Sotheby’s, the world’s oldest auction house, is sending its CEO to Barcelona as a keynote speaker and suddenly the world feels a little bit weirder.
The reason is simple, on the face of it.
Sotheby’s is pioneering the sale of NFTs at auction.
CEO Charles Stewart, who came from a telecoms background – Altice USA – and whose owner Patrick Drahi bought Sotheby’s a few years ago, sees the merging and blurring of the digital world with the physical one as the future. And Sotheby’s has already sold $100 million of NFTs in less than a year.
For one thing, the whole demographic of the auction world has suddenly changed. Before auctions went online, 500 rich people would show up to bid in person. Now a million people might tune in to watch an NFT fetch millions of dollars. And the average age of bidders dropped by about 20 years.
Sotheby’s is betting substantially on the success of this venture. It invested heavily in an NFT platform and has its own marketplace.
Yet NFTs have a long way to go before they are proven to have any actual value.
In fact, the rise of NFTs have triggered some very negative reactions.
Caleb Scharf, a professor of astrobiology at the Columbia University believes that NFTs are ‘comically bereft of anything that we would associate with cultural or social value,’ while pointing out that the last thing the planet needs right now is a reason to put more pressure on the blockchains on which NFTs will be bought and sold, mainly by Sotheby’s.
The energy consumption of blockchains is about the same as Sweden.
Scharf is pretty critical of our ability to take anything – a pebble in his example – and persuade others that it has more value than other pebbles, thus triggering a welter of communities, critics, evangelists, marketplaces, auctions, speculators, investors and assorted shady characters.
Other critics are independent artists themselves, the group that NFTs are meant to benefit. Many NFTs are stolen, hacking is frequent, many others only fetch a couple of hundred dollars and artists are up in arms. One artist said that ‘every artist I know is getting their work jacked.’
NFT ownership is a cesspit for copyright law, it is open to ridicule, harassment and it is just too easy to ‘right click and save as’ to get your hands on one. And you only have to add some random feature to one to make it different and therefore undermine the value of the real one.
Sotheby’s is taking an enormous risk by pioneering the sale of NFTs, and not just financially. It is putting its 277 year old reputation on the line. How much is that worth?