The Untold Story Behind Beeple’s Historic NFT Sale: ‘Token Supremacy’ Excerpt

Mike
Winkelmann
sank
into
the
sofa
as
three
cameras
recorded
his
meltdown.
The
dueling
identities
that
had
once
structured
his
life
were
coming
into
conflict
as
his
fortunes
increased
by
the
second.
Unseen
crypto
billionaires
were
bidding
for
his
soul,
or
at
least
it
felt
that
way.
His
entire
artistic
career
was
being
auctioned
as
a
compilation
of
five
thousand
digital
artworks,
packaged
by
the
Christie’s
auctioneers
as
a
single
non-fungible
token
(NFT).
The
winner
would
receive
this
NFT
as
an
online
certificate
of
ownership,
a
deed
to
14
years
inside
Winkelmann’s
mind.
It
was
surreal
watching
his
own
coronation
from
the
couch.
The
new
crypto
king
was
slack
jawed
as
his
net
worth
continued
to
rise
by
the
millions
on
the
computer
screen,
reckoning
with
the
transformation
of
his
art
into
an
ultimate
use-case
for
blockchain
technology,
bringing
the
metaverse
into
the
mainstream.
Two
documentary
crews
captured
his
euphoric
stupor,
memorializing
the
tight
choreography
of
this
historic
moment.

Zachary
Small,
a
New
York
Times
reporter
writing
about
the
art
world’s
relationship
to
money,
politics
and
technology,
is
the
author
of



“Token
Supremacy:
THE
ART
OF
FINANCE,
THE
FINANCE
OF
ART,
AND
THE
GREAT
CRYPTO
CRASH
OF
2022,”


published
by
Penguin
Random
House.

The
artist
had
become
a
multimillionaire
at
that
moment.
It
was
too
much
to
bear,
and
suddenly
he
was
bolting
for
the
out
door
patio,
away
from
the
living
room,
where
his
family
had
gathered
to
celebrate
his
success.
Winkelmann
needed
some
air.

Once
upon
a
time,
the
promise
of
a
divided
life
held
some
appeal.
Mike
owned
a
lucrative
business
turning
digital
graphics
and
animations
into
branded
visuals
for
clients
like
Louis
Vuitton,
Apple
and
Justin
Bieber.
The
money
he
earned
from
those
productions
allowed
him
to
live
in
the
McMansion
suburbs
outside
of
Charleston,
South
Carolina.
He
fit
comfortably
there
into
the
patterns
of
home,
work,
and
hobby.
He
was
popular
with
the
neighbors,
a
plucky
midwestern
transplant
with
a
wide
smile,
a
sailor’s
mouth,
and
a
heart
of
gold.
He
would
sometimes
rant
about
politics,
but
otherwise
focused
on
family,
sitting
pretty
in
a
large
home
overlooking
the
palmetto
trees.
Mike
understood
the
value
of
compartmentalization,
because
his
parents
taught
him
midwestern
manners
and
the
importance
of
staying
reserved
in
the
middle-class
Wisconsin
village
where
he
was
born.
So
he
kept
his
more
libidinal
thoughts
inside
a
computer
running
so
hot
that
it
needed
to
be
stored
in
the
bathroom
on
a
wood
platform
over
the
tub,
near
a
jury-rigged
industrial
A/C
unit
that
vented
its
heat
into
the
attic.

The
computer
expended
its
vast
amounts
of
energy
trying
to
contain
Beeple,
the
internet
crap
monster
responsible
for
Winkelmann’s
cult
online
following.
He
adopted
the
name
in
2003,
after
a
1980s
toy
that
looked
like
the
abandoned
love
child
of
Sasquatch
and
Chewbacca,
with
light
sensors
that
triggered
its
blinking
nose
and
squeaky
voice
whenever
its
eyes
were
covered
by
a
hand.
Winkelmann
had
just
graduated
with
a
computer-science
degree
from
Purdue
University
in
Indiana,
but
he
found
programming
“boring
as
sh*t.”
The
22-year-old
was
more
interested
in
shooting
narrative
short
films
through
a
webcam
than
working
for
a
software
company.
The
Beeple
toy
came
to
symbolize
his
fascination
with
the
interplay
of
light
and
sound.

