ART News

NFT: What is it and Why you should pay attention to it

After digital artist Beeble sold a piece for a record-setting of $69 million at Christie’s on 11th March 2021, NFT is getting lots of attention in the art world. Critics have dismissed the NFT art craze as just the latest fashion, similar to what happened to this year’s mania of the “meme stocks” like GameStop. On the other hand, many highlight the fact that NFT can truly help digital artists who are fed up after years of creating content that generates visits and engagement only on Facebook and Instagram while getting almost nothing in return.

Let’s have a deep dive into it and find out what is it, how it works and how can be beneficial for artists.

25th March 2021 | Image Curators Advisory
Beeple, Everydays – The First 5000 Days, NFT, 21,069 pixels x 21,069 pixels (316,939,910 bytes).
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WHAT IS NFT?
NFTs, or non-fungible tokens are best understood as computer files combined with proof of ownership and authenticity. Like cryptocurrencies such as Bitcoin, they exist on a blockchain — a tamper-resistant digital public ledger. But like dollars, cryptocurrencies are “fungible,” meaning one bitcoin is always worth the same as any other bitcoin. NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.
The main difference between NFT's and other Cryptocurrencies is that each NFT is unique. You can trade a 1909 T206 Honus Wagner baseball card for a Squirtle NFT.


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HOW DOES IT WORK?
Any digital object can become an NFT, as long as it’s been “minted,” or put on the blockchain as a token. They’re sort of like trading cards, if the card was digital and pointed to the URL of a JPEG.

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information such as certificate of authenticity. It is worth noting that other blockchains can implement their own versions of NFTs.
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HOW CAN YOU CREATE NFTs?
To create an NFT, you first have to set up a wallet to store your crypto/NFTs.

There are different websites to do this, like OpenSea, Rarible, KnownOrigin and Mintable, each with their own benefits. You then need to set up an account, and start minting your NFTs. There are no fees for creating NFTs - it's only when you list them and sell them that you'll incur gas (transaction) fees.
Gas fees are a way of creating a contract for your wallet, and they authenticate your presence on the Ethereum blockchain. If you don't have any Ethereum, you'll need to purchase some via a reputable seller, in order to be able to list your NFT for sale. This guide from OpenSea is a great resource if you're looking to get involved.



Some of the most interesting uses of NFTs are in the art world, where they have been used to create works of art worth tens of thousands of dollars. In the past few years, a number of famous artists and entertainers have used NFTs to create works of art that have sold for millions of dollars.

SuperRare is a decentralised digital artwork marketplace that sells art on the Ethereum blockchain. There are two ways to use SuperRare: buy $GHST tokens and then earn them by playing games, voting, and engaging in rarity farming or simply buy digital artwork from other users using your $GHST tokens. The service also has an item called Aavegotchi, a hand-made collectible that can be stored on your Ethereum wallet. Another project called Rarible is attempting to bridge the gap between DeFi and NFT communities by launching its own token that can only be earned through active participation on the platform.

Michele Petrelli,"Iris on the phone" (627) 1/1. Available at KnownOrigin.
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WHAT ARE THE BENEFITS?
  • Sell your work easily and receive unlimited royalties.
if you’re a digital creator, they represent a way to make money off of work that might not otherwise be saleable. You can earn royalties from future sales of work in perpetuity — and it can be built right into the object itself. Unlike in the traditional art world where you may be paid in a week or a month or not at all, with NFTs you receive the funds instantly into your crypto wallet. 10% or more of the resale value instantly appears in your wallet (with most services).

  • No Shipping and Customs costs
You also avoid issues of shipping and customs, and the work can be viewed from anywhere in the world, you just need broadband.

  • (Kind of) Market Transparency
Although anyone can see the artworks and link to them or even download them, it is only owned by one person at a time. Its blockchain instantiation is a certificate of authenticity that you won’t be able to lose. This ownership, the purchase price and any subsequent owners and acquisition prices are visible and travel with the piece. This contributes to a level of market transparency that has never existed in the traditional art world.

  • You can still sell your work offline
Tokenising a work (putting it on the blockchain) does not imply a transfer of any intellectual rights. You can still print the work and show it physically. The most you have to lose is some time and a “gas” fee (fee per transaction on Ethereum).



Mad Dog Jones, Lotus Train #53/148. This edition was last sold for USD $33,333
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WHAT ARE THE DRAWBACKS?
  • You have to pay to have your work in the “market place”.
NFTs have unique valuations set by the highest bidder, just like a Rembrandt or a Picasso. If you want to sell your work as NFTs, you have to sign up with a marketplace, then “mint” digital tokens by uploading and validating your information on a blockchain (typically the Ethereum blockchain, a rival platform to Bitcoin). Usually, costs anywhere between $40 and $250. You can then list your artwork for auction on an NFT marketplace, similar to eBay.
  • Competition is at its highest.
Your work is tossed into a vast sea of other pieces, so you still need to bring it to the attention of potential collectors.
  • Big Returns mean also Big Scams.
The fact that with NFT big-money collectors are paying six to eight figures for works that can often be seen and shared online for free, several are the speculators that are attracted by the big opportunity. There have been examples of artists that have had their work minted as NFTs and listed for sale without their permission. Because anything can be tokenised on the blockchain anything can end up as a NFT, even if the creator of an artwork isn’t the person selling it online for Ethereum.


  • Environmental costs
Like Bitcoin, Ethereum requires computers to handle the computations, known as "mining," and those computers require a lot of energy. An analysis from Cambridge University found mining for Bitcoin consumed more energy than the entire country of Argentina. Ethereum is second to Bitcoin in popularity, and its power consumption is on the rise and comparable to the amount of energy used by Libya.



We hope that this guide will help you with your next limited edition print release!


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