A handful of auctions this month that tested the appetite for a type of investment known as NFTs seemed to prolong the emerging fad for owning works that only exist in the digital world. However, these transactions lacked the blue-chip collectors who typically boost sales in the art market.

Industry experts have seen a growing wedge between a new generation of digital speculators and an older school of art collectors who say their concerns about the quality, ownership, and authenticity of NFTs have remained unresolved, despite growing fears of legal challenges.

Over a dozen collectors surveyed for this item said NFTs pose copyright and other issues that sellers and buyers have not fully considered. “Absolutely none of my customers buy NFTs,” said Lisa Schiff, an art consultant in New York. “I have people who are curious, but we’re waiting for the dust to settle first.”

NFTs or non-fungible tokens have established themselves in music, art and sports, created and sold on marketplaces for crypto goods with names like Rarible and OpenSea or in collaboration with auction houses. Sotheby’s debuted earlier this month with a three-day auction of NFTs by anonymous artist Pak. A series of blockchain bids increased the total price for 6,150 minted NFTs to around $ 17 million, which were paid for through the Nifty Gateway digital platform using Ethereum cryptocurrency and credit cards. One work, a single gray pixel, sold for more than $ 1.35 million after a lengthy bidding war.

Phillips recently sold his first NFT by artist Michah Dowbak, who goes by the name Mad Dog Jones, for $ 4.1 million, including bonuses, to an anonymous bidder who is new to the auction house.

Those sales amounted to a drop in the bucket compared to Christie’s March sale of an NFT by artist Beeple for nearly $ 70 million. However, Max Moore, the Sotheby’s specialist who ran pak sales, argued that the mission was about “connecting with this new audience around NFTs.”

“They are primarily younger and more digital than other collectors,” he said. “We wanted to develop an understanding of what defines their tastes and collecting style.”

With more than 3,000 shoppers participating, Moore declared his experiment a success. But the hordes of traditional collectors who have defined the ups and downs of the contemporary art market have held back.

Some collectors questioned the idea of ​​owning art without exclusivity. “Why pay $ 69 million for something anyone can see online?” said Peter Kraus, chairman and chief executive officer of Aperture Investors, a New York consulting firm that collects with his wife, Jill, a trustee at the Museum of Modern Art. Their acquisitions include one of six existing versions of “The Clock,” Christian Marclay’s 24-hour video collage that features thousands of clips from films throughout history.

“Scarcity is worth something; It’s about owning something that you think is beautiful and that can’t be seen in any other house, ”added Kraus. “There has to be clarity about what you own as a collector.”

Belgian investment banker Alain Servais has acquired works by digital artists, including Rafaël Rozendaal, which are normally shown on the buyer’s websites. With NFTs, on the other hand, control of the work is usually decentralized through the blockchain, with a buyer receiving a digital receipt called a token – but the rest of the world can still watch.

Servais criticized NFTs for their “enormous unsolved copyright problems and security challenges” in the marketplace, citing two recent setbacks that highlight the uncertainties of NFTs for collectors.

The first happened earlier this month when popular artist Takashi Murakami, who rushed to adopt NFTs after the Beeple sale by posting a series of pixel works based on his signature smiley flowers, announced on Instagram that that he uses his NFTs for the time being in order to “further research the optimal format” and to ensure the “satisfaction and security of his collectors when owning the works”.

Analysts said Murakami may have been wise to take a moment to consider how NFT artwork might affect previous collectors of his paintings and sculptures. William Goetzmann, professor of finance and management studies at Yale University, said established artists should balance exposure and exclusivity.

“I see a risk for established artists who expose themselves to this new market in which the rules are not clear,” said Goetzmann. “If the prices of NFTs stumble at relatively low levels, it would discourage people from collecting your other works.”

Around the same time, the vulnerabilities of the NFT market were being tested by a hacker who operated under the pseudonym Monsieur Personne and produced a “second edition” of Beeple’s record sales work. The hacker registered the forgery with the blockchain as if Beeple had minted it himself. The NFT was listed on Rarible and OpenSea, both of which eventually disabled the posts.

Legal experts are quick to point out that copyright and fraud issues in the NFT market have not been examined in court, which poses an unknown risk for collectors.

