Rarity is a priceless resource for curators and collectors. From one-of-a-kind oil paintings to vintage baseball cards, or even giant Cheetos emerging from regular-size consumer bags, people enjoy things that break from the norm.
However, the vast world of art is generally ruled by supply and demand, which makes rarity (often interchangeable with the term scarcity) an elusive and ambiguous term to define concretely. While 1/1 works are widely accepted as the highest form of any single craft, rarity itself isn’t actually an official measurement of appraisal, but one of many factors that helps to determine the value of a piece.
As the age of digital art and non-fungible tokens (NFTs) unfolds, the concept of rarity is taking on new meaning. Especially where crypto-art is concerned, the term “rare” has become detached from its perceived definition in the traditional art ecosystem.
Although creators and collectors in the NFT space might speculate about the rarity of CryptoPunks and the meaning of scarcity as it pertains to the future of Web3, it’s hard to say whether any comparison exists between the staying power of a 1/10,000 generative avatar and, say, a 1/9,000 original painting from Andy Warhol.
What is rarity, really?
Rarity can mean different things to different people in varying industries. Still, we can give a rolling definition of rarity as the quality of something with unusual, special qualities. For the sake of both art and collectibles, rarity comes down to the question of, “how many others are there?”
In traditional art, rarity is defined by supply and demand. That is to say that the amount (total supply) of a piece of art or the number of works created by an artist influences the desire of buyers to purchase it. So to discern rarity, one must look at a number of factors surrounding the scarcity of a piece and of an artist.
Say an appraiser is attempting to determine the rarity of an oil painting. They might ask: How many pieces did this particular artist produce over the duration of their career? How many of those pieces were oil paintings? How many are 1/1 or editions? How many are currently accounted for and/or still in circulation?
The below Sotheby’s video further illustrates the quest for rarity and provides a more intimate look into how the world’s top art connoisseurs perceive the concept.
By understanding the extent and the state of an artist’s catalog, appraisers can determine the appeal or specialness that any given piece embodies — be it an oil painting, bottle of wine, garment, etc. Considering the vast quantity of appraisers and art historians that remain active in the traditional art world, there never seems to be a lack of knowledge or expertise when it comes to discerning the rarity of fine art.
However, things are different in the NFT space. While the concept of NFT rarity is undoubtedly derivative of the traditional art world, it has since transformed through the subjective lens of crypto-artists, developers, and collectors. For example, the phrase “looks rare” become associated with meanings beyond the conventional connotation. Instead of non-ironically signifying an observation of rarity, the phrase communicates the potential profitability of an NFT/collection, in addition to mocking those that obviously lack it.
The fact of the matter is, NFT rarity is based on different metrics than traditional art. Uncommon traits and characteristics help determine the worth or value of the rarest NFTs in a PFP collection. In other words, while an NFT collection might total 10,000, if only 10 of those thousands have significantly unique characteristics, they are considered rare among that collection, and thus rare in the scope of the greater NFT market.
Anecdotally, as the value of an overall collection increases, so do the prestige and rarity of its most prominent/desirable NFTs. This happened with Bored Apes, Doodles, Moonbirds, and others. It’s simply an accepted but generally unspoken rule of NFT valuation.
Yet, if those 10 unique NFTs were minted separate from a larger collection, say, by an independent, mid-level crypto-artist, the likelihood of them achieving the same notoriety would be significantly lower. Although they may be viewed as even rarer by some (depending on the artist who created them and the scarcity of their numbers), their lack of affiliation with earning potential or relevance could easily exclude them from the rarity conversation.
Could NFTs match the rarity of traditional art?
The elephant in the room during any crypto vs. “real” art conversation is that, unlike traditional physical art, NFTs are valued in cryptocurrency. While there’s much to say about the viability (or lack thereof) of fiat currency, crypto is and retains a lengthy reputation of being volatile and unpredictable. Consequently, this characteristic unpredictability has been transferred to NFTs.
The big question concerning NFT rarity is: what happens if crypto prices go to zero?
If an NFT sold for 100 ETH during a time when the price of ETH was worth more than $4,000, does it retain the same value and significance when ETH has dropped to $1,500? While it very well could retain or even exceed its value in terms of ETH, it’s unlikely that its fiat (dollar) value would increase by a significant degree.
There may be too many moving parts surrounding crypto-art to dictate whether NFTs will retain rarity down the road. Concerns about environmental impact, widespread scamming behavior, and a lack of regulation often define the NFT space. But, while some legacy institutions have embraced the technology, the majority of art collectors and general consumers still seem reluctant even to give crypto-art the time of day.
Many of the most influential NFTs will undoubtedly retain cultural and historical significance for years. But it wouldn’t be a stretch to say that even the rarest of CryptoPunks could be cast aside if ETH drops and sticks to $0. Because of this, many NFT collectors informally advise others to collect not only rare and potentially valuable tokens, but those that have personal and cultural significance.
Beyond speculation, much argument surrounding rarity in the crypto-art space seems to stem from the youthful nature of NFTs and Web3. Remember: NFTs are less than a decade old, so they can’t hold a candle to the many millennia of experience the traditional art world holds. While monumental sales, including those from crypto-artists like Beeple and Pak undoubtedly rival even the most high-profile traditional art auctions, the merit of crypto-art and NFTs is not universally accepted in the greater art market.
On-chain provenance served as a primary argument for the longevity of crypto-art for years. For example, some believe the troubled and murky past of Leonardo da Vinci’s Mona Lisa, in addition to countless other pieces that have gone missing or been subject to duplication, could become non-issues with the use of blockchain tech.
While it’s true that we can quickly ascertain the immutable history of an NFT through the open-ledger blockchain network, it seems the excitement of this functionality has lessened over the years. Yes, immutable digital ownership is groundbreaking, but could its novel nature truly compete with the historical significance of traditional physical art?
This is precisely the line of questioning that artists like Damien Hirst pursue to look beyond the status quo of rarity. With Hirst’s collection The Currency, a spotlight is placed on the importance of supply and demand, the two metrics determining the rarity of his NFTs and their corresponding physical pieces, respectively. By prompting collectors to decide whether to keep their tokens or destroy them to redeem a physical work, Hirst highlighted the malleable and ever-changing concept of scarcity. If given the option, which would you bet would retain its rarity for the long term?