In
2007,
Beeple
started
a
project
that
would
eventually
make
him
famous.
The
“Everydays”
series
began
as
a
daily
drawing
habit
of
crude
little
doodles
that
seemed
to
betray
his
more
corporate,
Bill
Gates
appearance.
The
drawings
were
the
crass
products
of
a
mind
feeding
on
internet
bile
(racist
caricatures,
nude
women,
penis
jokes,
political
satire)
and
tutored
by
magical
realism
(family
portraits,
animal
studies,
Jesus
smoking
cigarettes,
Hillary
Clinton
wearing
gold
teeth).
A
year
later,
Beeple
switched
to
Cinema4D,
an
animation
software
that
allowed
him
to
manipulate
three-dimensional
space.
For
the
kid
who
spent
hours
at
Toys
“R”
Us
playing
a
demo
of
Super
Mario 64
on
the
new
Nintendo
console,
it
was
a
dream
come
true
to
create
realistic
worlds
on
a
computer.
But
it
wasn’t
until
around
2011
that
he
started
fully
utilizing
the
program
to
experiment
with
bright
colors
and
blurry
shapes
with
names
like
Synthetic
Bubblegum
Tittufux.
Around
the
same
time,
Beeple
started
releasing
music
videos
made
with
Cinema4D
as
free
source
material
for
creative
professionals;
the
artist
understood
how
popular
his
creations
had
become
only
when,
on
a
family
vacation
to
Hong
Kong,
he
saw
one
of
his
works
projected
outside
a
Hard
Rock
Cafe.

A
recognizable
style
finally
emerged
in
2017,
when
Beeple
fully
articulated
his
fascination
with
tech
dystopias.
Importing
digital
assets
from
other
websites
allowed
him
to
createmore
detailed
scenes
in
only
a
couple
hours.
His
imagination
exploded
with
skyscrapers
stacked
atop
cargo
containers,
Santa
Claus
clones
brawling
to
the
death,
and
cultists
worshipping
an
original
Macintosh
computer.
Celebrity
sightings
abound
in
these
nihilistic
tales
of
the
future:
Donald
Trump’s
head
opens
to
reveal
a
burger
brain;
Mickey
Mouse
holds
a
machine
gun;
and
Buzz
Lightyear
lactates
in
the
park.

See
also:



Beeple
Sold
Out.
So
What?

All
that
chaos
was
contained
in
Winkelmann’s
computer,
sitting
on
a
desk
with
its
cables
running
into
the
bathroom
hotbox.
His
home
office
was
largely
undecorated,
with
beige
carpeting,
Walmart
bookshelves,
and
two
65-inch
screen
televisions
that
played
CNN
and
Fox
News
on
mute
throughout
the
day.
He
was
neither
the
first
artist
to
adopt
lowbrow
culture
(Marcel
Duchamp
beat
him
there
by
nearly
a
century
when
he
exhibited
a
signed
urinal
in
1917)
nor
the
first
to
immerse
himself
in
mass
media
(Andy
Warhol
and
his
silkscreens
of
Marilyn
Monroe
might
like
a
word).
What
made
Beeple
special
was
his
evangelism
for
digital
art,
his
embodiment
of
the
internet’s
tendency
toward
dark
absurdism,
and
his
eagerness
to
build
an
economy
around
it.
He
had
already
cultivated
a
network
of
nearly
two
million
followers
on
Instagram,
and
artist
friends
were
repeatedly
bugging
him
to
start
releasing
NFTs.
Why
not
try
something
new?

Beeple
had
everything
to
gain
and
nothing
to
lose.
In
late
October
2020,
days
before
the
presidential
election,
he
released
three
artworks
on
the
NFT
marketplace
Nifty
Gateway.
One
piece
was
called
“Politics
Is
Bullshit,”
featuring
a
diarrheic
bull
tattooed
with
an
American
flag
with
a
Twitter
bird
perched
upon
its
neck.
The
initial
offer
for
this
edition
of
100
images
was
just
$1.00
each.

