The Rise and Fall of NFT-Only Galleries: Lessons and Opportunities

I am a lawyer, an entrepreneur, and one who has watched the rise of NFTs in the world of art with a mixture of awe and much scepticism. The boom of NFTs was audacious and full of vision-the cornerstones of any paradigmatic shift. Yet, these very galleries that hitched their horses exclusively to NFTs failed to sustain. This phenomenon illustrates important lessons from the industry and underlines some of the challenges and opportunities that digital assets pose for the art market.

What Went Wrong?

1. Misreading the Collector Base

Art markets are as much about human emotion and connection as they are about value. Traditional collectors often seek a tactile relationship with their acquisitions—a physical print, a canvas, or even the sense of place that a gallery provides. Meanwhile, many of the galleries that had moved into NFTs had been ignoring the complicated nature of their audience-the seamless bridge between the digital and physical worlds. To a large number of collectors, an NFT unto itself-it not being tethered to a tangible counterpart-feels remote and impersonal.

2. Legal Ambiguities: Ownership and Authenticity

The NFTs, extolled as the ultimate way of proving ownership of digital items, in most ways remain mired in legal murkiness. There have also been questions as to what, precisely, is being owned when it comes to an NFT: ownership of the artwork or of the token? What rights does a buyer have to reproduce or display the work? Where NFTs are linked with physical prints, consistency and authenticity become thorny. The lack of standardised contracts and enforceable rights has left both buyers and galleries open to ambiguity.

3. Market Volatility

The market for NFTs is, similar to any cryptocurrency, inherently volatile. Price surges and crashes make for a very unpredictable environment that many galleries were very poorly prepared for. At best, betting an entire business model on such instability was a gamble.

4. Lack of Industry-Wide Education

Few artists and galleries that entered the NFT space did so with much more than excitement, really understanding the blockchain technology behind it, the implications on copyright, or what digital-native collectors want. In fact, lack of education throughout generally led to missed opportunities and distrust among potential buyers.

Opportunities and Possible Solutions

1. Digital and Physical Realms

To find a solution for the disconnectedness of NFTs with collectors, galleries may want to lean into hybrid models. Conjoining an NFT with a high-quality physical print, a VR/AR experience, or access to an event or community could add more tangibility in value to a collector. Weaving narratives that bridge digital and physical can make NFTs more relatable to traditional collectors.

2. Building Trust Through Clear Contracts

Clear legality is crucial for the development of the NFT art market. Galleries need to invest in solid contracts which delineate, with clarity, ownership, copyright, and resale rights regarding both the NFT and any physical artwork issued in connection with it. Transparency is not only going to protect the buyer but also give them long-term confidence. 

3. Education of Artists, Collectors, and Galleries

This industry needs to educate the masses. Workshops and webinars with participating tech-savvy professionals serve to demystify blockchain technology and what it all means. Educate collectors about what NFTs can and can't do for them, so collectors can make better, wiser purchases and, therefore, a more steady and serious market.

4. Diversification to Address Volatility

It is no longer tenable for one to exclusively bet on NFTs. Galleries should expand by adding NFTs into their broader offerings, rather than be dependent on NFTs as their sole locus. This is affording them a shock absorber against market volatility, with innovation still on the table.

5. A Future We Cannot Afford to Ignore

This does not mean that the movement of digital art has met its demise; if anything, it has only just started. The failures of early adopters, so to speak, are not signs of doom but part of the necessary process of evolution. Those who dared to experiment have paved the way for a more mature, nuanced approach to NFTs and digital art.

The world is irretrievably steeped in digital reality. For every artist who resists this, that is his choice to be honoured. However, from that crossroads of technology and imagination, amazing inventions are developing even as some of it misses the connection with everybody. This, after all, is the nature of every cultural revolution-it reflects both the brilliance and the blemishes of our times.

Lastly, NFTs find a place within this unending narrative. While crossing this digital era, we must learn how to take advantage of its potential, yet keep in mind that it has limitations. The future is from those who balance tradition with innovation in order to create a new history of art reflecting our common journey on Earth. This balance of critique and hope is essential as we chart the next chapter of NFTs in the art world. Failure is not defeat; it is part of the process.

4 Key Changes in Art, Law, and Technology Over the Past Few Months -fall 2024 edition-

Summer is officially over. Back to the gloomy weather and rainy jackets, but never to the old us. Here are four changes in this passionate intersection: art, law and tech (and my journey in it).

1. The Slowdown of NFTs: End of a Bubble or Market Reconfiguration?

In recent months, the NFT market has experienced a noticeable slowdown, particularly in terms of sales and commercial interest. Factors such as oversupply, uncertainty around return on investment (ROI), post-pandemic inflation, ongoing copyright issues, and the drop in Ethereum prices have contributed to this decline.

But does this signify the end of the NFTs? I believe it’s too early to declare it over. NFTs are still an emerging field, and there’s much left to discover. Beyond just the art market, NFTs will likely find their place in other industries and use cases. Once trust is built—especially from a legal and security standpoint—there’s potential for NFTs to rise again, perhaps in a more stable and sustainable way than we saw during the pandemic frenzy.

