A little over a year ago, after I finally finished doing my own research (just kidding, that process never really ends …), I reached the conclusion that if anything in the world of “crypto” / “blockchain” / “distributed ledger technology” was going to change the world and make it a better place … it was going to be Bitcoin. This was around the same time I decided to dive back into my passion for artwork, and I set out to become a “Bitcoin artist,” which, in my mind, meant creating artwork that promotes Bitcoin and inspires others to learn more about it.
From day one of this art journey I have wanted to find ways to incorporate Bitcoin into my work — not just Bitcoin logos or symbols like the honey badger, but aspects of Bitcoin’s technology stack itself. In the past I’ve embedded Opendimes into my work and as I write this, the fluorescent orange paint is drying on a piece I’ll be debuting at the Bitcoin 2020 Conference that features a Bitcoin node from CasaHodl. You might think it’s gimmicky, but I’m nerding out pretty hard on the idea that I can self-custody bitcoin and confirm transactions using a node embedded in an actual work of art.
And yet I have to confess I would be lying if I didn’t admit to feeling some FOMO when I look at the burgeoning community of artists creating and tokenizing art on platforms like Ethereum.
Here for the Monetary Maximalism
Around the time I dove back into art, I also decided that my works would be Bitcoin only. I swore to myself I would never tokenize on Ethereum or any other blockchain so long as I still believed in the promise and viability of Bitcoin.
This wasn’t a dogmatic decision based on a “Bitcoin or bust” mentality, but rather on the premise that if I was going to tokenize my artwork, whether physical or digital, I wanted to do so on the chain with the highest level of security, censorship resistance, decentralization and potential longevity — and in my opinion, this remains Bitcoin.
Another point I should mention, is that at the end of the day, I’m here for monetary maximalism. I’m not doing what I do to get rich or help further a revolution in the art world, but to help onboard people into a future built on sound money, on Bitcoin. Said another way, I don’t make Bitcoin art to make money. I make money so that I can make Bitcoin art.
So as a Bitcoiner, NFTs are secondary to my goals, but as an artist I do find their potential exciting. NFTs are non-fungible tokens, best understood as tokens that can be differentiated from one another. In theory at least, a bitcoin is the same as any other bitcoin, but NFTs are different from one another and they can be issued in various ways. For example, an artist could issue a 1/1 token or a set of 21 tokens, all of the same type. If a collector purchases a 1/1 token, for example, she or he might do so because of the inherent guarantee that the token is unique. It is verifiably rarer than a token that is 1 out of a set of 21, and thus might be more desirable and fetch a higher price.
Really though, the ways in which NFTs are being issued and utilized by artists is still being figured out. Artists are experimenting, finding out through trial and error, what works and what doesn’t, and there is no right way to do it. If I create a digital painting, I could issue a “first edition” 1/1 token. I could then decide to issue a “second edition” of the same exact digital painting, but issue a set of 21 (or any other number) tokens and sell them cheaper than the first edition.
A strategy like this would accomplish a number of things: It would allow for additional income for me as the artist; it would allow for more collectors to own a piece of my art; and it would also preserve the rarity of the first edition I’d already issued, ensuring that I don’t upset my first collector by “double-spending” my artwork. The ways in which artists utilize NFTs is really only limited by our imaginations.
When it comes to using NFTs to represent ownership in a work of physical art (as opposed to the NFT being the art itself, i.e., art that is natively digital), I see NFTs as merely an improvement on using a piece of paper to signify ownership. And while I understand the novelty and cool factor of creating and collecting verifiably rare, digitally native artwork, many of the existing frameworks for NFTs are still dependent on less-than-ideal solutions. Issues, like linking on-chain assets (the NFTs) to off-chain visual assets (the artwork), have yet to be fully solved, even on Ethereum and other NFT-capable blockchains that have more NFT activity than Bitcoin and arguably better user experiences (for the time being).
It is also important to note that some projects do store digital assets on-chain, but even for those that do, I don’t see how this could be a viable long-term solution when dealing with public blockchains that have limited and valuable block space.