“If
you
need
extra
convincing
from
some
BS
artist’s
notes
wether
you
want
to
spend
a
dollar
on
this
i
will
punch
you
in
the
god
damn
face,”
Beeple
wrote
about
the
offering
in
the
lowercase,
typo-ridden
idiom
of
internetspeak.
“Smash
the
buy
button
ya
jabroni.”

Poof.
All
gone.
Sold.
The
two
other
NFTs
offered,
including
one
from
a
video
series
called
Crossroads,
went
for
$66,666.66
each.
Even
with
such
a
devilish
price
–
decided
upon
with
the
whimsy
of
a
speculative
market
willing
to
spend
whatever
–
Winkelmann
could
identify
his
salvation
in
the
metaverse.
The
most
he
had
ever
made
from
his
artworks
was
$100
for
a
small
print.
Now
the
artist
saw
a
potential
avenue
for
financializing
his
digital
art,
one
that
built
upon
the
lucrative
market
for
online
collectibles
that
companies
like
Dapper
Labs
and
Larva
Labs
had
started
in
2017
with
the
release
of
CryptoKitty
and
CryptoPunk
NFTs.
Executives
behind
those
products
had
predicted
that
digital
art
would
find
online
buyers,
and
within
the
two-month
period
from
November
to
January
2018,
CryptoKitties
made
$52
million.
Mack
Flavelle,
a
founder
of
the
CryptoKitties
project,
pointed
out
why:
“There’s
not
that
much
that
people
can
do
with
cryptocurrency,”
he
told
the
New
York
Times
reporter
Scott
Reyburn
at
the
time.
“We
gave
them
something
fun
and
useful
to
do
with
their
Ethereum.”

Winkelmann’s
success
seemed
to
fulfill
the
prophecy
that
individual
artists
would
benefit
from
the
cryptoeconomy.
But
the
business
developers
behind
crypto
companies
were
looking
for
the
kind
of
legitimization
that
no
amount
of
advertising
could
attain,
and
collectibles
by
themselves
felt
like
little
more
than
a
bubble.
They
wanted
the
approval
of
legacy
companies.

They
wanted
permanence.
They
wanted
cultural
capital.

In
2017,
Christie’s
made
a
Renaissance
painting
the
marquee
lot
in
their
November
sale
of
postwar
and
contemporary
art.
The
anachronism
was
supposed
to
convey
the
immediacy
of
the
artwork’s
appeal,
even
if
art
historians
were
more
skeptical
about
its
authenticity;
nevertheless,
the
auction
house
described
Salvator
Mundi
as
a
genuine
Leonardo
da
Vinci
painting,
and
it
sold
for
a
record
$450.3
million
to
Saudi
crown
prince
Mohammed
bin
Salman.
The
price
overtook
the
previous
benchmark,
set
by
a
Picasso
painting
in
2015,
by
almost
triple.
Gasps
from
the
salesroom
confirmed
the
event
as
peak
spectacle,
made
even
more
ridiculous
in
the
coming
years,
as
Salvator
Mundi
remained
locked
inside
the
crown
prince’s
yacht;
he
refused
to
exhibit
the
painting
publicly,
allegedly
because
he
feared
that
museums
might
downgrade
the
work
as
belonging
to
a
Leonardo
assistant
instead
of
the
master
himself.

Restructuring
continued
in
2020,
as
Christie’s
announced
that
it
would
merge
its
impressionist
and
modern
and
contemporary
art
departments
into
one
office.
“Our
clients
don’t
think
in
categories
anymore,”
Guillaume
Cerutti,
chief
executive
at
the
auction
house,
told
reporters
at
the
time.

The
decision
came
at
a
time
when
impressionist
and
modern
sales
were
performing
far
below
their
postwar
and
contemporary
competitors.
Combining
the
departments
would
dump
collectors
into
one
pool,
changing
the
dynamics
of
the
market
and
pushing
tastes
toward
the
present.
It
suddenly
seemed
that
the
most
expensive
artworks
had
paint
dripping
off
the
canvas;
the
artists
were
oftentimes
women
and
people
of
color,
and
they
were
in
their
30s
and
40s
–
shocking
for
an
industry
that
had
exclusively
prized
dead
white
men
for
the
majority
of
its
existence.
Sales
of
art
sold
within
three
years
of
its
creation
date
grew
1,000%
over
the
past
decade
to
almost
$260
million.

