NFTs are growing more extensive and making waves more than ever. The crypto world raves about how NFTs transform the art industry. Some artists have even sold their NFT artwork for millions of dollars!
So what is this NFT craze all about? If you are a digital creator, you have to know this landscape. Because right now, NFTs challenge the traditional ways people buy, view, and sell artworks big time.
Read on to learn all you need to know about NFT Art in our complete guide below.
NFT Digital Art Defined
NFT stands for “non fungible tokens.” An NFT Art represents a unique digital artwork or a digital asset. Before we dive into it, let’s discuss the word fungible first.
Fungible means anything you can switch to a similar item and retain its exact value. For instance, you can switch a 50-dollar bill to five 10-dollar bills, and you still have the same value. In this case, the 50-dollar bill is fungible.
Now, in case a famous artist or athlete signs your 50-dollar bill. That bill evolves into a unique item and is no longer worth five 10-dollar bills. Over time, it might grow in worth trusting how people see its essence. Hence, your signed bill becomes a non fungible token.
NFTs exist only in the digital realm. You can have digital ownership of these digital assets, just like physical art. To do this, you can buy or sell digital art through an NFT market.
NFTs consist of digital proof of legitimacy. Through blockchain technology, people can trace and verify who owns the NFT. With this, artists can retain rights to their digital work and receive royalties as it moves around.
Will this new digital art business transform artists and the art industry positively or negatively? Read on.
What do NFTs mean for creators?
If you’re a creator new to blockchain technology, NFT art can be hard to grasp. But if you want to join digital artists and sell NFTs, here’s what NFTs mean for creators like you.
- Ownership of Digital Art
Before blockchain technology existed, we had no means to own anything digital: people screenshot and share photos and videos with endless reposts. Hence, no one can just claim copyright ownership over a digital file or art.
NFTs reshape this culture by letting artists have the power to sell or display their art however they want. They can have legal ownership of their art through minting. Minting NFTs refers to turning artwork from digital into a crypto asset on a blockchain.
Minted NFTs contain smart contracts that bear the NFT owner’s digital signature. These blockchains keep track of copyright ownership in a way that none can hack. In theory, any NFT you mint should point to only one person.
In this way, artists can receive proper ownership rights for their virtual art. Also, artists can receive proper royalties whenever their art moves in the blockchain. Thus, artists can now have thriving incomes and be able to keep creating NFT arts.
- A Novel Way to Generate Income
Digital artists have great hardships in earning through their work. What’s worse, online piracy can steal away income that is rightfully theirs. NFTs bring back those rights and let them reap their creative labor through rightful income.
Blockchain’s smart contract allows for faster payment processes and transfers within the network. No more mainstream auction houses nor running after buyers for payments. NFTs allow an artist to interact and sell directly to their audience.
Creators can also mint NFT art with royalties. Royalties enable an artist to receive around 8-10 percent of all future work sales. But as of now, royalties differ in each platform.
However, the NFT art value highly depends on the crypto coin’s price. For instance, most creators sell their NFTs on the Ethereum blockchain. Ethereum then prices these NFT arts in the currency of Ether, around 3,120.69 dollars, which is pretty high.
But as soon as Ethereum’s price drops, the NFT art value also drops. THEREFORE, the NFT art’s inherent value ties up closely with the coin, not on its intrinsic essence. Hence, the overall NFT art industry relies on the health of cryptocurrency as a whole.
- A Global Reach
Traditionally, the world of physical art collecting happens in local physical museums exclusively. An artist depends on public exhibits and art markets to earn money upfront. But world events like pandemics stopped these significant sources of artists’ income, leaving them in misery.
Also, graphic designers find it hard to maintain a steady flow of earnings. Sometimes, it could take months before a client buys their physical artwork. So, they find themselves doing day jobs just to sustain their bills.
Now, NFT trading allowed and moved art collecting entirely online. The NFT marketplaces sell globally and open up doors for many artists. Designers now have equal access with the pros to sell their work and gain an audience.