Read more: Op Ed: How Tokenization Is Putting Real-World Assets On Blockchains
Is Ethereum Eating Bitcoin’s Lunch?
Will I have to just wait and watch as Ethereum eats Bitcoin’s lunch with regards to NFTs and artwork? Is the future of tokenized, verifiably rare artwork destined to exist separate and apart from Bitcoin?
My answer is tinged with a dash of hopium to be sure, but I believe the answer is a resounding no. Put this in your list of predictions to revisit in a couple of years, but I firmly believe that what we’ve seen so far with NFTs and art is merely the opening act — and a boring one at that.
Okay, not entirely boring. As an artist, it’s pretty freaking awesome to see developers, artists and collectors innovating and interacting in a decentralized fashion, building an art market ecosystem where none existed before. But I would be far more excited if this were happening on Bitcoin.
So how do we change things and make sure that happens? Before I get into what we as artists and collectors need, I want to talk a little bit about where art NFTs and Bitcoin stand today. Please note that I am new to issuing NFTs on Bitcoin and thus am by no means an expert, not even close…
Wait a Second … NFTs on Bitcoin? They Exist?
Yep, they do — they just don’t have ICO money or a foundation to promote them and fund development. And what’s more, Bitcoin NFTs have existed for a while now, thanks to the Counterparty Protocol. In fact, Bitcoin NFTs existed before the launch of Ethereum itself!
If you’d like to learn about one of the earliest, best known, and oft misunderstood things to come out of CP, I’d highly recommend watching this video about RarePepes.
For more details on how Counterparty itself works, there is a pretty good FAQ, but in short, the protocol “extends Bitcoin’s functionality by ‘writing in the margins’ of regular Bitcoin transactions … allowing users to create and trade any kind of digital token … and to [w]rite specific digital agreements, or programs known as smart contracts, and execute them on the Bitcoin blockchain.”
It’s also important to note that Counterparty does have its own native token, XCP, but due to the unique nature of its creation and usage in the Counterparty ecosystem, I would hazard a guess that its existence doesn’t ruffle too many feathers in the hardline maximalist community.
Much like Bitcoin, Counterparty is open-source and completely community driven. But therein lies a potential problem because without enough community support, any project — no matter how well thought-out or designed — can fade into obscurity. This was the case with Colored Coins, an earlier attempt at bringing more functionality to Bitcoin that is now more of a historical footnote than anything else, though still worth lauding and mentioning.
Counterparty today is still around, people are using it (I created my first artist token just the other day!), and development is still ongoing. But to be perfectly honest there is a lot of room for improvement, and if you take a look at the Counterparty block explorer, you can quickly see that activity is intermittent at best. I am admittedly very new to the Counterparty community, so maybe I’m not looking in the right places, but it feels very fringe and very small and frankly, if nothing changes, on a precipice of stagnation. But there is no guarantee of what the future holds, and that is why I am sharing my thoughts with you. Because that future rests in our hands.
Improving on the Bitcoin NFT Experience
Before I get into what’s needed, I think it’s also important to ask whether artists and collectors actually want to utilize Bitcoin for art-related applications. A related question to ask is whether those tokenizing or collecting artwork on other chains are in fact loyal to those chains.
I can’t provide detailed analytics on this unfortunately, but I think I am plugged in to the Bitcoin and crypto art scenes enough to speak anecdotally of what I’m hearing from some of my fellow artists. From what I’ve seen and conversations I’ve had, many artists are simply using the NFT platforms that make the most sense for right now.
In one such discussion, Josie Bellini, wrote:
A majority of my art is Bitcoin related and I would love to have it tokenized on BTC. I have spoken to my collectors about sending me their “Josie” NFTs so that I could burn them and reissue them on Bitcoin in some fashion. Though the process would be quite manual, most of my collectors are excited about this idea. The BTC NFT infrastructure would need to be solid before I made a move like this. I do think that BTC NFTs would bring new people into the space that have avoided NFTs on ETH.