Ironically,
the
arrival
of
the
ultra-contemporary
market
occurred
around
the
same
time
that
Christie’s
announced
that
its
top
lot
for
the
“20th
Century
Evening
Sale”
in
October
2020
would
be
the
remains
of
a
Tyrannosaurus
rex,
nicknamed
Stan,
which
ended
up
selling
for
$31.8
million,
the
most
ever
paid
for
a
fossil
at
the
time.

Many
employees
were
bitter
about
the
changes;
they
rolled
their
eyes
at
the
little
anachronisms
that
had
become
headliners.
It
was
a
successful
marketing
gimmick
by
the
bigwigs
to
grab
attention
in
a
moment
when
the
pandemic
economy
seemed
on
the
verge
of
daily
collapse.
Those
who
joined
the
auction
house
to
nerd
out
on
art
history
hated
this
new
approach,
but
others,
with
a
sense
for
business,
thrived
in
the
controlled
chaos.

See
also:



Robert
Alice
Made
NFT
History,
Now
He’s
Writing
About
It

“I
have
always
felt
like
I
am
living
in
the
theater
of
the
absurd,”
Davis
later
confided
in
me.
He
relished
the
ridiculous
nature
of
his
industry.
The
auction
world
was
a
system
of
meaningless
sales
records,
an
illusion
of
competition
that
often
boiled
down
to
a
handful
of
rich
men
who
all
knew
one
another
competing
over
the
bragging
rights
of
ownership.
Connoisseurship
was
dead.
Provenance
was
a
mirage.
Dinosaur
bones
were
being
sold
next
to
Rothko
and
Picasso
paintings.

“All
I
know
is
that
I
know
nothing,”
Davis
said,
adding
that
the
motto
was
actually
a
paraphrase
of
something
Socrates
once
said
and
a
lyric
from
a
song
called
“Knowledge”
by
the
California
punk
band
Operation
Ivy.

So,
when
the
salesman
considered
all
the
strange
circumstances
surrounding
him,
auctioning
an
NFT
sounded
perfectly
reasonable.
“It
will
be
fun
and
a
little
weird,”
he
predicted.
The
auction
was
less
than
two
months
away,
and
everyone
supporting
the
NFT
sale
had
something
to
prove.
Meghan
Doyle,
a
researcher,
and
Ryoma
Ito,
the
chief
marketing
officer,
started
working
around
the
clock,
feeling
pressure
to
create
the
perfect
auction.
But
the
most
important
detail
was
still
missing:
what
was
Beeple
going
to
make?
The
artist
had
originally
suggested
one
of
his
“Everydays”
to
commemorate
14
years
of
working
on
the
project.

“Cool,
but
maybe
not
as
epic
as
it
should
be,”
Doyle
said,
declining
the
proposal.

Winkelmann
returned
with
a
new
idea.
“I
had
hit
this
perfect
milestone
in
this
massive
project,”
he
remembered.
“And
I
had
just
happened
to
hit
5,000
days
of
making
art.”
Instead
of
offering
a
single
work,
he
decided
to
combine
everything
he
had
created
over
the
last
fourteen
years
into
a
single
composite,
sold
as
an
NFT.

“He
came
back
to
us
with
a
magnum
opus,”
Doyle
said.
“With
that
image
in
hand,
we
were
able
to
rally
the
support
that
we
needed
to
develop
content
around
the
piece
and
get
advertisements
in
the
newspaper.
We
had
a
complete
story,
a
complete
picture.”

However,
Ito
found
the
level
of
involvement
from
Christie’s
marketing
department
lacking.
Understanding
the
stakes
of
this
auction
for
his
company,
he
started
trying
to
make
his
own
luck
through
outreach
with
private
collectors
–
“whales,”
as
they
are
called
in
the
crypto
community.
Vignesh
Sundaresan
was
one
of
the
first
names
on
his
list.

