Collecting the Algorithm

As our digital and analog lives become more intertwined, digital objects are emerging as meaningful stores of value. From $1.5m in-game skins to verified social media checks at $12k per year, the digital space has turned into a new frontier for value. Our digital assets are becoming as significant as our physical possessions, if not more so in some cases. We believe that within the realm of digital assets, on-chain generative art offers some of the most interesting opportunities, especially for astute collectors.

Traditionally, art has been an attractive store of value for the wealthy. It's a visible status symbol, a graceful indicator of wealth, and a testament to the collector’s refined taste. Collecting art has been around quite literally since the beginning of recorded history. It’s human nature to covet and collect highly valued rare things.

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Digital art has the promise to become orders of magnitude bigger as a store of value.

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It spans a broader range of art forms, inclusive of both traditional and new formats, including animation, 3D objects, and even abstract concepts such as code. It’s accessible to newer generations of collectors, most of whom are digitally native. And for new and existing art collectors, digital art offers the opportunity to collect meaningful artifacts of digital culture that have become pervasive in our lives.

Digital art also comes with some hard-to-ignore benefits:

Perhaps most importantly, digital art on the blockchain decouples consumption from ownership – anyone can see perfect renderings of the art, anywhere in the world, all while its ownership stays safe in the collector’s digital wallet. Compared to traditional art, where it’s commonplace to stow away valuable masterpieces in freeports for safety and tax benefits, digital art can continue to be enjoyed and propagated at internet scale with minimal risk of loss.

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While digital art is often displayed through physical prints, especially with generative art, its value is almost entirely held in the digital asset itself. This belief is reflected in the approach that many digital artists take to physical prints of their work. Matt DesLauriers, creator of the well-known generative art collection Meridians, cites for official prints:

We’re in the early days of digital art being a truly digitally ownable asset and store of value. And while digital art comes in many forms, we believe the purest art form native to the blockchain is on-chain generative art.

Generative art describes art created by rules-based systems. While the genre took root with analog computers, modern generative art is typically produced with software algorithms that have minimal dependencies and can be replicated anywhere via their code. The art that’s being collected is not just the media output, but also the system itself — i.e. the intent of the artist expressed through the algorithm.

In on-chain generative art, the artist codes generative art algorithms (e.g. Fidenza) and writes them to the blockchain. These algorithms contain multiple points of randomness to create unique outputs (i.e the individual artworks). When a collector mints a new output (i.e. the original purchase transaction), the blockchain transaction provides inputs to generate a token hash, which is then fed into the algorithm. The hashes are deterministic — a specific hash used to generate an output will always produce exactly the same output. The end result is a unique artwork that is tied to the newly minted token.

Renowned generative artist Tyler Hobbs, the force behind the famous Fidenza algorithm, writes in his frequently cited piece “The Rise of Long Form Generative Art”:

That serendipity is what makes on-chain generative art delightful.

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No one knows what the output will look like until the mint transaction is complete. The collector sees the artwork for the very first time, usually before anyone else including the artist. In the span of human history, with thousands of artistic forms, no other medium has created this dynamic of surprise and co-creation.

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The artist refines the algorithm by evaluating test outputs to see the general shape of the collection, but once the algorithm is written to the blockchain, it is out of their hands. When a collector mints, “the script output goes directly into the hands of the collector, with no opportunity for intervention or curation by the artist".^{”The Rise of Long Form Generative Art"}

The resulting on-chain generative art collection is the final set of those serendipitously minted outputs from the associated algorithm. While the artist predetermines the number of iterations allowed (i.e. supply to be created, typically 250-1,000), the universe of possible outputs is often in the millions due to the factorials of randomness that exist in the code.

While generative art has a rich history going back to the mid-20th century, it has newfound excitement in the form of on-chain long-form collections. We believe it will be the defining category for digital art on the blockchain for multiple reasons:

The blockchain plays a prominent role in the creation of the artwork

The creation transaction (“minting”) provides inputs into the deterministic hash the algorithm uses to create the output (i.e the randomness to create a unique output). The involvement of the blockchain to both secure the artwork forever and play a key role in the creation of the art itself is what makes generative art a perfect fit for the blockchain medium.

The minting collector plays a role in the creation

When a collector mints from an algorithm, they play a role in the art creation process by generating a deterministic hash that creates the unique output we see. Until the output is generated, not even the artist knows what the final artwork will look like. The provenance of the minter is forever tied to that piece and viewable on the blockchain. If the mint creates a famous output, the collector may become notable from the output they helped create.

The art can live forever

The code lives entirely on-chain and the art can be easily reproduced as long as the underlying blockchain lives on. Durability is also why we care about technical features such as smart contract quality, the platform the work lives on (e.g. Art Blocks), and the resilience of the underlying chain. It's why we prefer assets on Ethereum and advocate for on-chain art that relies on as few dependencies as necessary.

