Why Kevin McCoy Is Auctioning Off the First NFT Ever Minted

'For a while I was thinking that Quantum should go into the collection of a museum like MoMA but now I'm like fuck it,' McCoy said.

At a hackathon in 2014, digital artist Kevin McCoy and tech entrepreneur Anil Dash invented Non-Fungible Tokens (NFTs).

The first NFT ever minted is a pixelated octagon that changes colour like a frightened octopus. Entitled Quantum, it will go under the hammer alongside works by Larva Labs, Anna Ridler, Mario Klingemann, and Sarah Zucker, among others, in a sale co-curated by Sotheby's and Robert Alice.

The auction, entitled Natively Digital: A Curated NFT Sale, will open for bidding online from 3–10 June.

Digital Art NFTs' Real McCoy

Seemingly out of nowhere, NFTs exploded in price and popularity this year, with significant sales at auction by Beeple, Pak, and Mad Dog Jones.

Thinking back to 2014, McCoy is not so surprised.

'I certainly thought it was a big idea at the time,' he told Ocula Magazine. 'Seven years later the world has taken notice and that is gratifying. That said, we are still early in realising the full possibilities of this form.'

In recent months, McCoy has reevaluated where his work fits in the art world.

On 30 April, he tweeted, 'For a while I was thinking that Quantum should go into the collection of [a] museum like MoMA but now I'm like fuck it. I hope it flies like a giant flag above a maxi's citadel in the metaverse'.

The 'maxis' he's talking about are cryptocurrency maximalists, many of whom became fabulously rich as the price of cryptocurrencies skyrocketed. The metaverse is a networked virtual reality, first imagined by sci-fi author Neal Stephenson in his 1992 novel Snow Crash, where digital assets are as valuable as anything in real life.

Asked about his change of heart, McCoy replied, 'What is the best context for a digital work of art? For traditional works a museum has provided that context. But with a natively digital work it's much less clear.'

'The "colorful" depiction in my tweet recognizes the important commitment to native digital value emerging from within the crypto community,' he said.

Putting a Price on NFTs

Digital value, and the value of NFTs specifically, is much debated. Auctions provide a snapshot of how much money the second most interested party is willing to spend at a given moment in time, but they don't tell us what an artwork will be worth in the future or how valuable NFTs may be according to other metrics, such as their art-historical significance.

Writing for The Atlantic, Dash said he was skeptical about the value of NFTs. Why is a digital artwork worth more because it's recorded on a blockchain?

'The value of cultural work is real, as is the value of community,' McCoy argued. 'The real value of the crypto economy is also increasing as a relative percentage of the traditional economy. To me it makes sense that within a digital sphere these are all merging.'

McCoy says the price you put on an NFT can be broken down into a set of questions.

'Do you believe that assets will be digital? Do you believe that scarce digital assets will be more valuable than non-scarce assets? If yes to both then the scarcest digital assets will be the most valuable. This is currently how the crypto-collectors view things,' he said.

She Sells Seashell NFTs

Another artist in the show, Anna Ridler, confronts the value of digital assets through her work.

In Bloemenveiling (2019), Ridler used generative adversarial networks (GANs) to create short videos of tulips, alluding to one of the earliest and most infamous asset bubbles—the tulip mania that abruptly ended in February 1637. She auctioned off the works as NFTs, but programmed them to later self-destruct, the way flowers decay and asset bubbles ultimately burst.

The Shell Record (2021), which is going up for auction as part of Natively Digital, looks at another asset class that caused a mania among collectors.

In the eighteenth and nineteenth centuries, Europeans 'would pay vast amounts of money for specimens to add to their collections,' Ridler said.

'Further, shells have also been used as symbols of value for thousands of years,' she continued. 'They have been used as money on almost every continent, often outside of traditional financial systems. As such, they seem to be an appropriate subject matter for working with an NFT, where value is given by those who agree upon it.'

For The Shell Record, Ridler photographed shells she collected from the foreshore of the Thames during London's Covid-19 lockdown. She found shells of species such as oysters, which were common in Victorian and Georgian times but died off because of pollution.

'Scientists think that this change in which shells exist in the Thames will become a new time marker for the anthropocene as they become fossils in the strata and, I suppose this is a very idiosyncratic personal record of this process.'

Ridler used GANs to create new images of shells as they are understood by an algorithm, hinting at the ways humanity is changing not only the planet's physical geology, but also how the world is perceived in the age of computer vision.

Sillytuna, Serious Money

As part of Natively Digital, Sotheby's will auction off an artwork owned by a collector, not an artist. While NFT sites such as Open Sea, Hic et Nunc, and Nifty Gateway already allow people to resell NFTs, it's the first time a major fine art auction house has delved into the secondary market for NFTs.

Sillytuna is the owner of CryptoPunk #7523 (2017), a 24x24 pixel illustration of a masked alien. Aliens are the rarest sub-category among the 10,000 Cryptopunks generated by Larva Labs. CryptoPunks already fetch incredible sums on existing exchanges. In March, two rare alien CryptoPunks sold for ETH 4,200 each, about US $7.5 million at the time with no help from an auction house. So why partner with Sotheby's?

'Sotheby's has a wonderful history,' Sillytuna said.

Be that as it may, the NFT community, and the blockchain community more broadly, tends to steer away from existing institutions in favour of creating their own.

Acknowledging the importance of decentralisation in the crypto space, Sotheby's contemporary art specialist Michael Bouhanna said the auction house 'decided to decentralise the curation as much as possible.'

They partnered with digital art curator Robert Alice, consulted with The Mint Fund, and art galleries that work with digital artists, and accepted submissions from the digital art community on Twitter. Justin Aversano is the artist the community nominated to feature in the sale.

Nevertheless, he argued that fine art auction houses do have a role to play in shaping our understanding of the most important NFT art and artists.

'Our role as a curator is to observe the current ecosystem of NFTs, understand intimately the history of this medium, and identify the trends, preferences, and technical innovation that indicates where the space is moving towards,' Bouhanna said.

He said Sotheby's had tried to spotlight leading NFT artists, talented young creators, and historically underrepresented artists that deserved more attention.

'Digital art isn't a new movement. It is actually a mature movement that started in the 1960's with avant-garde works by John Whitney, for example,' Bouhanna said.

'And that's extraordinary because we can look back and find artists who are internationally and institutionally recognized as leading in this field. Some of them will be releasing their very first NFT for Natively Digital: A Curated NFT Sale.' —[O]