Any NFT platform allows creators to interact with their audience across the earth directly. What’s left for creators is to figure out how to change their audience to customers. This global reach can create a tidal wave of NFT creatives, especially for the less rich.
- A Hefty Ecological Footprint
However, buying NFTs takes a lot of energy. For instance, Joanie Lemercier’s NFT deal consumed 8.7 megawatt-hours of energy. That energy can power more than 8700 city homes already!
Like Bitcoin mining, Ethereum still uses Proof of Work (PoW) systems to mint NFTs. However, PoW systems take so much computing power and energy to mint one NFT successfully. Thus, minting NFTs leaves a bulky ecological footprint and harms nature.
Most designers then don’t buy NFTs, knowing the harm it causes to the environment. Creators hence seek greener solutions to address this issue. But until then, an artist wanting to own NFTs has no choice but to do business in a not-so-eco-friendly way.
How Do NFTs Work?
NFTs contain intelligent contracts encoded on the Ethereum blockchain. Smart Contracts include many crucial data like the creator details and a trigger to receive royalties. So to convert your artwork to an NFT, you must mint it first to a blockchain.
Minting is the process of making intelligent contracts and storing them in the blockchain. Artists usually mint their art on an NFT Market like OpenSea or Nifty gateway. Creators will bid for minting their artwork via gas fees, ranging from eighty to a thousand dollars.
It’s important to note that an NFT consists of two parts: the smart contract and the artwork itself. Blockchains store the smart contracts, but they don’t store the artwork. Creators find it very labor-intensive and expensive to store such data. Instead, these smart contracts link to your artwork’s actual address.
Also, the NFT contains an ID number and info such as digital wallet address, creation date, and previous owners. These contracts prove the right of possession and genuineness and are indisputable. Thus, the NFT owner can track their artwork’s entire transaction history and royalty.
You can make an NFT of your artwork through minting. Once you have a crypto wallet, you can drag and drop your artwork and fill out metadata. Then, just hit create and wait for verification. In this way, you have created an NFT ready for selling.
How Are NFTs Different From Cryptocurrency?
Take note that Non Fungible Tokens differ from cryptocurrencies. Even though they run on the identical blockchain, they function differently.
First, NFT uses cryptocurrency to run the deal, while crypto can’t use NFT to trade. Also, a crypto coin can be bought and sold at the same amount; a non fungible token can’t.
For instance, bitcoins are equal to another bitcoin, but non fungible tokens are uniquely different. NFTs contain a unique digital signature that no one has a duplicate copy of. Hence, NFTs are not valued equally.
The NFT craze resembles baseball cards signed by famous athletes. Each one is a unique collectible, and you can’t trade them at the same values. Also, NFTs are wallet specific; crypto coins are not.
NFTs shoot up in price depending on digital scarcity through unique signatures. NFT enthusiasts buy them for millions of dollars just to take hold of the asset. Check out some of the most amazing NFT examples and deals ever.
Everydays: The First 5000 Days
Artist Mike Winklemann, also known as Beeple, has posted online artworks every day since May 2007. For 5,000 days straight, he created digital artworks without missing a day. He then compiled this extensive work into a single collage and minted it as an NFT.
On March 11, 2021, this image made history as the highest price of any NFT sold at 69.3 million dollars. Sold at an auction house called Christie’s, this image kickstarted the NFT craze.
Beeple created Human One as a kinetic sculpture that changes according to the time of day. Beeple claims that it’s a story of the first human born in the metaverse and will evolve. In November 2021, Human One sold for 28.9 million dollars.
Human One consists of a 16k resolution kinetic sculpture. It has a polished aluminum case on a mahogany wood frame. Beeple said it’s a hybrid digital file and a physical asset that updates over time.
Lindsay Lohan’s Fursona
Lindsay Lohan’s Fursona NFT began from the NFT community Canine Cartel. This community started as a project with human-like avatars of dogs and called them “Friends of the Cartel.” Members made their versions, and Lindsay Lohan joined the craze and minted a “Fursona” of herself.