The art can be perfectly reproduced at any size

The only thing necessary to reproduce the artwork for on-chain generative art is a modern browser. Many generative art platforms, led by Art Blocks, even make it a requirement for collections to scale to any size in crisp resolution. Anyone, anywhere can display any piece of generative art at any size and scale, whether that’s a high-resolution print, a three-story screen, or anything in-between.

Digital tokens enable “collecting the code”

Historically, collectors of digital art work have only been able to collect the visual work. Collecting the art in digital token form allows collectors to collect a piece of the algorithm itself, as the token lives on a smart contract containing the generative script. This speaks to one of our key beliefs that collecting generative art is as much about collecting the code (the system) as it is about the output.

It’s one thing to understand why on-chain generative art is significant, but it’s another to jump into collecting it. Collecting any piece of art should always start with a visceral connection, usually in something that’s aesthetically pleasing. From there, there are a number of things to consider before collecting generative art:

Learning about the artist behind the collection, their history, and the unique narrative that underscores their work, is critical in understanding the significance of the work. Many notable artists in generative art started their journey years ago and have been pioneers well before NFTs:

Even with newer artists, spending time getting to know them helps unveil their motivations, sources of inspirations, and their distinctive style. Connecting with the artist is also one of the core aspects that makes the collecting journey enjoyable. It helps foster a deeper appreciation for the art.

Understanding the narrative and context behind the artwork is equally important as understanding the artist.

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For example, Chromie Squiggles, created by Art Blocks founder Erick Calderon, was designed to demonstrate the full potential of on-chain generative art. Erick, better known by his pseudonym “Snowfro”, was an early crypto enthusiast and one of the most active early minters of CryptoPunks. The CryptoPunk claiming process allowed the minter to see exactly what piece they were creating, which led to the pivotal question for Erick: what happens if the smart contract provided a piece at random to the minter? This spark of inspiration led to the creation of what would eventually become Art Blocks.

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As project 0 on Art Blocks, Chromie Squiggles was supposed to be the “test print” project that showcased the possibilities of the Art Blocks platform. It’s since launched an entire subculture of generative art enthusiasts. And today, Squiggles sit in museums and collections around the world. They have become a significant collection as the iconic symbol for the on-chain generative art movement, in no small part because of their creator and the context of its creation.

Explicit traits are defined by the artist in the on-chain metadata. These features are on-chain and core to the algorithm. Explicit traits often provide collectors with a clear indicator of rarity. Examples of explicit traits in Chromie Squiggles include:

Implicit traits are generally defined by lore or the community. These features are usually off-chain and many times unexpected by the artist. Examples of implicit traits in Chromie Squiggles include:

Explicit traits tend to get immediate attention due to ease of visual understanding and consensus on scarcity. By contrast, implicit traits such as Harmonics are less obvious and require the collector to appreciate nuance and the culture around the collection. The narrative for these features needs to "harden" over time for them to hold significance long-term, especially since they're not in the metadata.

The communities surrounding generative art are digitally native. While they occasionally meet in person at events such as Art Blocks Marfa, they’re primarily found in Twitter discussions and Discord channels. On any given day, the #block-talk channel in the Art Blocks Discord is filled with passionate collectors and artists, sharing work they’re excited about and discussing trends and the latest collections.

Immersion into the community around a collection is helpful for keeping a finger on the pulse of the broader generative art culture as well as identifying desirable qualities in the collection by other collectors. As collectors and the community continue to appreciate a collection over time, certain traits may stand out as particularly meaningful “community traits”.

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For instance, the 'Beige' background in Ringers or the 'Night' theme in Anticyclones are two traits that have been elevated by their collector communities as highly desirable.

Within the community, the term “grails” refers to unique pieces distinguished by rarity, brought about by statistically rare traits, visual emergence, or often, a combination of both.

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Statistically rare grails are based on explicit traits defined by the artist, and are desired by the community around the collection. Some of these grails include:

Beyond the grails generated by explicit traits are the ones created out of emergence. Emergence can be described as the phenomenon where “simple rules are followed by parts of a system and unexpected results emerge from the whole system”^{Emergence and generative art}. Emergent grails are a testament to the unpredictable magic of generative art, where even the artist can't fully anticipate the end result.

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Not every algorithm will give birth to such gems, making them all the more treasured when they appear. Notable emergent grails in the history of on-chain generative art:

Each one of these is a standout piece – a grail that emerged unexpectedly to capture the collective imagination and embody the unpredictable magic of generative art.

