There’s been big buzz on NFT Art over the past several months and now it’s really starting to explode.
So what’s NFT? Or should I say “Non-Fungible Tokens.” And what are NFT artworks?
NFT art is a record of who owns a digital piece of art using the blockchain technology. Any piece of digital content can be “minted” into a NFT that creates a file which lives on the “blockchain” which tracts the entire history of that piece. That NFT art can be sold and re-sold and a record exists of it’s ownership and price value. The payment for these artworks is cryptocurrrencies, usually Ethereum. Now, the head scratcher is after you’ve bought a NFT artwork, you don’t receive an actual piece of art with your purchase. You’ve bought the non-fungible token which is just a long series of letters and numbers that is dropped into your digital wallet. You don’t receive some physical file or print to hang on your wall.
An NFT is non-fungible because it is not interchangeable. Each NFT Art is distinct and has a unique ID assigned to it. It’s blockchain cannot be altered. It is a permanent record or ledge of this piece.
When you buy a piece of NFT artwork you retain ownership of the digital piece, but it still is available on the internet and various other digital means. Anyone can still download that piece from the internet, share it, etc. So what good is ownership? Well, the more a digital artwork is seen and shared it increases it’s visibility and potentially it’s “worth”.
Now, when that artwork is first sold, the site hosting the artwork retains a commission and the artist receives their payment. If the artwork is resold (and resold and resold) the original creator retains a “commission” on every resale (usually 10%). So as the work gains in value the original creator still receives “commissions” on the work.
This sounds awesome. How do I get into this new market?
Well, it’s not as easy as it seems. Not crazy hard but their are some hurdles to handle.
You need to have an account to buy Cryptocurrency, like Coinbase, Kraken, or many others. Now you need to buy some cryptocurrency (like I said usually Ethereum).
Once you have that you need to attach your coin to a digital wallet (usually MetaMask). Finally, you can link your digital wallet to the NFT Hosting site. You can now buy a NFT artwork.
But what if I wanna sell NFT Artwork? That’s another hurdle. Some of the top sites like Nifty Gateway or Super Rare are curated sites. Meaning you have to submit a portfolio and a video about yourself to gain access to sell on those sites. Other sites, you need to submit an application, and other sites you can just upload an NFT artwork and sell. Obviously the curated sites offer a larger audience and can command a larger selling price.
Okay, you are able to get onto a site to sell a NFT artwork, you need to convert your file to the blockchain. This will take “gas” to “mine” your artwork, which costs you a fractional fee of crypto currency. Now, the gas rate is variable. It depends on when you go to “mint” your artwork. Think of an utility company charging different rates for electricty, peak vs. off-peak time. This mining comes with an environmental impact since it takes a neural network of computers to process the data.
So is this a sustainable market? Is this all hype? Should I do this? Are all very good questions and honestly I don’t know. I do know people said the same thing when Crypto Currencies first cam on the scene. The technology of blockchain is very real and stable, but is this a fad? I guess only time will tell. There are good signs that maybe it will stay, Christie’s auction house is treating it as real. Artists such as Beeple, Ben Mauro, and many others have had tremendous success with it. To be honest I’m still learning about this interesting new art space for digital artwork. If anyone has any thoughts I look forward to hearing them.
An excellent talk about all things NFT is with Emmanuel Shiu and Jan Urschel on their Art Department Podcast. Listen to it, they go thru the whole rabbit hole of NFT art and should you do this or not. Also, check out their links page, it’s a great collection of information.