Please note: Some of the content on this page was published prior to the launch of Creative Australia and references the Australia Council. Read more.

Beyond the bubble: the future of NFTs

As part of our evolving Digital Culture Strategy, we are sharing a series of case studies profiling how leading practitioners are embracing digital platforms and mindsets to make innovative new work and build connections with audiences.

When Musician and producer Flume (aka Harley Streten), with long-time collaborator visual artist Jonathan Zawada released their first NFT, a 90-second video work called Saccade featuring a multi-coloured eye, it made $66,000. “Ridiculous” they described it at the time, yet it is far from the multi-million dollar sales artists like Beeple and Grimes have made.

Musician and producer Flume aka Harley Streten, with long-time collaborator visual artist Jonathan Zawada released their NFTs right in the middle of it. Their first NFT, a 90-second video work called Saccade featuring a multi-coloured eye, made $66,000. “Ridiculous” they described it at the time, yet it is far from the multi-million dollar sales artists like Beeple and Grimes have made.

NFTs or ‘non-fungible tokens’ monetise the exchange of digital artwork online using cryptocurrency. A token is essentially a specific set of numbers, generated through intensive computation powered by huge amounts of electricity. These numbers can then be used as a kind of certificate or proof of exchange of a particular version of a digital artwork between a buyer and a seller.

Despite misconceptions, if you buy an NFT you don’t actually own the work. The copyright doesn’t change hands, nor do the rights to reproduce it. But you can resell your token (requiring more computational power), a percentage of which is returned to the artist.

For Jonathan, as an artist and designer who has worked extensively across the music and arts industries making everything from album covers to live show projections, the Flume collaboration wasn’t his first NFT.

“I found myself getting approached a lot about them from around August last year,” Jonathan says. “But I never really liked crypto or wanted to be involved.”

“Humanity spent hundreds of years getting to the point where we could liberate information and it was no longer exclusively tied to being rarified,” he said. “You could duplicate it an infinite number of times, so it’s a weird turn we’ve taken in that history, that just exemplifies the lack of creative vision around economics that we have. It’s like we tried for 20 years, we couldn’t come up with a different way to do things so we’ll just go back.”

It was mainly curiosity that made Jonathan change his mind (before seemingly changing it back) – NFTs seemed to offer an outlet for the kind of collaborative experimental practice that he already shared with the musicians he works with.

“I began to feel like there was a lot of opportunity there and that NFTs might give us ways to solve the kinds of problems I had had over recent years,” he said. “I’d been making this kind of work anyway, but to exhibit it, I would have to find like six TV screens and video players, and often galleries didn’t want to do that. Nobody would want to buy it, so it didn’t exist as art in the same way the paintings did. For me they were just as important as each other. It felt like that was potentially fixed by NFTs.”

NFTs seemed to offer a new way of operating beyond the standard management structures of the art and music world. They do of course come with their own boundaries and rules set by NFT platforms who charge sometimes considerably, for every sale. However, the rise of NFTs has also raised a number of a number of ethical issues and considerations. Many people have raised concerns about the environmental impact of NFTs.

And then there was, of course, that other factor – the COVID-19 pandemic, without which the NFT boom may not have occurred, or at least, not in the same way.

“COVID has been devastating not just for artists but the teams that surround them as well, from the live show crew, to agents and publicists,” says Harry White of Future Classic, Flume’s label. “We were pretty lucky in a lot of ways, but the effects trickled down across the whole industry. We’ve had to pivot to find other ways to have music connect and create those moments.”

“I know that NFTs literally paid the rent for many artists last year. People being stuck at home and looking for novel experiences certainly had an effect on the crypto valuation,” Jonathan also adds. “When things are uncertain people are quite open to new financial mechanisms, and they then tend to slide back into normal.”

But for Jonathan the experience of releasing NFTs with Flume quickly turned from novel to something else, generating a considerable backlash from Flume fans.

“The expectation was that for NFTs to be considered successful, they had to make a lot of money – that just crippled me and my interest in it evaporated,” he said. “Nobody was looking at NFTs and evaluating them as works of art. The focus wasn’t on the work, it was on the money.”

So they experimented with an NFT swap, offering a set of theirs in exchange for other works by lesser known artists.

“That seemed like a better way to foster a bit more of a community around it. Some kid who is just making things could swap theirs with us. The power dynamic is changed by that process.”

“Then we started getting fans asking us what we were doing to help them resell their NFTs, that made me feel like there were these 18-year-old kids who think that it’s an investment vehicle and that they should be able to make a profit in a few weeks. It was terrifying. And then there was the environmental aspect.”And that’s the near-extinct elephant in the room. The computation that NFTs demand is responsible for millions of tons of carbon dioxide emissions generated annually by the cryptocurrencies used to exchange them.

Both Harry and Jonathan acknowledge the impact of this, but position it within a spectrum of impact the industry already has – from touring, to record and merchandise production.

“In some ways these ethical questions aren’t new, and artists are in an amazing position to lead these conversations and push for genuine change,” Harry says.

So will they make NFTs again?

“I don’t know,” says Jonathan.

“We’re certainly open to new ways of it being integrated,” Harry says. “Every show you might go to in the years to come might have NFTs for sale that you can only buy at that particular merch booth.”

Ultimately the future of NFT artworks may come down to a set of complex choices about what we can afford to do and what we can’t – or as some artists are currently seeing it, what they can’t afford not to do.

An earlier version of this article did not accurately represent concerns around the environmental impact of NFTs. It has now been updated.

Image: Harley Streten and Jonathan Zawada

Video: Saccade, Flume x Jonathan Zawada, 2021

In response to our Digital Culture Strategy, we have launched a four-year Digital Culture Program to develop practice, share knowledge and invest in innovation. Applications are now open for a range of professional development opportunities and we will be announcing new programs and opportunities regularly over the next twelve months.