NFT or non-fungible token has recently become one of the most popular buzzwords in the art world. With millions of dollars in sales, such as from Beeple, many question whether NFTs will become a major trend in the future of art.
NFT is a new way of investing in art or digital goods, such as digital art, digital painting and drawing, video clip, GIFs, tweets, collectibles, crypto-collectibles, gaming items, digital real estate, metaverses, and other crypto assets.
In March 2021, a digital artwork by Mike Winkelmann, the digital artist known as Beeple, was sold at the famous Christie’s auction house for $69.3 million. The work Everyday: The First 5000 Days, is a collage of 5000 digital images, created by Beeple over 5,000 days, from May 2007 to January 2021, for his Everyday series. This sale made his artwork the third-highest price paid by a living artist, after Jeff Koons and David Hockney.
Following the Everyday’s: The First 5000 Days sale at Christie’s, rival auction house Sotheby’s also jumped on the bandwagon and announced its own partnership with the anonymous artist Pak, showing that even though traditional auction houses may not understand the genre, they do understand its monetary and financial potential.
One of the recent transactions that caused headlines, was the sale of the first-ever tweet from Jack Dorsey, CEO, and Co-founder of Twitter. The tweet that read “Just setting up my twttr” was published on March 21, 2006, and was auctioned off for $2.9 million on March 6 of this year, through the Valuables platform – which allows its users to buy and sell NFT representing tweets.
Another recent transaction that gained much public interest was the auction of Nyan Cat on the Foundation platform. Nyan Cat is a cartoon that shows a cat flying through space and leaving a trail of rainbows. Chris Torres, the creator of the Nyan Cat meme, sold it in February 2021 for up to $580,000.
Basically, you can buy or sell digital art tied to any digital file, from a digital painting or drawing to a piece of music.
One might think: what is the point of buying it if I can simply capture or download it? True. But NFTs are digital assets where ownership is recorded on a blockchain (Ethereum, Wax, Flow, Binance Smart Chain, and Tezos). It is the same as having an original painting by Claude Monet or Leonardo da Vinci’s Mona Lisa on your wall while several copies are hanging in the homes of people all over the world. However, the original Monet or Leonardo da Vinci piece is only one and is therefore exceptional. It is the same as we can say with digital art and NFTs. An artist or NFT creator may even create several copies of the same item, but only one of them is considered and certified as original.
- What does NFT mean?
- What is NFT art or crypto art?
- How did NFTs come about?
- Why do artists use NFT?
- Is NFT good for artists?
- How to create an NFT?
- Where can I buy NFTs?
- Popular NFT marketplaces to buy and sell digital art
- Why are NFTs controversial?
What does NFT mean?
NFT stands for non-fungible token. NFTs are best understood as digital files combined with proof of intellectual property and authenticity recorded on the Ethereum Blockchain, like a deed or a notary’s document.
Cryptocurrencies, such as Bitcoin and Ethereum, exist on a blockchain – a fraud-proof distributed ledger. So, like fiat currencies, cryptocurrencies are also “fungible,” meaning that one Bitcoin (BTC) has the same value as another Bitcoin (BTC). In essence, non-fungible tokens (NFTs) have unique valuations set by the highest bidder, just like fine art or a work by Picasso.
When buying NFTs, tied to digital artwork, tweet, GIF, text document, or any other digital file, the buyer receives an NFT token – an encrypted code containing the artist’s signature. Therefore, the digital token becomes a kind of atura digital signature or rather a certificate of authenticity.
Thus, the buyer of the digital asset becomes the official owner of the asset, where the transaction history is stored in the blockchain and can be verified by everyone in real-time. The NFT token can be resold at a considerable profit, and as a result, the title of the digital asset can be transferred to the next collector or buyer.
What is NFT art or crypto art?
Just as Decentralized Finance (DeFi) mimics the financial products of banks – loans – NFTs mimic the world of art galleries, stores, auction houses, and museums. Without expensive and risky mediators.
This is possible with smart contracts born on the Ethereum network. NFT platforms bring the entire NFT economy to life by connecting a content creator and artist directly to a buyer or collector. This makes it much easier for both parties to enter the NFT market, thus eliminating the usual barriers to entry.
How did NFTs come about?
Although some enthusiasts trace the origin of NFTs to colored coins (colored Bitcoins) in 2012, it was in 2017 that they became popular, when studio Larva Labs developed the CryptoPunks – 10,000 unique collectible characters traded via non-fungible tokens (NFTs). Each Punk came with proof of ownership stored on the Ethereum blockchain. The Punks are the first NFTs of the ERC-721 standard on the Ethereum network. ERC-721 is a standard that currently underpins most digital artwork and digital collectibles.
Why do artists use NFT?
Blockchain technology and non-fungible tokens (NFTs) offer artists and content creators a unique and exclusive opportunity to monetize their digital products and paintings. For example, artists no longer need to rely on art galleries, stores, museums, or auction houses to display and sell their artwork. Instead, the artist can sell it directly to the collector or buyer as an NFT, which also allows them to keep a larger share of the profits.
But artists are not the only ones using NFTs. Brands like Taco Bell and NBA Top Shot have also entered the world of non-fungible tokens.
Taco Bell became the first food brand to enter the NFT space. Tacco bell’s crypto art sold out in half an hour, and bids were made through the Rarible platform, with the highest bids reaching 1.5 Ether (ETH) wrapped in WETH (Wrapped ETH) – equivalent to $3,700.88.