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Admittedly, grails in notable collections are out of reach for most collectors — the rarest Fidenzas routinely have price tags exceeding $1m. Yet, understanding their importance is crucial. In a collection spanning 500 to 1,000 pieces, where most works fall within a similar price bracket, grails have their own markets. They tend to sell in OTC transactions or through auction houses, rather than over secondary marketplaces such as OpenSea. They constitute a tiny fraction of any collection, but their cultural significance combined with scarcity commands a significant amount of mindshare amongst the community and makes them highly desirable amongst the largest collectors. For example, “The Goose” is arguably considered the most notable piece of on-chain generative minted to date. It recently sold for a record high $6.2m at Sotheby’s.

The ability for the art to stay intact, which we define as durability, is an often underappreciated aspect of a generative art collection. By definition, the algorithm of on-chain generative art is recorded on-chain, has few dependencies (usually just a modern browser), and can be reproduced anywhere at any size in perfect resolution. However, there are other aspects of durability that should be considered:

One of the best ways to explain how to collect generative art is to show how we’ve thought through collecting existing algorithms. Archetype by Kjetil Golid is a standout in our collection and an algorithm that we’ve collected widely. It’s a 600 piece collection minted during the early days of Art Blocks in February 2021. Kjetil, a Norwegian creative coder, is widely respected in the on-chain generative art community. The project’s description crafted by Kjetil reads:

The collection has six explicit traits — Framed, Shading, Scene, Palette, Color Strategy, Layout — which Kjetil thoroughly defines in “Archetype 101”, his introductory piece on the algorithm. After examining each piece in the collection to learn the shape of the algorithm, we decided to focus on what we believed were the two most meaningful traits for aesthetically pleasing outputs — Palette and Layout.

Kjetil is known for his distinctive color palettes, a signature that shines through this algorithm with 42 different variations. Though color palettes are often a personal choice, we found that some truly stood out. Kjetil described how the palette trait works in his "Archetype 101" piece:

Archetype is built on the concept of rectangle partitioning, which is the act of splitting a rectangle into smaller rectangles. There are three types of partitioning: Balance (325 pieces), Order (179 pieces), and Chaos (96 pieces). We were particularly drawn to the Order type, which uses repeating partitions to create a nice pattern.

Monos are special. While color palettes decide what colors are available to use in a piece, random chance results in the rare scenario where only a single color is used (not including the frame itself). Only 8 monos exist in the 600 piece collection (1.3%). While they aren’t officially recognized as an explicit feature (i.e. in the on-chain metadata), the artist and community both recognize and appreciate them.

The grails of the collection happen at the edges of the algorithm, where some of the rarest outputs occur. For Archetypes, that includes Frameless (25 pieces; 4.2%), Corners (27 pieces; 4.5%), and Cubes (10 pieces; 1.7%). Frameless outputs are those that have no outer border, which results in a very clean edge to edge output.

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The vast majority of Archetypes have a Scene that is flat (563 pieces; 93.8%) — a flat Archetype — but the rarer Scenes are those that involve three dimensions such as Corners and Cubes.

We previously mentioned grails and what they represent within a collection. The Cube within Archetype is not only a grail within the collection, but is viewed as one of the most notable works within on-chain generative art.

Overall, if generative art is about collecting the algorithm, we feel that our collection properly represents the entire shape of the Archetype algorithm.

The best part of learning, collecting, and curating generative art is getting to enjoy the art. There’s nothing quite like living with a wonderful piece of art and seeing it every day.

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The decoupling of ownership and consumption is a major superpower of blockchain-based digital art. Compared with physical art which is often stowed away for protection or tax purposes, digital art encourages propagation. In fact, the same work can be displayed in multiple places at once, perfectly replicated anywhere in the world without complex logistics or any risk to the owner. This public exposure of art, whether through prints, digital displays, or online, is the art equivalent of “spreading the meme”. It allows others to enjoy the artwork and ultimately grows awareness and desirability for the artist and collection.

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Despite generative art’s digital nature, physical prints still remain the best display medium. They are easy to frame and mount, be customized to fit any dimension, and can even add depth from the texture of the canvas.

Digital display options are evolving, but they still have some way to go in terms of affordability and quality to entice the majority of collectors. The disparity in aspect ratios between displays and artwork further complicates their use. Nonetheless, they represent an interesting alternative for the future of art display.

As much as art has always been an attractive store of value, digital art enabled by the blockchain has the potential to be even bigger. We are in this unique transition period in human history from physical to digital, and the next generation of collectors will have grown up around the internet, code, and digital culture.

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There is a Cambrian explosion of art being created as blockchain assets. We believe that on-chain generative art will be amongst the most culturally significant works from this first era of digital art on the blockchain.

Thanks to Derek Edwards, Snowfro, Phil Mohun, Nat Emodi, Cozomo de’ Medici, Alok Vasudev, Soona Amhaz, Packy McCormick, Plutonium F, and ArtBlocksInvest for reading drafts and shaping our thinking on this piece.