Can NFTs be used to fund art?

Sun Sep 17 2023

tags: public draft economics

Imagine you're an artist who's just created a piece of art--say, a novel. You'd like this piece of art to be enjoyed by people around the world, but at the same time, you need money to eat. The way you'd normally square this circle is to publish the novel and gate access to it, e.g. sell the eBook for $10, the paperback for $20, and only the people who have bought the book can read it.

That's the normal approach. Can we do something different? Here's a crazy thought: distribute the work completely free. Let anyone read it, make copies of it, send it to their friends, whatever. Let the work spread as widely as possible. Then, create a golden plaque signed by you, the artist (or maybe a signed copy of a gilded hardback version, whatever strikes your fancy). Then auction it off to the highest bidder.

The question is: would this work? Would this make the artist any money? Better yet, could an artist make more money under this post-hoc auction model compared to the regular model?

The auction approach seems quite compelling. As an artist, I'd want my work to be accessible to as many people as possible. I wouldn't want to deny others the pleasure of experiencing my work by gating it off -- especially when it costs me nothing to give someone a copy of an eBook or a JPEG. At the same time, though, I'd be really worried that the auction model wouldn't work; that nobody would pay me fairly for my work, that I wouldn't recoup the costs associated with the production of the work. So I'd need to be seriously convinced that I could make as much -- if not more -- money under the auction model.

I worked with Bassel to create a toy economic model of how this could work.