The NBA has launched its own NFT platform, NBA Top Shot – a way to buy, collect and sell digital collectibles in the form of collectible cards embedded with game highlights from North America’s top professional basketball league.
WePlay Collectibles are for people who want to be part of Esports events and show that they like players and talent in a different way, in addition to merchandising. The WePlay Collectibles are part of a platform, where you can buy items with NFT technology – both digital and physical. These are rewards and items associated with a specific tournament. Find more information about the platform and NFTs at weplaycollectibles
Is NFT good for artists?
NFTs are great for artists and content creators for 4 reasons:
Before the existence of Blockchain technology, there was never in art history a way to own something completely digitally. Artists and content creators distribute videos, images, digital products, music and motion graphics, reusing and reposting them on social media, but there was not the opportunity that NFT provides to completely take ownership of a digital file or art. The rise of NFT tokens completely changes the landscape, allowing content creators and artists the authority to create digital artworks, to sell or display them in online galleries as they wish.
In contrast, the NFT artist even retains copyright ownership of his artwork, so he can continue to create and sell digital copies.
A new way to generate passive income online
NFT or crypto art is an entirely new way of categorizing digital artworks that allows content creators to monetize their digital works and products and generate income online. There is no doubt that NFT is a faster and more affordable process for NFT artists and creators to produce artwork and reap the rewards instantaneously for their creativity.
NFT technology makes it easy for artists to set up royalties, which means that every time the artwork is sold on the secondary market, the artist can receive 5-10% of all future sales, but of course, this depends on which platform the artist is using.
A global reach
In the past, the world of physical artwork, collecting and selling, was something that essentially took place in physical spaces relative to physical art. Traditional collectors or artists usually made money from events, gallery exhibitions, and museums. With the rise of the NFT trade means that art collecting can literally move to online galleries and NFT marketplaces, opening up to many artists, on an unprecedented global scale.
Like virtual social platforms, NFT platforms grant NFT artists immediate access to global audiences. And often find a good active user base, which helps artists gain exposure in the NFT marketplace.
How to create an NFT?
Anyone with a computer can create an NFT. The first thing you need to sell NFT is to create a “Crypto Wallet” (Metamask, Trust Wallet, and Coinbase Wallet are the most recommended). You will also need to pay the gas fees to create your first NFT. You will then need to connect your Crypto Wallet or digital wallet to one of the NFT marketplaces.
NFT platforms allow artists and content creators to upload their digital artwork and digital products and list them for sale online at a fixed price or auction as NFT. You can compare NFT platforms like eBay or Etsy – except they are exclusively for NFTs. The most popular include OpenSea, Rarible, SuperRare, Foundation, and Nifty Gateway.
Another thing you should consider is when submitting your artwork and defining how many you will put into circulation. You can choose to set it up as edition 1/ 1, which means that there will only be one artwork on the blockchain to be sold, or you can decide to create a digital collection with multiple copies. This is a big decision that you can’t get behind because – like conventional or traditional art forms – the number of original editions will directly affect its value, which means that 1/1 edition works are more valuable.
Where can I buy NFTs?
NFTs can be bought and sold on a wide range of platforms and markets, and your choice will depend on what you wish to buy. For example, if you want to buy baseball cards, the best option would be to go to a site like “digitaltradingcards.com”, but other marketplaces sell digital pieces of all categories like crypto-collectibles, virtual real estate, Sports, GIFs, tweets, metaversos, DeFi, etc. You will need a wallet specific to the platform or marketplace you are buying on and must fill it with the required currency, usually Ether (ETH).
Due to the high demand exclusive, NFTs are usually released as “drops” rather than fixed prices (just like in the music industry when the artist announces the release date of their album or tour). This means there will be a big rush of buyers and collectors eager for that artwork when the NFT drop starts, so you need to be registered on the platform and have your wallet loaded with Ether in advance.
Popular NFT marketplaces to buy and sell digital art
As a buyer or collector, you also need a wallet set up, and deposit Ether in it to later connect to one of the marketplaces below to finally buy the digital tokens:
This P2P platform is the first and largest provider of “digital rare and collectible items”. To start collecting unique items, all you need to do is log in with a Metamask Wallet or Coinbase Wallet to browse the existing NFT collections. You can also filter the items by sales volume to discover new NFTs.
Similar to OpenSea, Rarible is also an open marketplace that allows digital artists and content creators to upload their works and sell NFTs. This platform has a wide range of NFTs like art, music, trading cards, photography, DeFi, Punks, metaversos, etc.
Being an exclusionary platform, for you to start selling digital art on NFT, you need to receive “positive votes” or an invitation from other established creators.
On the other hand, the exclusivity of the community and the high cost of listing NFT – artists must also pay “gas fees” – means that you will need a lot of money to buy an artwork.
Why are NFTs controversial?
The controversies surrounding NFTs in particular regarding their impact on the environment are precise because they are stored on the Ethereum blockchain – a blockchain that uses the Proof of Work (PoW) system.
To keep digital assets safe the blockchain needs all the computers spread around the world to be on all day every day to solve complex mathematical problems, and this process consumes a lot of energy that is often used fossil fuels which creates a huge carbon footprint.
But Ethereum is expected to upgrade to Proof of Stake (PoS), which means the blockchain will be 99. 9% more environmentally friendly.