ever before.
However, bitcoin also presents an aspect of blockchain technology which can also be used in a range of different art projects on its own. Here, the non-fungible tokens or NFTs are possibly the best examples of that potential. However, these two aspects also showcase a world of interchangeable and overlapping opportunities, so essential for anyone willing to push the boundaries of not only their art but also the financial and economic setup in which it – like any art since the dawn of time – exists as well.
All of that makes bitcoin not only an interesting plaything that comes with embedded media and attention but also something that can be a game-changer – sometimes very literal – for artists and collectives working in the contemporary and global environment.
Hip Hop Artists
Oddly enough, it was not video games or digital art that was at the forefront of the use of bitcoin in art – it was rap and hip hop artists. Years ago, names like 50 Cents began selling their albums for this digital currency, right in the time period when most considered BTC tokens an elaborate joke.
However, the money generated through the same effort amounted often to substantial sums. In many ways, they could have been the showcase of how to do things, but the message still did not reverberate with many. Today, fortunately, there seems to be a gradual change happening in the wider world of global art.
NFTs-Based Video Games
In many ways, even though the academic circles might lag behind, the rest of the world is presently more than aware that video games are art. If nothing else, then their influence in the financial sense of the entire entertainment industry should be clear enough. With esports, regular single-player games, social games, massive multiplayer titles and so much more, the entire video game industry overcame the global movie business some time ago.
Also, its relevance and complexity continue to grow as well. That is why blockchain and NFTs are no strangers, even now, to the video game offer, both from a business perspective and artistically. Blockade Games, for example, already sold over 160,000 USD worth of crypto assets. Most of these come from its first game called Neon District. The money was exchanged by players and collectors for over 850,000 individual assets on the game’s blockchain. The number will soon cross the one million mark. But this is just the top of the NFT iceberg.
The first wave of decentralized applications working on blockchain technology broke out in 2017. Since then, these and their NFTs have managed to earn over 20 million USD through trading. Startup companies that operate them earned over 13.6 million USD through the sale of digital assets. Of course, like always, the picture here is not ideal. Most of that money came about in the first year of trading.
This is primarily thanks to game CryptoKitties which was a big trend that season and at one point had over 14,000 users. But, even when the trendy madness went away, games like My Crypto Heroes or Gods Unchained still managed to generate revenue in millions of USD through the sale of digital assets. Now, what would have been once seen as playful ventures that are more akin to experiments than actual businesses proved their worth. All of them are not just an artistic venture but a fully-developed and running business.
The critics of the NFTs potential and future showcase often their main argument – the domain, even after some growth and adding that which will come in the future, is still very small and niche-oriented. For them, it is nothing more than a tool for a large group of friends who are simply shuffling digital items around for real money, but never pooling in huge resources, like in the case of online gambling for example, which is constantly pulling in new liquidity.
However, the same argument can be made for the entire cryptocurrency domain. In May 2020 it was estimated that about 2.1 percent of bitcoin wallets make up around 95 percent of the BTC circulation. Almost any domain will mirror this pattern to a degree, but this does not make it flawed in any way. Still, the true thing is that cryptocurrency as a broader ecosystem demands diversification. That applies to the use of cryptocurrencies for art and as art.
Individual Creators of Content
Bitcoin can play a role for individual content creators as well. This is clearly related to artists, but also anyone else who is pushing out any kind of content – especially digital one – to the global audience. Here, however, the problem is in the creators themselves. While many YouTubers have their Patreon accounts ready and set up, almost all of those are not using any kind of cryptocurrency wallet.
Here, even the small number of their fans who do use cryptocurrencies cannot use it to support their efforts or purchase things from them. This again pivots back to the issue of user acquisition. While people are more keen to get into cryptocurrencies than ever before, they are not able to do so on a mass scale because the entire process still seems overwhelming.
This creates an enchanted spiral that keeps falling into itself and blocking more people from becoming more engaged with this digital currency. That is why it is the responsibility of each individual artist to open up new potential revenue streams for them, even if they are minuscule. Despite their small present potential, they require no further engagement once the wallet is set up and the same stream can potentially grow bigger over time. Also, the very act of making the wallet will support that wider growth.