In
January,
Sundaresan
could
be
found
on
the
virtual
disco
floor
with
a
champagne
glass
floating
about
the
head
of
his
digital
avatar.
He
was
partying
hard
in
the
metaverse
to
celebrate
his
$2.2-million
purchase
of
twenty
Beeple
NFTs
and
the
opening
of
a
gallery
that
he
had
commissioned
Web
architects
to
build
in
the
online
world
of
Origin
City.
Back
then,
he
was
operating
under
a
mysterious
persona
named
MetaKovan,
which
translates
from
his
native
Tamil
language
into
“King
of
Meta.”

Sundaresan
was
a
serial
entrepreneur
in
the
crypto
industry;
he
had
gained
his
affinity
for
decentralized
finance
after
a
childhood
in
the
Indian
city
of
Chennai,
where
he
dreamed
of
becoming
the
next
Steve
Jobs.
He
was
born
there
in
1988,
and
came
of
age
alongside
the
World
Wide
Web,
which
had
been
released
the
following
year.
Then
there
were
a
series
of
false
starts,
including
the
creation
of
“Bitcoin
ATMs,”
which
enabled
users
to
deposit
physical
cash
and
receive
crypto,
and
a
trading
platform
called
Lendroid,
which
blew
through
its
$48
million
in
funding
within
two
years.

In
2019,
Sundaresan
started
investing
heavily
in
digital
properties,
buying
a
digital
representation
of
a
diamond-studded
Formula
One
car
for
an
online
racing
game,
NFT
artworks
and
hundreds
of
acres
in
the
digital
real-estate
market.
A
year
later,
he
started
using
the
name
MetaKovan,
which
he
describes
as
his
“exosuit”
created
for
“building
the
metaverse.”

At
the
virtual
party
in
January,
Sundaresan,
now
33,
unveiled
a
fund
called
Metapurse
for
investing
in
NFTs.
The
20
Beeple
artworks
that
he
had
purchased
were
bundled
into
a
single
asset
called
B.20,
which
was
then
fractionalized
into
ten
million
tokens.
Buyers
of
the
tokens
were
told
that
this
would
denote
ownership
over
the
metaverse’s
first
large-scale
public
art
project.

“We
were
inspired
by
the
idea
of
not
only
being
able
to
own
historic
artwork,
like
the
Mona
Lisa,
but
also
being
able
to
own
the
museum
it
was
displayed
in,
and
then
sharing
that
ownership
and
experience
with
the
public,”
the
company
said
in
its
newsletter.
“Making
money
with
art
is
fairly
simple
and
not
very
imaginative.
What
we
want
to
do
is
to
decentralize
and
democratize
art.”

Ito
had
been
watching
Sundaresan
for
a
while;
he
understood
how
the
crypto
millionaire
operated
and
that
he
had
an
affinity
for
the
guttural
sci-fi
fantasies
that
Beeple
was
selling.
More
important,
MetaKovan
wanted
to
leverage
NFTs
as
a
financial
instrument.
He
was
exactly
the
kind
of
person
who
might
want
to
send
a
message
about
the
power
of
digital
art
by
spending
millions
on
an
image.

Gradually,
Sundaresan
was
coaxed
into
the
process.
He
had
some
initial
worries
about
going
through
the
Christie’s
“know
your
customer”
process,
an
anti-money-laundering
rule
that
ensures
that
companies
keep
records
on
the
essential
facts
of
their
buyers
and
sellers.
He
expressed
his
reservations
to
Ito,
fearing
that
he
would
be
unmasked
as
MetaKovan
because
of
the
digital
identity
trail.
But,
eventually,
he
came
to
accept
that
this
was
a
risk
involved
in
doing
business
with
an
established
auction
house,
even
if
the
majority
of
bidders
remain
anonymous
to
the
public
unless
they
choose
to
reveal
themselves.
He
was
joined
by
his
cofounder
at
Metapurse
–
another
Indian
crypto
investor,
Anand
Venkateswaran
–
who
played
more
of
a
backseat
advisory
role
in
the
acquisition
process.

