Today, I’m excited to announce the formal launch of ClubNFT, a company dedicated to building better solutions for NFT collectors. Marketplaces have evolved quickly through competitive pressures but the rest of the NFT infrastructure has fallen behind. I believe there’s more to NFTs than just buying and selling. We are focused on the protection, discovery, and sharing of NFTs. But first, a little about how ClubNFT came about.
In 2017, I wrote an article on Artnome titled “The Blockchain Art Market is Here” and went on to lecture around the world about the many virtues of creating a digital art market on the blockchain. In the article, I argued that there are at least four major areas where blockchain will disrupt the art market:
1. Driving digital art sales through digital scarcity
2. Democratizing fine art investment
3. Improving provenance and reducing art forgery
4. Creating a more ethical way of paying artists (through artist’s royalties)
Subsequently, I began writing and sharing what I learned about the space. I also became an avid, early collector of NFTs. I was collecting because I believed—and still do—that the blockchain can help us build a new economy for digital artists. I had no idea that some of those early works would be worth millions of dollars someday.
Panel on blockchain and digital art at Christie's Art + Tech Summit in London, 2018. From left to right: Jason Bailey, Artnome - Masha McConaghy, Ascribe - John Zettler, R.A.R.E. Digital Art Network - Matt Hall, CryptoPunks - Judy Mam, Dada.nyc
One line that made it into all my interviews and presentations was: “Even if the marketplaces go out of business, your CryptoArt (this was before we called them NFTs) will always be safe because they are decentralized on the blockchain.” I was wrong.
By mid-2018, cryptocurrencies started to crash and NFT marketplaces disappeared along with the art, and sometimes even the NFTs themselves. I still own the first NFT by the artist XCOPY, whose works have recently sold to collectors like Snoop Dog for millions of dollars. Mine, too, would be worth millions of dollars today, but I purchased it from a marketplace that went out of business. Now, it is worth nothing.
Similarly, I purchased several works on R.A.R.E Art Network, but most of them are no longer supported since that marketplace went out of business. Though, to their credit, they are trying to help recover them. Same story for works I bought on many other marketplaces that did not survive the 2018 bear market… Editional, Digital Objects… the list goes on.
Back then, this was not such a big deal to me because I was spending tens of dollars at the most. But now, these early NFTs are highly sought after and there is not much I can do about it. Worse, the core problem that leads to the image/video files disappearing still hasn’t been addressed. We now have a market where billions of dollars have been spent on NFTs and the majority of collectors lack the technical skill or an easy-to-use tool to assure the media files associated with their NFTs don’t simply vanish.
The problem is that the media files associated with NFTs are typically not stored on the blockchain itself (the blockchain is not efficient for storing larger files, as of 2020, storing 1MB of data on the Ethereum blockchain would cost you approx. 17,100 USD ). Instead, the digital art files are stored on the InterPlanetary File System (IPFS), a distributed system for storing and accessing files, websites, applications, and data. IPFS is a fine solution for distributing the image files associated with a given NFT, but somebody must still pay to actually store them. So, when collectors purchase an NFT, they are dependent on the marketplace to continue to pay the storage fees for the media files (aka, the digital art); otherwise, the art will disappear.
I love NFT marketplaces and I consider my friends who built them and stuck with them through the lean years to be among the true heroes of the NFT community. I was the first collector on SuperRare, and KnownOrigin credits my early article “What is CryptoArt” for “kickstarting the birth of KnownOrigin.” The way I look at it, if NFTs continue to grow and take off (and I am certain they will), we will eventually see marketplace consolidation. In other words, I am certain that two years from now, time-tested marketplaces like SuperRare and KnownOrigin will still be around but many other marketplaces will be gone. If we are not careful, many NFTs will be gone along with them.
Having learned my lesson by living through the last bear market, I decided to build a team and raise money to solve this problem for collectors and artists. I believe in NFTs, and I think this unsolved storage issue represents the single greatest threat to the NFT ecosystem.
Startups are hard - I know because I’ve spent most of my career in them. But this issue is so important. Having spoken with hundreds of artists and collectors, the biggest threat to NFTs today is that collectors have zero control over the art associated with them.
We are not the first company to realize that this is a huge problem. There are services out there that charge collectors a monthly fee to pin the art from their NFTs to IPFS. This ongoing tax on the NFTs you own brings a new set of questions with it. You already paid for your NFTs, why should you have to pay a monthly fee to a pinning service? And what happens if the pinning service goes out of business, or experiences data loss?
Others have developed “forever storage” solutions that charge NFT collectors up-front for permanent storage of their image files. This amounts to paying the total cost to store the files forever, when that collector may very likely want to sell them soon. It’s a bit like someone asking you if you want to pay for the next 200 years of electricity in your house today instead of over time. What if you move next year? These forever storage approaches are also blockchains unto themselves, which means you now have another failure point to worry about, and a new ecosystem + cryptocurrency you need to put your faith in.
We realized that, for collectors to truly own their NFTs, they needed a tool that made it easy to download all the files associated with their NFTs at the click of a button. This empowers them to make their own decisions over how to safeguard their NFTs, and we can offer this for free and without locking anyone into a single solution. We don’t care where or how you store your backup, that’s your business. As the true owner of the NFT and its media, you could now store your art on Google Drive, AWS, a pinning service, a “forever storage” solution, or anywhere else. It’s up to you.
Today, my startup ClubNFT announced $3M in seed funding; our official company launch; and our first solution, which will allow collectors to safeguard their NFT investments by downloading the media associated with all their NFTs in a single click. I’m proud to be joined by CTO/Co-Founder Chris King, formerly of Google; and CFO/COO Danielle King, the former Manager of Painting and Sculpture at MoMA.
If you are a collector, join us on our journey of building next-generation infrastructure solutions to discover, protect and share NFTs for digital artwork. Learn more about our new product here and start protecting your NFT investments by signing up for the beta here.