Cashing in on new tech, Black artists take to NFTs over cryptocurrency

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In her nearly six decades of life, she’d never seen anything like this.

She peered into the distance, where through the windows of a mansion she could see her artwork on display. To get there, she’d have to maneuver through the obstacle course ahead of her: a crowd of people standing amid luxury cars, lounging by a pool and drinking at a nearby bar.

Dana Powell-Smith balled her fists and anxiously walked forward in her yellow evening gown. 

“I didn’t know what to expect,” Powell-Smith said, “nor did I know how to navigate the space.”

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She was moments away from speaking at the inaugural Black Meta Fest, a seven-day festival filled with workshops, panel discussions and social events curated by Black professionals. But that’s not what made her edgy.

Unlike ordinary art galleries, the paintings Powell-Smith would present were virtual copies of her work. Everything was virtual: the cars, pool, people in attendance, Powell-Smith herself.

Powell-Smith, 59, stood before the audience and introduced one of her favorites: a mixed media piece composed of a deconstructed Gucci bag and belt. In reality, she was at home in bed, strapped into an Oculus Quest 2 headset. Her presentation occurred in a virtual realm called the metaverse, the next generation of virtual reality technology. Her canvas was an encoded digital asset called a non-fungible token, or NFT.

Freed from the fringes of the tech world, these technologies have recently found momentum within the mainstream, capturing the interests of local artists like Powell-Smith. 

“It was the most amazing thing I have ever seen in my life,” Powell-Smith said.

Many see the technology as an avenue to circumvent historical inequities faced by artists of color, tilting the scales of power into the hands of creators. With NFTs, artists can sell and collect royalties for their work from a global audience. With the metaverse, creators can build entire worlds anchored on the Black experience.

NFT ascension into the mainstream

NFTs are digital files, each with a unique verifiable code that allows people to trace and authenticate the origin of the files.

This is made possible by their existence on the blockchain, which is the underlying technology also behind cryptocurrencies like Bitcoin.

By providing a way to uniquely identify and authenticate digital files (NFTs), blockchain technology has enabled the creation of what experts are calling digital scarcity, and thus, unlocking monetary value normally attributed to physical things where demand is high and supply is singular.

Like an original Babe Ruth baseball card or a painting by Pablo Picasso, NFTs can also be recognized, rarified and verified – and sold for millions of dollars.

The NFT market reached $40 billion last year, Bloomberg reported, just $10 billion shy of the conventional art market. The highest selling NFT – a collage of photos taken over 5,000 days – sold for $69 million. Christie’s and Sotheby’s, two of the biggest art auction houses, now sell NFTs.

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Many NFTs found online are digitally native, meaning they were created digitally from the start. However, anything that can be digitized can become an NFT. This includes Powell-Smith’s paintings; the first-ever tweet by Twitter CEO Jack Dorsey, which sold for $2.9 million; 10-second NBA highlight reels; and soon, shoes by Nike, now poised to profit from NFT sneakers after recently acquiring a company specializing in cyber-wear (also called wearables).

The hardest question for outsiders to answer is why. Why would anyone spend millions of dollars on a JPG?

Most NFT users see it as an investment vehicle and buy NFTs with the hopes of later selling them for a profit. An NFT sold for $456 in 2017 was valued at $171 million five years later in February 2022, Yahoo Finance reported.

‘Sitting back wasn’t an option’

Although she is the granddaughter of a famous painter – Harlem Renaissance artist Georgette Seabrooke Powell – Powell-Smith had only painted sporadically throughout her life, significantly slowed down after a near-fatal car accident in 1994. 

But after the killing of George Floyd, she said she felt compelled to the canvas, needing an outlet to express her outrage.

“When I watched that video on TV of him being killed…” Powell-Smith said. “I had to get it out. I was screaming in silence.”

She sold a painting for the first time, posted the news to Facebook, then joined Clubhouse to learn more about the business of art. That’s when she first heard about NFTs. At first, she thought it was “crazy,” and then she noticed her friends selling NFTs for considerable amounts of money. 

She struggled through most of 2021 researching and figuring out how everything worked before she found the courage to do it herself.

“It was difficult because it’s like learning another language,” Powell-Smith said. “But I was determined. It was something I had to learn. Sitting back wasn’t an option.”

She found a user-friendly website that didn’t charge many of the common fees required to convert files into an NFT. For that process, called “minting an NFT,” she takes a photo of her painted canvas, uploads it to the NFT marketplace, and, through the blockchain, it receives its NFT status. 

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In February, she sold her first NFT for $100. Since then, she’s sold a total of roughly 20 pieces and made about $1,500. But as her confidence and popularity have grown, she’s started to list them for higher. Her current most expensive NFT listing is $2,000.

Unlike traditional artwork that lives on a physical canvas, after Powell-Smith sells an NFT, the original painting remains in her possession. She can also sell additional digital copies – each with their own unique ID – called “editions,” adding to potential for revenue off a single piece.

Realizing the benefits, Powell-Smith has started to teach other artists of color how to list and sell their work as NFTs.  

“This is for us,” Powell-Smith said. “I want everybody to win.”

