NFTs are increasingly getting popular in the crypto world, with famous investors such as Chamath Palihapitiya and Mark Cuban being very optimistic about their potential.
And recently, the use of NFTs in the art world just got a lot more buzz with widespread acceptability: following the sale of a NFT-based artwork by for more than $69.3 million on Thursday. Christie's, which sold the artwork, emerged as the first major auction firm to sell a completely digital, NFT-based work of art.
What is the meaning of a NFT?
NFTs, also called non-fungible tokens are special cryptocurrency tokens used as a representation of assets. The asset, in this case, is a digital artwork. You can buy and sell NFTs, however since they operate on blockchain technology, validity and ownership of the asset they signify is traceable.
Hence, when an artist places an NFT-based work of art up for sale, the buyer would pay for a special token that signifies the asset (the work of art) and can then assert ownership and authenticity of the digital artwork via blockchain. NFT is thus a blockchain-based technology that empowers artists with the right to claim ownership and receive compensation for digital works of art.
Case Scenarios of NFTs in the Art World
The Beastly Ballers
Connecticut-based artist Ryan Maloney had anticipated a widespread launch of his most recent work - Beastly Ballers; which is a series of collector cards that feature cartoon figures dressed in football gear. Initially, the illustrator was hoping to package the cards through a Chinese printer; after which he'd market and sell them online at the price of $4.99 for a pack of 10.
Rather, Maloney decided to skip the physical product in its entirety. He listed his card graphics on OpenSea - an online marketplace - as non-fungible tokens or NFTs, the digital assets that have set off a gold rush in the digital art community. Maloney had followed the growth of the technology and chose to try it out.
He started to pile up bids after one or two days. A particular card, which has the image of a yeti called Yeta wearing pads and a helmet, sold for $85. Overall, he has raked in over $700 in the sales of 14 cards. For the average artist, that's an impressive haul, and more than Maloney would have realized had he chosen the traditional way. Maloney says, "Artists are always looking for ways to make money off of their work. Once the word got out on crypto art, the gold rush really began."
Christie's Auctioning of Beeple NFT Art
On Thursday, the 255-year-old British auction firm, Christie's, concluded the sale of its first-ever digital-based artwork, a composite comprising 5,000 pieces created within the span of several days by the artist called Beeple. The bidding for this work began at $100 on the 25th of February and the eventual price tag was a jaw-dropping $69.3 million. As can be seen in Maloney's case, the potential of NFTs extends greatly beyond the incredibly eye-popping prices of the hammer fixed at fancy auction areas.
The NFT Market: Investments and Future Trends
The NFT market has drawn the attention of a lot more NFT investment and buzz than other applications of blockchain technology to authenticate art. Companies such as Codex, Artory, and Verisart among other startups provide digital certificates of authenticity for sculptures and paintings, considered more reliable than the conventional paper documentation all thanks to the immutability of blockchain technology. It would however be erroneous to concentrate on the utopian potentials of crypto art while neglecting the chain of tech investments that are sustaining it now. It's best to focus on both.
According to Billionaire tech guru Mark Cuban blockchain, smart contracts and NFTs will be the future of business. In a January blog post, Cuban wrote "This generation knows that a smart contract and the digital goods it reflects or a CryptoAsset are a better investment than old school see, touch or feel uses."
NFTs introduce to digital art a limited-version or one-of-a-kind quality that has become missing in the post-repost, copy-paste era of the internet. Every artwork is linked to a proof of ownership that is stored on a blockchain - the decentralized, distributed ledgers most usually associated with several cryptocurrencies including Bitcoin. The authentications, which can be imprinted in music, videos, images and other digital materials, distinguish the original. Although several copies may be rampant all over the internet, however, just a single person will actually have claim and ownership over the NFT behind it.
In all, NFTs are essential because they provide solutions to longstanding challenges in the digital world: ownership and reward. The web has grown immensely up to the stage we know today as a result of the fact that data could be duplicated easily and user-generated material proliferated on the internet. TikTok users and YouTubers have accumulated massive followings by offering contents, which are in some cases professionally produced and costly to create. Napster dominated the music industry because it wiped out the business model during a time when labels and musicians least expected it.
NFTs provide the platform for digital artists to put their masterpieces up for sale with the guarantee of originality and uniqueness. NFTs serve as an avenue of connection between artists and fans. At Muse. we are assertive that art is just the starting point of this wonder; and very soon everyone is going to embrace the significance of the NFT innovation.