August 12, 2022

Sotheby’s joins the non-fungible token craze by collaborating with digital artist Pak.

“We’ve been following the NFT space for a while,” said Charles Stewart, CEO of Sotheby’s, on CNBC’s Squawk Box on Tuesday, where he announced the auction house’s partnership with Pak. The upcoming sale is slated to start next month.

“This is new to all of us,” added Stewart. “But there is a lot here that is really exciting and we think it’s enduring.”

Pak has been producing digital art for decades, but the artist’s identity is unknown.

“The artist prefers to remain anonymous, partly because the artist wants it to be about the art, which is not necessarily new in the art world,” said Stewart. “But it’s one of the many new things about crypto art that I think is different and possibly a little disruptive, for sure when you compare it to the traditional art world.”

The decision by Sotheby’s – founded in 1744 and known for selling multi-million dollar paintings and other luxury items – to use NFTs marks the latest milestone in the burgeoning digital art form. It comes after Christie’s auctioned off an NFT collage for $ 69 million last week, making its creator, Beeple, whose real name is Mike Winkelmann, a spot among the top three most valuable living artists.

NFTs are blockchain-based assets that are unique by design. A scarcity that proponents say supports its worth. Ownership of a particular NFT is recorded on a blockchain network, the distributed digital ledgers that support cryptocurrencies like Bitcoin.

In addition to digital artwork, basketball highlights known as NBA top shots have become popular as NFTs. Earlier this month, the rock band Kings of Leon released their latest album in the form of an NFT.

Some have dismissed NFTs as a fad, the levels of which will decline over time. Skeptics also note that the rise of NFTs coincided with a massive rally in cryptocurrencies like Bitcoin, notorious for its volatility, and Ether, which runs on Ethereum’s blockchain network.

The buyer of Winkelmann’s NFT worth 69 million US dollars was the pseudonymous crypto investor Metakovan.

Winkelmann said he sees a number of uses for the digital infrastructure that underlie NFTs. “I really think this is a technology that has only so many use cases,” he told CNBC on Friday, calling it “a blank board, even beyond digital art.” He added, “Every time you want to prove possession there is a use case there.”

But even for NFT-based digital art, it’s “very early, of course,” according to Sotheby’s Stewart.

For its Pak partnership, New York-based Sotheby’s will sell both one-off pieces of digital art and “so-called open editions” in the NFT world, where many people can buy tokens for the same work, “said Stewart.

NFTs bring new interest and a “new aesthetic” to the arts, Stewart said, claiming there is the potential to “bypass many of the traditional gatekeepers and verification processes of the physical art world.” He added, “This is something really exciting and as it develops we are very excited to see where this all leads us.”

Benoit Pagotto – co-founder of RTFKT who helped create a collection of recently sold digital NFT-based sneakers – told CNBC that he anticipates it will take some people some time to fully grasp the craze for crypto collectibles .

“We have to educate the people and bring them up to date,” said Pagotto on Tuesday in the “Squawk Alley”. “But at the same time we know that people will never understand [NFTs]Just like today, there are still people who don’t understand why the sport is so strong and such a cultural movement. With these people we’re not going to spend too much time explaining. “

– CNBC’s Jessica Bursztynsky contributed to this report.