The
marketing
juggernaut
at
Christie’s,
which
had
initially
been
slow
to
support
the
sale,
finally
kicked
into
action.
Winkelmann’s
NFT
idea
had
been
rebranded
into
an
event
with
its
own
subtitle,
like
an
Avengers
movie
–
“Everydays:
The
First
5000
Days.”
Doyle
was
receiving
increasing
numbers
of
emails
from
crypto
collectors
expressing
their
interest
in
placing
a
bid.
The
artwork
had
been
published
without
a
price
range;
instead,
the
auction
house
chose
to
write
“estimate
unknown,”
a
cheeky
nod
to
the
usual
“inquire
for
estimate”
phrase
implying
that
anyone
needing
to
ask
was
too
poor
to
buy.

“Estimate
unknown.”
That
was
the
truth.
Winkelmann
had
prepared
himself
for
the
NFT
to
sell
for
somewhere
near
$1
million.
Ito
had
the
same
gut
feeling.
It
wasn’t
until
a
few
days
before
the
sale,
as
reporters
started
asking
if
they
were
prepared
to
sell
for
tens
of
millions,
that
the
team
realized
something
profound
was
about
to
happen.

“Noah
looked
at
me
and
said,
‘We
are
about
to
throw
a
grenade
on
the
art
world,’
”
Winkelmann
recalled.

Compliance
officers
and
executives
at
Christie’s
were
still
debating
the
financial
terms
of
the
deal.
The
original
plan
was
for
the
house
to
accept
cryptocurrency
for
the
hammer
price
but
require
that
its
own
premium
fee
be
paid
in
dollars;
however,
sale
organizers
worried
that
such
an
arrangement
would
discourage
crypto
whales
from
participating
in
the
auction.

Success
needed
to
be
measured
with
the
company’s
longterm
goals
for
growth.
Accepting
cryptocurrency
would
invite
scrutiny
from
the
press,
traditional
collectors
and
government
regulators;
it
could
also
be
a
financial
risk,
depending
on
the
volatile
prices
of
bitcoin

(BTC)
and
ether

(ETH).
What
ultimately
became
clear
to
decision
makers
was
that
nothing
about
this
sale
could
be
half-assed.
Big
money
often
requires
big
leaps
of
faith.

“A
decision
was
made
at
the
highest
levels
to
take
the
whole
thing
in
cryptocurrency,”
Doyle
said.
“The
amount
of
cogs
in
the
wheel
for
that
to
happen
was
truly
mind-blowing.”

The
gamble
worked,
and
the
tidal
waves
of
inquiries
about
the
Beeple
sale
never
stopped.
Sundaresan
had
already
confirmed
his
participation
in
the
auction,
but
what
nobody
expected
was
another
competitor
willing
to
participate
in
one
of
the
most
furious
online
bidding
wars
that
the
auction
house
had
ever
seen.

On
February
25,
2021,
the
auction
began
with
a
$100
opening
bid.
Within
eight
minutes,
the
price
had
reached
$1
million.

“I
was
shocked
that
our
website
could
handle
it,”
Doyle
said.
“I
had
never
seen
that
happen.”

The
auction
had
already
reached
the
threshold
for
bidders
at
which
the
prospective
buyers
needed
to
be
cleared
financially,
often
with
letters
of
references
from
the
crypto
exchanges
supporting
their
transactions.
There
were
nearly
two
dozen
hopeful
buyers
at
that
point,
18
of
whom
were
entirely
new
to
Christie’s.
Most
were
millennials.

See
also:



What’s
Next
for
Beeple
After
Dizzying
$69M
NFT
Sale?

“It
was
a
psychotic
amount
of
bidding,”
Davis
thought
as
his
phone
started
blowing
up
with
messages.
His
boss,
Alex
Rotter,
head
of
20th-and-21st-century
art,
even
took
to
social
media
to
brag
about
the
sale.
He
posted
a
Beeple
artwork
to
his
Instagram
featuring
a
superpowered
Homer
Simpson
lobotomizing
his
son,
Bart
Simpson,
with
laser
vision.

“Beeple
leads
the
way,”
Rotter
captioned
the
image.
“It’s
all
happening.”

This
excerpt
has
been
lightly
edited.