NFTs ‘disrupt’ traditional art world

Travis McMichael is the co-founder of The Happy People Experiment, a platform for artists of color which hosts NFT exhibitions as well as music and film festivals in the metaverse.

He considers it “mission critical” for communities of color to adopt the technology and get involved during its relative infancy.

“We need to be the first movers in this space,” McMichael said, “not the last.”

Black artists have been institutionally excluded from arenas within the fine art world, he said, which contain very few Black-owned art galleries, curators and agencies.

“The gatekeepers of the fine art world,” McMichael said, “don’t reflect our community.”

However, “NFTs fundamentally disrupt that.”

Through burgeoning online NFT marketplaces, artists can bypass traditional barriers to entry and directly connect with buyers and art collectors globally. Meanwhile, artists maintain control and ownership of their work while also having the ability to collect royalties in perpetuity.

This happens because artists have the option to require royalty payments, which gets written into the code that identifies NFTs on the blockchain. The royalties are then automatically charged, collected and distributed back to the original artist each time that NFT is sold.

“That’s never happened before in the art world,” McMichael said. “It’s economic agency for artists unlike anything we’ve ever seen.”

Other local artists start selling NFTs

For 37-year-old Shaunt’e Lewis, a mother of four now in her second career, “It started fast, and it took off fast.”

Lewis had been a hair stylist for 15 years, but when COVID-19 forced her to close her two salons in 2020, she found more time for her passion creating art and decided, “I’m not doing hair anymore, I’m following my dreams.”

She started painting full-time in 2021 – she painted a mural for the March Madness tournament, hosted by Indianapolis, which featured on the cover of the New York Times art section. When she first heard about NFTs, she had her doubts.

“There was just so much information,” she said. “It was overwhelming.”

In December 2021, she met Powell-Smith, who helped walk her through the process. Lewis sold her first NFT in January. 

“As soon as I posted it,” Lewis said, “it sold right away. So the next day I posted more, and those sold, and then I just kept posting.”

The most Lewis said she’s sold an NFT for is $1,000. However, an NFT Lewis sold for $110 in January was later listed at $35,000 by the buyer – positioning Lewis to earn an additional $3,500 from its sale, due to the 10% royalty fee.

“I call it flipping artwork,” said Derek Tuder, another Indianapolis artist who listed his first NFTs for sale this year. “Instead of flipping houses, we are now flipping artwork.”

Tuder, 56, who’s been making art for over 40 years, believes NFTs are going to change the game for artists like himself.

“I thank God this came along,” Tuder said. “Now myself and other Black folks in Indiana and all over the world, we can get exposure… you’re no longer just a local artist.”

Potential pitfalls within the pursuit of profit 

This new, digital landscape doesn’t come without risks, said Sandali Handagama, a financial regulations reporter at CoinDesk who specializes in cryptocurrencies and NFTs.

“The thing about being new,” Handagama said, “is that it makes (users) more vulnerable to some of the less cool things about the crypto space.”

One potential pitfall is something called a rug-pull, where NFT creators generate a lot of hype behind their product, drive up the price, sell it, then the creator disappears almost immediately – vanquishing its value. 

Because of NFTs’ culturally driven ascent, “the asset you’re holding is only as valuable as everybody claims it is,” Handagama said. “When a leader disappears, the project suffers.”

NFT buyers aren’t the only ones susceptible to treachery though, Handagama advises that NFT creators should also be wary. She said she’s seen instances where people steal the work of artists off Instagram and other places online, make NFTs out of it, then sell it without the original artist ever knowing.

Regulators everywhere are playing catch up, she said, working to establish regulations and safeguards for a space defined by its unregulated existence.

This year, shortly before the Department of Justice announced its first director for the newly created National Cryptocurrency Enforcement Team, the U.S. Treasury Department issued a warning over art-related NFT risks.

Hoping to ‘Harriet Tubman’ people into the new tech space

Following her NFT artwork presentation in the metaverse, Powell-Smith walked off stage in awe.

“The thing that amazed me the most,” she said, “was my avatar was able to stand there in front of my art and talk to people about it.”

She then took a virtual seat among the audience – which included a dark-skinned woman rocking a big grey afro and purple glasses, seated two rows behind a brown-skinned woman with purple highlights, green eyes and a black trench coat – and prepared to listen to the next lineup of Black speakers at Black Meta Fest.

At the end of the night, a few attendees gathered at the bar for a virtual imbibe.

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CEO of Deeper Tones Collective, Adorable Jasmine, who hosted the event, believes these types of cyber experiences are the inevitable future. She wants to get as many people of color on board as soon as possible, before it’s too late. 

Within the technology, she sees the creation of a brand-new market ripe with opportunity, and hopes to continue the “Harriet Tubman mission” of ushering people of color into a new space.

“Right now, there’s no gatekeepers,” Jasmine said, “unlike before where there were so many barriers to entry for so many things because of systemic racism, there’s still the opportunity for us to actually have a stake in this.” 

Contact IndyStar reporter Brandon Drenon at 317-517-3340 or BDrenon@gannett.com. Follow him on Twitter: @BrandonDrenon.

Brandon is also a Report for America corps member with the GroundTruth Project, an independent, nonpartisan, nonprofit news organization dedicated to supporting the next generation of journalists in the U.S. and around the world.

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