Lohan’s Fursona consists of her digitized dog-look-alike with ears covered. This NFT sold for 4,408 dollars in an auction house in October 2021.
Snoop Dogg’s “Da Dogg Gone Gym”
Snoop Dogg created NFT sitcoms with Harlem Globetrotters, released in October. Harlem and Snoop released these NFT sitcoms exclusively on vast.app. Junebug and Snoop Dogg train with the Harlem Globetrotters in a 70s fashion worth watching.
Snoop has collected and created NFTs actively since March 2021 and has 19 million dollars in NFT assets.
Applebee’s Metaverse Mondays
In December 2021, Applebee’s restaurant began promoting NFTs as part of its menu. They contacted artists to make NFT art representing their burger, boneless wings, and street steak. As you buy the NFT, you can own the artwork plus one year’s menu supply.
Applebee’s Metaverse Mondays attracted advertisers and crypto enthusiasts alike. Meanwhile, their NFT titled Bourbon Street Steak sold three hundred thirty-seven dollars for a thousand grand.
Under Armour Stephen Curry Sneaker
Dubbed as the “wearable” Stephen Curry sneakers, Under Armour made waves as they minted NFT Steph sneakers. Under Armour created these sneakers to honor the shot that made Curry the all-time lead 3-point shooter. Hence, they made 2,974 NFT replicas of Curry Flow 9 speakers that Steph wore on December 14.
The Genesis Curry Flow NFT features the first wearable sneaker on metaverse. Under Armor made it available to wear in Decentraland, Gala Games, and the Sandbox.
Ozzy Osbourne’s CryptoBatz
Metal legend Ozzy Osbourne created a large set of 9,666 bats NFTs in January 2022. When you buy these CryptoBatz, you can make it “bite” other NFTs in your digital wallets. Hence, these make a mutant bat that shares the DNA of both tokens.
How Do You Buy And Sell NFT Art?
You must first choose the blockchain that you’ll use to buy and sell NFT art. Then, you can secure a digital wallet to hold the blockchain’s contracts. You can use MetaMask, Coinbase, and Trust Wallets as it supports Ether and other currencies.
Next, look for an NFT marketplace that allows digital assets to be bought and sold. Connect your wallet to markets such as OpenSea, Mintable, and Rarible. Once set up, you can now make transactions between NFTs by paying gas fees.
You can post NFTs on other marketplaces without extra cost, but some may charge hidden fees. These gas fees maintain the health of the NFT and rely on network clogging. The more people transact at a single point in time, the more expensive the gas fee.
Some artists spread their work on social media to draw buyers. Other collectives also use NFT drops to excite buyers for new NFTs to be released. These NFT drops helped designers reach a global audience that would not otherwise be possible in the fashion industry.
What Are Some Of The Issues With NFTs?
NFTs face a lot of issues. First, NFT deals are not eco-friendly and consume immense amounts of energy per transaction. Hence, creators eagerly wait for greener solutions like the Ethereum 2.0 model. But until it arrives, some creators can’t start creating NFTs while polluting the earth.
Another major issue with NFT is fractionalization. Other sites charging expensive NFTs allow people to own the NFT in “parts.” But in the long run, as more people own small portions of the artwork, who owns the NFT now as a whole?
Fractional NFTs threaten fraud or theft of the artwork if it continues. Also, if one buys an NFT, what rights are you buying? Is it the right to resell the artwork or the rights to the artwork itself?
Finally, theft still poses a real issue in blockchains. Creators witnessed their work minted by unknown entities. Some NFT marketplaces don’t even have strict verifications before selling and NFT.
The NFT world doesn’t have definite answers to these issues yet. Hopefully, a new set of laws will govern these issues in the future as it develops.
NFTs can genuinely transform the way of buying art in the digital realm. Having been protected by blockchain, creators retain copyright and receive rightful income directly from their work. If there’s a greener way to mint, then NFT museums might be the next big thing for the creative industry.