2. Galleries and Museums Continue to Bet on Technology

Despite the NFT slowdown, technology remains a key player in the art world, particularly within galleries and museums. Many have embraced tech to create immersive experiences and improve accessibility to art. From augmented reality exhibitions to virtual museum tours, institutions are rethinking how we engage with art.

In my experience living in London, I’ve had the opportunity to converse with several galleries over the past few years. Many navigated the intersection of tech and art with uncertainty, experimenting daily. Some impressed me with their passion and willingness to take risks. Others, however, were less prepared—somewhat passive, and their failure to address legal issues led to their closure. Their struggles are a reminder that the legal groundwork is crucial as galleries move into this new digital age.

I believe these past experiences, though challenging, are valuable stepping stones. They offer a chance for galleries to reimagine their role and impact as we move towards 2025. I plan to explore more from a business perspective how NFT galleries could approach this tech wave with greater foresight.

3. Artificial Intelligence: Opportunities and Challenges for Art

AI is revolutionising the art world, both in the creation of new works and in legal considerations. While AI-generated art is gaining attention, the ethical dilemmas surrounding authorship and originality continue to stir debate. Additionally, the European Union recently introduced a framework addressing AI in creative industries, attempting to balance innovation with necessary regulation.

"I’ve mentioned in previous blog posts, education is key—understanding the basics of legal frameworks (not just for artists, but also for app developers and tech innovators) is critical".

For artists and industry professionals, this presents both opportunities and challenges. As I’ve mentioned in previous blog posts, education is key—understanding the basics of legal frameworks (not just for artists, but also for app developers and tech innovators) is critical. AI art isn’t about making easy money; it’s about navigating the complexities of authorship and value. At the end of the day, artworks that maintain a clear sense of authorship will continue to stand out.

The EU’s recent framework is a promising start—it’s practical without being overly intrusive, but there’s still work to be done. Those of us in the art world need to educate ourselves and play an active role in shaping these emerging channels of artistic expression.

4. Personal Reflection: Law as a Mirror of Society in Art

Beyond intellectual property law, I see law and art as reflections of society. Both fields serve as frameworks through which we explore, question, and understand human behaviour and culture. They evolve alongside us, shaping and being shaped by our collective experience.

Over the past months, I’ve reflected on how deeply art has transformed my life. Each question I ask myself leads me to execute projects with greater clarity. Juliana Boom, my ongoing project, isn’t just about creating art to sell. It’s about living through art—finding peace in knowing that my journey in this world is one of joy, learning, and connection. Ultimately, I believe art brings us together, and that’s why I remain committed to it. It excites me to think about helping others experience their own stories through art, if that’s what moves them.

Wrapping up:

The intersections of art, law, and technology are evolving rapidly, but they’re not disconnected. Whether we’re exploring the future of NFTs, AI’s role in creativity, or the legal frameworks that support the art world, one thing is clear: these fields are all reflections of our society and its constant state of change.

As we navigate this new season of innovation and reflection, my goal is to continue exploring how these areas interact—and to encourage others to think deeply about how art, law, and technology shape our world. Whether through personal experiences or the broader industry trends, I believe we’re all connected by the art we create, the laws we follow, and the technology we embrace. Here’s to the journey ahead.

Thank you.

Juliana

Week 12:

In recent months, I've found myself immersed in a period of exploration, where my artistic journey has led me down uncharted paths. This phase, though disconcerting at times, has become a canvas for transformation. Doubts about my abilities occasionally creep in, and there are moments when I look back at my work and no longer recognise the artist I once was. It's not a crisis, nor is it a motivational tale. These are just musings, fragments of thoughts that haven't yet found their place.

I've come to embrace this messy, undefined space. There's no rush to find all the answers now; instead, I'm allowing myself the freedom to experiment, to indulge in this chaos. What do I want to share with you in this moment? Is it the evolution of my skills in oils, or perhaps, it's the mundane beauty of my everyday life - cooking, simply being human? Everything we do creates something, leaves an imprint, even in moments of apparent stillness.

This message carries no definitive solutions, only dreams, actions, and sometimes, whimsical choices. My thoughts spill out, often too numerous to process in one sitting. I sense their presence, like whispers near my ear, but decoding them all remains a challenge. Through this blog, I want to convey that while tangible creations might be sparse right now, my mind is always at work, continuously evolving, perpetually aware - or at least, striving to be. I'm constructing a life where my art can open doors that words cannot, where my existence isn't that of an outsider, not in Britain, nor in the intricate tapestry of this life. And in this process, I cherish the memories of my furry companion, finding solace in the delicate balance between exploration and rootedness.

In the messiness of uncertainty, where ideas collide and doubts surface, there's a peculiar beauty. It's the raw, unscripted essence of life and creation. We all go through phases of not knowing, of feeling adrift in our thoughts. These moments don't make us lost; instead, they remind us that being unsure is a part of the process. We're here not just to have it all figured out but to wrestle with the unknown, to question, and to explore. So, here's to embracing the confusion, to the uncharted waters that lead us to unexpected discoveries. Let's navigate this together, finding solace in our shared journey of unraveling life's mysteries.