There are also those who use non-Bitcoin NFTs, in the meantime, for propaganda purposes. Bitcoin artist, Lucho Poletti, a good friend and a Bitcoiner through and through, has been tokenizing Bitcoin-focused digital artwork on Ethereum for a while now. He does so to make money of course and to spread the Bitcoin gospel among Ethereum users.
Some artists simply don’t know about the options that do exist on Bitcoin. Literally as I write this, another artist, Yonat Vaks, just joined the telegram group I mentioned earlier. She was in a position similar to the one I was in, unsure where to start and curious to learn more.
Artists do want to use Bitcoin for their artwork, and of course some are already doing so, but if we want to create a future in which Bitcoin NFTs are the standard, then things need to change. There are obstacles that need to be overcome, and artists’ and collectors’ needs that need to be addressed. And this isn’t a matter of waiting around for it to just magically happen.
Bitcoin and Art: An Opportunity Waiting to Be Seized
Artists and collectors, myself included, need to be more vocal about what they need and want by engaging in the public discourse. And at the risk of pissing off artists and developers alike, we all need to put ourselves into each others’ shoes. More artists need to learn to code, and more developers need to pick up a paintbrush. And of course, code can also be art, but the reality is, if artists wait around for others to create the things they need, then either it won’t get done, or it won’t get done as well as it could have been.
I mentioned earlier that Bitcoin NFTs are on a precipice of stagnation, but I think it’s better to think of the current situation as an opportunity waiting to be seized. The reason for this being that when it comes to NFTs, there is no standard. There is no perfect platform. Not yet.
A great opportunity still exists in further developing NFTs and how people interact with them. Artists and collectors alike need better UI/UX. This goes for issuing NFTs as well as viewing them and even displaying them in meatspace. We also need more control over things like royalties. Artist Chiefmonkey writes,
I would like the option to have 10% of all future resales … some may ask for higher some lower like 1% … a standard/common figure will come about naturally.
I’ve had innumerable conversations with other artists about what’s left to be desired with NFTs, and my point here is this: Because there is still so much uncertainty around where NFTs are going, the possibility that Bitcoin could eat Ethereum’s lunch is just as valid as the opposite possibility.
NFTs: Beginning and Ending With Bitcoin
Development on Bitcoin is at an exciting stage right now. The Lightning Network is enabling all sorts of new experimentation into what is possible, and Blockstream’s Liquid Network could prove equally as exciting. Bitcoin Magazine reporter, Vlad Costea, did some great coverage on the RGB project from Giacomo Zucco and Alekos Filini, and the general idea with that is to leverage research from Colored Coins (not entirely a historical footnote!) in order to establish an NFT standard on top of the Lightning Network. Maybe we’ll see some sort of hybrid approach that leverages Counterparty, Lightning Network and Liquid? Who knows!
What I do know, is that Bitcoiners are some of the most brilliant, hardworking, out-of-the-box-thinking people in the entire world, and that if we work together and figure out how to make NFTs really work on Bitcoin, and work for everyone, then there is nothing stopping us from creating a world of our own design, a world in which Bitcoin NFTs are the standard.
But this only happens if we make it happen. If you’re an artist and a Bitcoiner, go try out Counterparty. Think about what you like and what you don’t. Join the RGB telegram group and contribute your thoughts. I just joined myself, and after I get up to speed, maybe I’ll be able to make some meaningful contributions. As artists and collectors, we have to join the conversation and, in some cases, help spur it along.
To close, again with the words of Chiefmonkey, who describes himself as “99 percent maximalist” and is far more experienced in all of this than I: “NFT’s began with Bitcoin … and they’ll end with Bitcoin.”
And finally, finally … Thank you to Bitcoin Magazine for letting me share my thoughts. If you’ve read this far and want to learn more, you can follow me on Twitter or sign up for my newsletter that explores the intersection of art and Bitcoin.
Side note: If you are an artist looking to tokenize works on Bitcoin using Counterparty, check out this guide, and if you’d like help or just want to talk about Bitcoin and NFTs, join this telegram group. For collectors or folks who want to try issuing their own NFT on Bitcoin without needing to acquire the XCP token, check out Freeport.io.