For the longest time, artists have been posting their work across social media for free — just attracting plenty of likes, comments, and shares. The lucky ones only manage to make a few coins off their talent, nothing much. The traditional art market encompassing galleries and auction houses has also not been good enough either, as they have been known to dictate the value of artworks. These limitations have pushed artists, especially digital artists, to find better avenues to sell their digital art.
NFT crypto art is the silver bullet that has changed the rules of digital assets ownership. Besides, it is steadily changing how we view the art world, and investors are keenly interested in its progress. Here’s what this new digital movement revolutionizing the art world is all about.
Crypto art is a way of making digital art unique, and therefore – according to some people – valuable. Normally, digital art is very easy to replicate due to the very nature of digital information. So crypto art is a way of making digital files one-of-a-kind.
A crypto art rendering of the Nyan Cat meme recently sold for about $US600,000. All this came about because a unique version of the widely distributed image was made using blockchain. As the ‘unique’ version can’t be owned by anyone else, the rarity made it a collectible digital asset, which can be bought or sold many times.
What is NFT Crypto Art?
NFT stands for non-fungible token art, a unique digital artwork, a subset of NFTs recorded and stored on the ethereum blockchain –a tamper-resistant digital ledger. It represents any digital art file that can be bought, sold, or traded and proves ownership and originality.
The non-fungibility in NFT art highlights the uniqueness of each skill. It indicates that each NFT art is not limited to a universal measure of value as each has its value and cannot be replicated. Unlike other digital skills, NFT arts are unique and limited in supply, causing scarcity and a sense of authenticity, hence creating value.
Although NFT arts have been around since 2014, it wasn’t until 2017 when they started gaining popularity. Cryptopunks and later Cryptokitties came into the scene late in 2017, allowing NFT arts to hit the mainstream. Today, most digital artists are using it as their preferred avenue to buy and sell digital art.
NFT Crypto Art case studies
Everydays: The First 5000 Days
The First 5000 Days is a digital artwork by Beeple representing a collage of 5000 images of his earlier works. It showcases his development as an artist over the years. The painting is one of the most expensive NFTs ever sold. It was sold for $69.3 million at Christie’s in February 2021.
CryptoPunk is a household name in the NFT art world and among the most significant contributors to the NFT craze. They are a randomly generated set of 10000 distinct digital characters, developed by Matt Hall and John Watkinson from Larva Labs.
CryptoPunk #7523 was auctioned at Natively Digital for $11.8m. This art’s sale is attributed to its distinct features, which are relevant to the ongoing pandemic. Apart from being one of just nine Alien punks, its medical mask also made it stand out.
Created by renowned digital artist Beeple, CROSSROAD is an NFT crypto art that features anti-Trump messaging and an enlarged Trump-like image laying on the ground.
The image has profanities written all over its body depicting Trump’s defeat. This digital asset sold for a whopping $6.66 million in February 2021 on the Nifty Gateway platform.
Save Thousands of Lives
In May 2021, Noora Health created NFT crypto art entitled “Save Thousands of Lives” to raise funds for its work with new mums in South Asia.
It aimed at saving at least nine babies in every 1000 live births at the cost of $1,235 for every life kept. To many, this sounded like a far-fetched dream.
Later in the month, the artwork sold for $5.1 Million, accomplishing their save lives goal.
How is NFT crypto art different from cryptocurrency?
NFT crypto art and cryptocurrency have a few similarities and may be confused to be the same. For instance, they both store digital data on a blockchain, a digital ledger of transactions.
Also, the Ethereum blockchain can support NFT crypto art among other cryptocurrencies. However, that’s where the similarities end.
One of the significant differences is that NFT crypto art, unlike cryptocurrency, cannot be traded or replaced with one another. Besides, every artwork is unique and cannot be replicated. On the other hand, cryptocurrencies are often changed and exchanged with additional tokens.
In the NFT crypto art blockchain technology, the asset’s value will depend on its tangibility, rarity, and utility. On the other hand, the value of cryptocurrency is dependent on market fluctuation.
How can artists benefit from NFT digital artwork?
An NFT crypto art results from a creative process involving digital skills representing real-world arts. It could be anything, even a tweet — Twitter co-founder Jack Dorsey sold his very first tweet as an NFT art for over $2.9 million.
It could also be a meme, like Chris Torres’ Nyan Cat — an animated flying cat with a pop tart body leaving a rainbow trail. The meme was put up for sale as a digital good and fetched around $580,000.
