The keys to the NFT phenomenon and why it arrives in Spain with less force

File format NFT is one of the most fashionable topics today, not only in the sector of technology, but also in the art world. Astronomical figures have already been paid for one of these digital works ($ 69 million), but in Spain the arrival of the first auctions is being slower and more modest, with the first works sold in November, one of them for 20,000 euros.

NFT, short for non-fungible token, is a cryptographic technology based on 'blockchain'which represents something unique, non-replaceable, in a way that guarantees its authenticity, as well as who is its owner. They are normally bought in exchange for cryptocurrencies such as Ether, but unlike these they are not mutually exchangeable, that is, they are not fungible.

According to the Online Art Trade Report 2021 prepared by Hiscox, the works of art in NFT have had sales to date for a total value of 3,025 million euros and currently 14 percent of online art platforms already offer NFT and an additional 38 percent plan to do so soon.

Types of NFT

The rapid adoption of NFTs has been due to various factors, among them the ease with which they can be traded and the freedom it offers to artists, as it allows them sell your work directly, without intermediaries.

However, in addition to art, practically anything can be sold as NFT, and the investors in these types of assets. One of its most common uses is collecting in all its forms.

In July, British engineer Tim Berners-Lee sold the source code of the protocol for the world Wide Web - royalty-free and free - for $ 5.4 million.

Viral internet memes and videos have been another favorite category for NFT collectors. For the video 'Charlie bit my finger'came to pay $ 760,999, and its owner decided not to remove it from YouTube after acquiring it, while the' Disaster Girl 'meme sold for $ 500,000.

Sports are no exception to the NFT trend. The tennis player Andy Murray sold for $ 178,000 the moment he won the tournament Wimbledon in 2013. For its part, videogame from soccer fantasy Sorare has been using NFTs since 2019 to allow its users to exchange virtual player cards and create their own teams.

The current trend features crypto collectibles such as Crypto Punks, a collection of 10,000 characters randomly generated by a computer algorithm, all unique, of which the one considered rarest, the one numbered # 7253, was sold for 10.1 million euros. Other collections, such as Bored Ape Yacht Club, monkey avatars also generated by algorithms, they reached a total price of 255 million euros.

First milestones of the NFT

One of the milestones that has contributed the most to the popularity of the NFT format occurred in March 2021, in which it continues to be the highest amount paid for one of these cryptographic works: $ 69 million.

This astronomical figure was paid at an auction organized by the house Christie's for the work 'Everydays: the first 5000 days', by digital artist Beeple, nickname of Mike winkelmann. This 'collage' in JPG format is actually made up of 5,000 images, each one created daily for 13 and a half years by the artist.

Cases like Beeple are paradigmatic due to the large amounts that can be paid, but they also show the volatility of the NFT market, which still has margin for its evolution and settlement.

In this way, according to Hiscox data, in August the peak of NFT art transactions was reached with some estimated sales of 1,462 million euros. However, there was a 69 percent decline in transactions in September.

NFT in Spain: A backward sector?

In Spain, the first NFT auction was announced on September 23, with two works by the Zaragoza digital painter Jaime Sanjuán who was awarded on November 3 by the Fernando Durán auction house. Divino Tesoro and El Consejero, both from 2018, have been sold for 20,000 and 8,500 euros, respectively.

Although it only comes a few months after the first auction of a Christie's NFT, the big difference between quantities with which the first auction begins in Spain contrasts with the 69 million paid for Beeple's work.

The strength of NFTs can also be seen in Asian countries, such as China and India. In fact it was an Asian bidder, the 32-year-old Indian millionaire Vignesh sundaresan, who acquired 'Everydays' from Beeple, after making his fortune thanks to cryptocurrencies.

Regarding sales of art in general, including traditional works, the latest report from The Art Price, The Contemporary Art Report in 2021, establishes that NFT's market shares in Spain are below 1 percent of the total, compared to 5 percent internationally. This suggests that Spain arrives not only later but less enthusiastically to the NFT phenomenon compared to countries such as the United Kingdom and the United States.

"The American and British markets have led for many years the international sales of the market for traditional works and there is nothing to suggest that this dynamic could change in the short term with the market for digital works," he told Europa Press. Manuel Guerra, lawyer, art dealer and representative of Jaime Sanjuán.

Guerra, however, sees no reason that Spain is lagging behind in the NFT market. "I really think that Spain is not so late to the NFT art market," he considered, pointing to milestones such as the auction of Beeple at Christie's it took place only a few months before the first one in Spain.

Despite this, many of NFT's sales take place over the Internet, which means that companies differences between countries are blurred, and other elements come into play in the case of the works of art like the prestige of the artist or the work.

For his part, in the case of Sorare, no such delay is appreciated, driven by a sport so popular in this country such as soccer. "Spain is Sorare's sixth largest market. In terms of monthly active user participation, it represents 7% ", said Nicolás Julia, CEO and founder of Sorare, in statements to Europa Press.

These data show a booming market worldwide such as that of NFTs, growing despite certain inconsistencies and with first milestones that have attracted the attention of very diverse sectors. Spain is getting hooked on the NFT train with just a few months of difference with respect to USA or the Asian countries, but it remains to be seen if figures that overshadow them will be paid.