“It’s the Wild West,” said Nelson M. Rosario, a Chicago intellectual property attorney who specializes in cryptocurrency exchanges. He added that NFT buyers are often given different rights to an image than they would expect from a traditional painting or sculpture. The international nature of blockchains, which often have nodes – the machines that validate information – around the world, also raised questions about whether countries would recognize the copyrights provided in the terms of an NFT sale.

“If you want a high level of trust, you have to pay way too many lawyers,” Rosario said. “Many NFTs are stored on the Ethereum blockchain, which has nodes in almost every jurisdiction on the planet.”

With the unclear area of ​​risk and the uncertain future of the marketplace, Servais fears that the digital artists he’s been collecting for years “might look like last year’s bad fashion trends” and could devalue their earlier work if they adopt NFTs.

He and other collectors also worry that the NFT is reliant on digital platforms that are still considered startups. Should these companies ever go away, the links to the NFTs they hosted might also go away. “If you put in an intermediary between you and the blockchain and the intermediary goes down, you’re in trouble,” Servais said.

Strangely enough, the artists don’t share these concerns. Rozendaal, who began his career in the early 2000s by turning websites into works of art and selling their domain names, now sees NFTs as the next logical step.

With NFTs, “the big draw is digital persistence,” he said in an email. He and others pointed to the disappearance of art created in the 1990s when earlier internet hosting systems became obsolete. Rozendaal said he no longer spent his days worrying about server maintenance and domain access by storing his works in non-verifiable tokens on the blockchain. It also helps that NFTs are imprinted incredibly quickly, only taking about 10 minutes.

He published four works in the last month and received nearly $ 360,000 worth of cryptocurrency for the best-selling piece “Deep Blue” – a far cry from the $ 10,000 he normally earns per work.

“The Inter is evolving and blockchain is the next step,” said the artist. “I can’t predict the future, but the way I see it now, I’ll be making NFTs for decades.”

Rozendaal did not collect any NFTs himself. So do many other artists who mint digital tokens but are careful about investing in what they admit could be a passing fad. And in such a new market, some collectors see the art offered through NFTs as too inferior to purchase.

“There is no challenge in NFT art,” said Pedro Barbosa, a Brazilian collector who is used to buying conceptual works of art that sometimes have no physical form.

“For example, the ideas that Pak explored have been around for over 100 years,” added Barbosa. “The geometric abstraction he sells has already been explored by artists such as Josef Albers, László Moholy-Nagy and Marcel Duchamp.”

However, some industry watchers argue that today’s Beeples may be tomorrow’s Warhols.

“I remember that my parents were fascinated when, with the advent of Pop Art, popular Lowbrow paintings were suddenly treated as art or collectibles,” said Professor Goetzmann. “We may see a similar phenomenon with NFTs – but it could be a bridge too far for people with collections in other media.”

In the meantime, artists and their dealers are marching forward with their plans to enter the new digital market.

Urs Fischer sold his first NFT earlier this month for $ 97,700. The pace will ease the artist’s future drops to the blockchain in May after its dealers at Gagosian Gallery declined to participate. Marc Glimcher, Pace’s managing director, said through a representative that he believed NFTs will stay here. The gallery plans to accept cryptocurrency for physical works of art in the fall and is working with other artists on future NFT collaborations.

Volta Art Fairs also has plans for NFTs in its programming. Kamiar Maleki, who runs the company, expects to be one of the first art fairs to display non-fungible tokens in a gallery that coincides with Art Basel in September.

“There is a sense that a parallel art market is emerging that includes a new group of artists and a new group of collectors,” said Tina Rivers Ryan, curator at Albright-Knox Art Gallery in Buffalo with expertise in digital art. “But the $ 69 million question is whether this will be another cycle of hype, like virtual reality was in 2016, or like net art before the dot-com bubble burst in 2001.”

Schiff, the art advisor, said the widening gap between the traditional art collector and new speculators of non-fungible tokens could be a good thing: NFTs could pull speculators away from the contemporary art market, where they are often criticized for getting their work done quickly resell a simple return on investment.

“It’s better for everyone if you can get speculators from physical art to NFTs,” she said. “You don’t have to lie. You don’t have to keep the art. They don’t get yelled at when they put it up for auction a few years later. It could be a great way for the market to settle down. “