Non Fungible Tokens and Art Forgeries


 

Have you ever stopped and wondered if that shiny new Non Fungible Token is worth it? Not,  "Will that shiny new NFT will make money?", nor, "Is that shiny new NFT a good investment?" but "Is it worth it?". The question of value for an NFT has two parts. The first is the part about the exchange of the Token. Despite not being "fungible" in the very narrow sense of the word, an NFT can be exchanged. When that exchange takes place there is a parallel exchange of a Fungible Token. For an Non Fungible Token, that Fungible Token is the subject of the questions "Will that shiny new NFT make money?" or, to a lesser extent, "Is that shiny new NFT a good investment?" The reality is, when considering the value of an NFT, very little consideration is given to the Non Financial Value of the Token.

The reality of NFTs is that they can be simply a vehicle for a pump and dump of some other token. This wild claim can be illustrated by the use of some examples from the Art World.

Tom Keating died in 1984 and faked more than 2,000 paintings by more than 100 different artists, including Rembrandt. Keating, a British art restorer,  declared that his counterfeits to be motivated by socialist politics not financial gain. He wrote a book - "The Fake’s Progress": 

“It seemed disgraceful to me how many [artists] had died in poverty. All their lives they had been exploited by unscrupulous dealers and then, as if to dishonor their memory, these same dealers continued to exploit them in death.”

For Keating, faking was an attack on the gallery system, intended to fool the experts, and break the industry.

The Times accused him, in 1970, and Keating confessed to his forgeries. Arrested in 1979 with his former lover and accomplice Jane Kelly, Keating had the charges dropped after a near fatal motorcycle accident.  Keating’s works still sell for thousands of pounds. In  2005, The Guardian reported counterfeits of Keatings forgeries were selling between £5,000 and £10,000.

That, in a nutshell, highlights the problem of value in NTFs. Keating Originals were forgeries of Rembrant Originals and yet, after a while, Keating Originals were endowed with enough intangible value, in the same way as the Rembrant Originals, to rise in money value and then, further, the existence of value for Keating Originals led to Keating Forgeries - not quite worth the same as Rembrant Originals but worth more than they would have been had they been forgeries of an unnamed forger.

The key idea is provenance.

Unlike a straightforward cryptocurrency such as Bitcoin, NFTs do not consist of transaction and proof of transaction. There is more to an NFT than a record of transaction. In a sense, Bitcoin is a Rembrant and an NFT is a genuine Keating. The Keating is irrelevant without the Rembrant. A forger can only forge working from a genuine article. A forger of forgeries, however, use a forgery as their original. The problem is not only determining if the forgery is a Keating but if it is a Keating intended to be a Rembrant and not a Forgery of a Keating. There are three layers of skills involved: Rembrant from life; Keating from Rembrant; Anonymous Forger from Keating from Rembrant. Knowing the chain of custody of those skills is part of what the NFT is about. The Blockchain Ledger gives the chain of custody in relation to the underlying transactions for which fungible tokens are exchanged but it does not give any sense of provenance.

The Blockchain Ledger adds something here: it can give a chain of ownership that tracks back to the original minting of the NFT. That original minting is, the Keating of a Rembrant. Each exchange of NFT that subsequently takes place has the danger of being a secondary forger. Why is the Minting not the Rembrant: because the Rembrant is the Original Digital Asset. The Original Digital Asset that someone, somewhere, has decided has value. Given the description of Rembrant and Keating, that decision that value exists is about something other than fungibility. Make no mistake, there is an exchange value for the NFT, but that exchange value - that fungible value - is effectively negotiable. Thus there is no direct one to one relationship between an NFT and a Bitcoin value. Indeed the NFT might be valued at a single Bitcoin but a billion DOGE and a thousand etherium. The reality of the NFT is that the value most often resides in the holder of the NFT.

Which returns to provenance.

Would you prefer a real Rembrant, a Keating or a copy of a Keating: there are genuine reasons for prefering each one. A Rembrant might well be utterly desirable but a Keating might give you the feeling of having the Rembrant without the insurance headache - simply holding on to a physical Rembrant is often not possible because insurers have demands about security. Which is one of the things that the Blockchain does do: it gives a secure narrative of who has owned the NFT and so who has taken advantage of the perception of value. In essence, the Blockchain gives a provenance. The Blockchain documents who has been engaged by the NFT to such an extent that they would want to be associated with it. An NFT is not simply about exchanging fungible tokens but about the exchange of reputations. Which is a subject of much interest to anthropologists such as Marcel Mauss who wrote about the practices of "gift giving".

Gift giving is not about obtaining something free but of obtaining something that comes with an obligation. The obligation of any NFT is that provenance. For a Keating forgery, the exchange is between Keating and Rembrant but also between Keating and the purchaser of the forgery. The exchange between Keating and Rembrant, in the normal course of events, was hidden. The purchaser of the forgery was intended to be duped. Yet, the Forger of the Keating Forger needs the exchange between Keating and Rembrant to be clear and obvious but the exchange between Keating and the Keating Forger to be obscure. It is this complex system of changes in relations which holds the provenance of the NFT.

In short, an NFT without reputable owners is, in fact, nothing more than a pale imitation of a Rembrant. Not even a Keating. The NFT without reputable owners is a dead NFT. An NFT that, as Keating says:

"All their lives they had been exploited by unscrupulous dealers and then, as if to dishonor their memory, these same dealers continued to exploit them in death."

And that does mean that there is an argument to be made that the underlying and fungible token should be enhanced by an NFT or else that NFT devalues itself and any other NFTs connected to the fungible token. Because: the provenance of a bad NFT is just as visible as the provenance of a good NFT.

 

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Hubert Huzzah
Hubert Huzzah

An ongoing manifestation of Thee Surrealerpool Collage of Alchymical, Flâneurial and ’Pataphysical Studies. An Institutuion with membership by invitation, coercion and accident only. Hawkers, Traders and Carlists not welcome except by exception.


Derek has given up Time Travel.
Derek has given up Time Travel.

Derek has given up Time Travels for reasons of practical expedience and to devote more time to a particularly important project. Episode #1 of an intermittent series on Surrealism, Technology, and Science.

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