If you want to understand the power of NFTs — just ask Vincent Van Gogh
In 1971, Don Maclean wrote a beautiful, but simple, ballad about Vincent Van Gogh, which once heard is never forgotten. Touching the beauty of Van Gogh’s art and touching the soul as the lyrics caress the listener into understanding not only the beauty of his art, but also the tortured turmoil that was Van Gogh, the master of the post-impressionism era. His art continues to live on, touching so many people in so many ways. It also teaches so much to so many, and by virtue of his legacies, perhaps unexpectedly, those that want to understand the power of NFTs.
Van Gogh was a prolific artist. In his lifetime he produced around 2000 pieces, including 860 oil paintings, which were primarily produced in the last 10 years of his life. That’s around 2 oil paintings a week. Whilst producing so many beautiful pieces, he was unable to generate acceptance in the mainstream art market. There was only one recorded sale in Van Gogh’s lifetime the Red Vineyard piece, which sold for 400 Francs to Anna Boch (around $2,000 in today’s money). Yet, Van Gogh’s artwork today sells for millions of dollars, with the most recent sale, “Meules de blé”, being at Christie’s for a record $35.8m in November 2021.
Both these paintings are beautiful, but they showcase challenges that exist in the Art Marketplace that NFTs have the power to overcome:
- The establishment of provenance (i.e., confirmation of the chain of ownership)
- The ability to generate generational wealth
Let’s first consider “Meules de blé”. This piece has a very complicated story ownership that involves two Jewish families and Nazi art collectors.
According to a recent Forbes article the artwork’s journey began with its purchase in 1913 by a Jewish-German industrialist, Max Meirowsky, who ultimately sold the piece to fund his family’s escape from Germany in 1938. When the Nazis invaded Paris in 1940 the piece was confiscated from a collection belonging to a member of the Rothschild banking family, who had fled to Switzerland. The piece went missing for many years until it re-surfaced in 1978 at auction when it was purchased by oil Tycoon Edwin Cox. Upon Mr Cox’s recent passing, Christie’s helped broker a deal with the heirs to all three families to enable the piece to be sold for $35.8m. This example of provenance is a major problem for the traditional art industry with this piece in particular highlighting a tortured journey.
Let’s now consider Van Gogh’s legacy in terms of art sales since his death.
Annabouch.com lists all the auctions of Van Gogh and the prices of the artworks at the time they were sold with the local currencies at the time of sale. Using Swedish professor of economic history Rodney Edvinsson‘s great site that converts multiple historic currency valuations into estimated 2015 value in US dollars, we were able to convert the historic sales prices into the 2015 equivalent USD pricing. The auction sales are shown below at 2015 USD prices.
By our analysis, the total value of Van Gogh’s sales after his death total close to $800m at 2015 USD prices. The challenge is that no funds are automatically passed to Van Gogh’s extended family for the success of Van Gogh ‘s subsequent sales. So how would these situations have been changed if NFT technology existed back in the late 19th Century.
First, any NFT-based sales would have been registered to the blockchain supporting NFT marketplaces. By doing so, the sales of the artworks would have been confirmed in a permanent record of sale and of transfer of ownership that could not have been deleted. Any records could only have been updated with the original ownership detailed in a transparent way for anyone with an internet connection to validate. In this way, the true ownership of inappropriately confiscated art could have been established with a single source of truth establishing the original provenance of each sale in the chain.
Second, NFTs provide artists with the ability to programme in an automated royalty structure. This structure enables royalties to be automatically passed to the artist in the event of any subsequent sales once the piece is minted. Typically, this is 5% of the sale price. Imagine if Van Gogh’s extended family had a 5% royalty due on each artwork that was subsequently sold after Van Gogh’s passing. Instead of history recording Van Gogh’s only sales in his lifetime being 400 French francs, the extended family would have received 5% of the subsequent sales — an estimated $40m at 2015 USD prices.
Clearly the above analysis tries to re-paint history, but if we roll forward to today, artists, publishers or indeed any creatives working with digital files have the ability to track sales and ownership, and the ability to build in repeating royalty structures from the ground up. This showcases the developing power of NFTs to shape the entire future direction for the art industry as whole. For those that are on a journey of discovery of NFTs now is the time to explore and understand the opportunities for yourself. In the words of Don Maclean’s song about Vincent Van Gogh:
“They did not listen they did not know how — perhaps they’ll listen now.”
About the author
Tim Lea (@timothylea2 on twitter) is author of the book Down the RabbitHole, a book on the blockchain in plain English, an international keynote speaker on the strategic application of the blockchain, and an investor in NTFs and the cryptocurrency space. He is the co-founder of a new Social Impact project Walking Between Worlds (@WBWNFTS on twitter) whose mission is to energise global Indigenous communities to amplify First Nations powerful voices through NFTs