The created NFT digital objects will earn exclusive ownership rights, meaning they can only have a single owner. Its original owner will then put it up for sale on many NFT market platforms available.
The art’s distinct data makes it easier to verify the individual ownership of the NFT file between the buyer and the seller. Both the new owner and the original artist can store some information inside the digital file.
For example, artists can sign their art by incorporating their digital signature in the metadata. Therefore, NFT art ensures immutability to the art creator as their creation changes possession.
When you buy NFT art, you get the right to transfer the unique token to your digital wallets as proof that your copy of the not file is the original. Your private crypto key acts as proof of ownership of the legitimate file.
The original creator’s public crypto key serves as a certificate of authenticity for the NFT art. What primarily determines the value of any NFT work on the NFT marketplace is the NFT creator’s public key and the owner’s private key.
NFT art eliminates intermediaries when trading art, lowering marketing costs and eliminating art brokers. Besides, digital art will be available on some of the leading digital platforms, hence increasing artist exposure beyond their geographical borders.
Currently, various exchange platforms are already making moves in the NFT art market. Recently, Binance partnered with State Hermitage Museum in a bid to promote their new NFT market.
The partnership allows the museum to auction a premium NFT collection containing works by Da Vinci, Van Gogh, and Monet. Once you purchase a digital artwork, you’ll receive one NFT copy while the museum stores the other. This collaboration will boost Binance‘s NFT art trading volume while also deepening the NFT frenzy more.
How NFT land art fuels ownership
NFT land art is one of the exciting crypto assets looking to decentralize digital art. Provided by blockchains such as Next Earth and Decentraland, the technology offers users a replica of Earth and allows them to create pixel art around it.
A patch of virtual land in the blockchain-based online world Decentraland sold for more than $900,000 on Thursday, in a record purchase for the platform, the Decentraland Foundation said. In virtual worlds such as Decentraland, people can display their NFT art collections, walk around with friends, visit buildings and attend events.
Even better, the virtual land purchased belongs to the user and can be resold at will. With such freedom, users owning virtual land can create and monetize their artistic expressions quite easily.
Digital land ownership will go a long way towards decentralizing digital art currently controlled by big corporations.
How to buy NFTs
OK, you’ve gone through this article, and you now feel inspired to jump into the NFT market. Where do you start? If you are looking to create your collection, there are a few things involved.
First, you’ll need to acquire a wallet that will enable you to store both NFTs and cryptocurrencies. What’s more, you’ll be required to buy some cryptocurrency, depending on the currencies your provider accepts. You can shop around online on various crypto marketplaces, then make a purchase using your credit card.
Once you’ve purchased your crypto, move it from the exchange platform to your preferred wallet of choice. Be sure to be on the lookout for transaction fees as you navigate your options. Most platforms charge at least a percentage of your transaction when you purchase a cryptocurrency.
Popular NFT Marketplaces
With your crypto wallet ready and pre-funded, you can purchase your NFT from the available online sites. Here’s a list of popular digital items marketplaces to quickly pick your preferred NFT provider.
OpenSea is ranked among the largest NFT marketplaces offering an array of non-fungible tokens. It features over 700 different projects dealing with non-fungible tokens, including Artwork, Virtual Worlds, Sports, Collectibles, Trading Cards, and Censorship-resistant domain names.
You can buy, sell, or trade NFTs on OpenSea. The marketplace also allows creators to create their digital art. Besides, it provides for the processing of smart contracts ensuring that a living artist gets the most out of his investment.
When Beeple sold his anti-Trump NFT- CROSSROAD, Nifty’s breakthrough came, which went for $6.6 million. Today it has a very significant volume of sales compared to other similar platforms in the blockchain. Also, most of these celebrity drops you come across on your socials take place at NiftyGateway.
Rarible is a community-owned marketplace that uses blockchain technology to allow creators and traditional collectors to buy, sell or trade NFTs. This marketplace gives particular focus to art assets. It believes and sells NFTs in diverse categories, including photography, games, art, music, domain, memes, and metaverses.
Rarible users hold the ERC-20 RARI token. Even better, active users on the platform receive a loyalty token. Artists can also use this marketplace to mint new NFTs to sell their creations.
SuperRare pays special attention to artists looking to buy, sell, or trade unique, single-edition digital artwork. Each artwork on the platform is a digital collectible secured by cryptography. The artwork is also easily tracked on the blockchain.
Popularly known as the new creative economy, Foundation primarily focuses on digital art. It is a blockchain platform that brings digital creators, crypto natives, and collectors together to help develop culture.
Whenever an art trades on the platform, the artist makes 10% on that specific secondary transaction every time their art is resold at a higher value.
Atomic Market is a shared liquidity NFT market smart contract. Therefore, everything listed on one market also shows on all the other markets. It is a platform used to trade atomic assets, a standard on the eosio blockchain technology for non-fungible tokens. Malicious collections are usually blocklisted on this site.
- Myth Market
Myth Market encompasses several convenient online marketplaces supporting different digital trading card brands, including GPK Market, GoPepe Market, Heroes Market, KOGS Market, and Shatner Market.
BakerySwap is a decentralized exchange and automated market maker on Binance Smart Chain. It uses a multifunctional crypto hub offering several decentralized finance services called BakerySwap.
The exchange also hosts a crypto launchpad and a non-fungible token supermarket. Its non-fungible token supermarket usually hosts arts, meme competitions, and games virtually.
Pitfalls of NFT Crypto Art
While NFTs are steadily growing in popularity and look promising for artists, the NFT technology has a few pitfalls worth discussing.
Authentication and ownership concerns
Art theft has been a growing concern with NFTs. Many artists have been crying foul after discovering their art selling on NFT marketplaces without their approval in recent years.
Therefore, digital artists have very little control over how and where their art is sold. That said, this has been a problem even before the entry of NFTs.
The Ethereum blockchain is incapable of adapting to the massive volume and magnitude of global adoption. The main problem is that the Ethereum mining process is energy-intensive — it has wild carbon emissions produced by the electricity required to mine.
The total energy consumption used in the mining process in the blockchain could efficiently power a city like London. To put things in perspective, we’ll borrow the words of Racoon, who says, “A single piece of artwork sold as NFT racks up a minimum of the equivalent of two weeks of household usage of energy in a single transaction.”
Most NFT marketplaces plan to change their operating model from running on a ‘proof of work ‘ system to a ‘proof of stake’ system, which is more sustainable. They hope the PoS mechanism will mitigate the environmental impact of blockchain.
Barriers to entry and flow of money
Most artists are still skeptical about non-fungible tokens. They believe that just like cryptocurrencies, only the rich and powerful are bound to benefit the most out of NFTs.
The main reason behind the skepticism is the difficulty for upcoming artists to scale up the ladder without the fame and massive following. Quite a number have been struggling to sell their art. Their renowned counterparts have it easy and are making a fortune out of their artworks.
Concerns over uncertainty
The hype surrounding NFT assets has made several experts compare it to an economic bubble that ultimately burst.
However, today we have investors in possession of art in the form of NFT minted assets worth millions of dollars. That said, while several non-fungible investments are showing excellent growth potential, putting all your eggs in this basket would be a long shot.
Should you buy NFT crypto art?
The NFT market is still very young, and just like most new markets, it is still going through multiple changes. As a result, its future is still uncertain and unreliable.
Will it survive the test of time? Will it crush? Will it manage to overcome the already existing pitfalls? Only time will tell.
Artists and other investors should trade carefully not to lose their entire lifetime investment should things go south. It is advisable not to go all-in until the road is clear.
That said, it is essential to do extensive research to understand all the possible risks involved- and if you decide to take your chances, do so with caution and integrity.
A sideshow on the great sell-off of 20 Beeple paintings was bundling them all together. Metapurse, the buyer of the Beeple paintings made a grand extravaganza selling off 10 million tokens that represented fractional ownership shares in the trove.
The pitch was that by investing (or speculating) in this B20 token, as it’s called, everyday traders who could never afford a Beeple NFT could still own a piece of the upside of the NFT art revolution. (Note: “B.20” is the name of the project as a whole, while “B20” is the name of the token, according to a representative of Metapurse.)
So, technically, it’s not the art that isn’t replicable; it’s something that’s linked to the piece of art, the NFT (non-fungible token). Whenever an NFT transaction occurs – buying, selling, giving, whatever – the data is timestamped and then has to be validated across the entire blockchain, which contains a history of every transaction ever made with that specific NFT crypto art.
While crypto art NFTs have sold for millions, they’re highly speculative assets that are not appropriate for every investor. A case in point: B20 was trading at about $2 a token back in mid-February. It then had an immense run-up in value, peaking at more than $28 dollars per token on March 10—the day before the Christie’s sale of Beeple’s Everydays.
It has fallen dramatically to earth in the six months since. After trading below $2 in mid-August, according to CoinMarketCap.com, it is now trading at $0.7579 or at -2.74%