How NFTs Transform The Art Industry
It’s no surprise that digital art is one of the most prominent forms of modern art today. But are NFTs really the answer to all the digital art problems? Maybe yes or maybe not!
In 2021, NFTs made a boom in the art world: Beeple’s artwork “Everydays: The First 5000 Days” was sold at Christie’s for more than $69 million. The thing is it wasn’t an ordinary physical artwork, but digital art.
Digital artists didn’t have the possibility to sell their works before NFTs came around. But why? What’s so important in NFTs that everyone is talking about them even in 2022? And do they really transform the art industry we knew?
In this article, we’re going to find answers to all these questions and even more. We’re going to learn how NFTs are changing the art industry.
A Quick Guide to NFT art
First things first, what is NFT art and how is it different from the art we know?
Well, before answering this question, there is one thing you need to know: NFT art is not digital art. Digital art existed long before NFTs were created. The problem was, artists couldn’t sell it, because they couldn’t prove the ownership of their works. Anyone on the Internet could freely copy their artworks and use them. NFTs just made it possible to sell digital art.
NFTs or non-fungible tokens are digital assets with a unique identification number. Similar to bitcoin or other cryptocurrencies NFTs are stored on a blockchain – a digital public ledger where everyone can view and verify the transactions. But unlike cryptocurrencies, NFTs are not interchangeable, meaning each NFT is unique. You can easily exchange one bitcoin for another and get the same value. That doesn’t work for NFT, you can’t exchange one NFT for another as they have completely different values.
NFTs can be anything from digital art to game assets, trading cards and even physical items. NFT art is just a small part of what NFTs can be and can do.
In order to create an NFT, you need to “mint” your artwork as NFT to store it on the blockchain. Once the artwork is minted, it becomes public, and everyone will know who is the owner of a certain artwork.
There is one more important note to make for art collectors. NFT art collecting is different from regular art collecting. When you buy an NFT art, you don’t buy the artwork itself, but more like the certificate of ownership. Anyone on the Internet can still easily copy the artwork, but there will be only one true owner.
How NFTs Affect the Art Industry
It’s obvious that NFTs have made some big changes in the art world. And now we’re going to explore all of them.
Rarity is the key in the art industry. Who would buy any of Picasso’s or Dali’s works if they could be easily copied or existed in thousands of versions?
Of course no one, people buy art because each artwork is unique and there is only one of it in the whole world. That’s obvious for physical art, but digital art is different.
There is only one click from copying and saving a digital artwork on your computer. No one will stop you or claim copyright protection. So there would be a thousand versions of the same artwork and no one could tell which one is the original work.
That’s where NFTs come. They add rarity to each artwork. As each NFT has a unique ID, it makes each NFT artwork unique. And you can easily prove the ownership of any of your artworks.
Many of you may wonder why NFTs cost so much. And the answer is rarity and uniqueness. Many things need to be taken into account to calculate the value of an artwork. They include the artist’s name and popularity, time of creation, the uniqueness of the artwork, etc. And of course the scarcity. This is what makes NFTs so valuable.
The Possibility to Sell Digital Art
As said previously, digital art can be easily copied. So digital artists couldn’t really sell their works and many of them tried to earn from alternative ways. Well, they did so before NFTs.
This was a huge step in the art industry. NFTs made it possible to trade digital art be it illustrations, videos, GIFs, music or any other works. Even famous auctions like Christie’s started selling NFTs, with the Beeple’s work as their first sold NFT. And there were many NFT art exhibitions all over the world, where people could explore and buy NFT art as they did with the physical artworks.
Besides, for many digital artists, it was impossible to get any income from their artworks. The art industry is highly competitive and NFTs make it a bit easier for all artists to show their works to the public and earn from them.
Making Art More Accessible
When talking about art collecting or art trading you probably picture an auction room full of art collectors. Besides them, most people wouldn’t even know that there’s an auction going on in that room. And that’s understandable as not everyone can buy art, especially expensive works.
But NFTs changed that. Everyone who has a digital wallet and digital cryptocurrency can buy art. And I’m not talking only about digital art. Physical artworks can also be minted as NFTs and sold on NFT marketplaces. Theoretically, anyone can become the owner of Van Gogh’s Starry Night without even leaving their house (of course when you have enough money for that).
People from all over the world are investing in NFT art and NFT art collecting. And it’s not even necessary to understand art or be a professional artist. People like you and me who are very far from the art industry can become art collectors with a collection worth millions of dollars.
The Opportunity to Show Artworks to People all Over the World
Accessibility refers not only to collectors but to artists as well. It would cost a lot to create an artwork, organize an exhibition or an auction to be able just to show the artworks. Well, Internet has made it more accessible to spread the word about artists, but still, they couldn’t sell their works that easy.
Whereas NFT marketplaces are available to anyone who has an Internet connection. Practically everyone from all over the world can view art and buy it. And artists won’t have to spend so much just to show their works.
True, minting an NFT is not free either, but the efforts needed for organizing exhibitions, talking to potential buyers can also cost a lot in terms of time and resources. While to make an NFT you just need to go to any NFT marketplace create an account and mint your work. And your art will become available to all people on the Internet.
No Need for Intermediaries
To organize an exhibition or an auction, or simply to sell your art you need to have a curator or an agent. As uniqueness and originality of the art are important in the art industry, these intermediaries are necessary to ensure that buyer purchases the original work and of course to protect the rights of the artist.
On NFT marketplaces everything is automated. There is no need to hire agents or managers who will sell your works. You just need to add your works on marketplaces and buyers will find them themselves.
And as NFTs are stored on the blockchain, which is one of the safest and most secure systems in the world, artists can rest assured they are fairly paid for their works and no one can hack the system. While the collectors will also be satisfied as they know they are the only rightful owners of the artworks.
NFTs are proof of ownership which means they help artists to protect their rights on the Internet. Blockchain is a very safe environment and it’s not easy to hack it which makes it even more beneficial to sell your works as NFTs.
So you can prove that you’re the owner of a certain work and if anyone tries to claim the opposite you can easily protect your rights.
Besides, thanks to the automated process of smart contracts, you will easily receive royalties whenever your artwork is resold. And as it’s automated you don’t need to track your works and claim royalties when someone sells your works. Artists will instantly receive the royalty fees as specified during the minting process.
The Downsides of NFTs
Besides all the good things about NFTs has some minuses.
It’s not free to mint an NFT. Artists need to pay the gas fees needed for the minting. And that could be quite high depending on how busy the blockchain system is. Minting fees can range from anywhere between $40 and $1000. Besides, marketplaces can also require some other fees to pay such as transaction fees for transferring the money.
Though, some marketplaces like Rarible, have added the “lazy minting” option, to make it easier for artists to sell their works. Technically, when you choose this option you don’t create an NFT, your NFT will be created when your artwork is sold. So you don’t have to pay the minting fees, they will be paid during the purchase.
This is a great chance for artists, as not everyone is ready to pay some additional $100 just to mint an NFT. Remember that minting doesn’t guarantee that the work will be sold, it just makes the artwork available on the blockchain and on marketplaces.
Apart from the high fees, there is another issue to talk about. And that’s about the environment. It takes time and a lot of energy to mint an NFT. Add the fact that more and more artists are entering the NFT space and the issue becomes even bigger.
Some artists don’t want to harm the environment and choose blockchains other than Ethereum to reduce the environmental impact. Though even Ethereum, the original NFT blockchain, understands the problem and has announced the change to the Proof of Stake protocol to reduce the harm. But still, mostly the transactions are verified by the Proof of Work protocol, which consumes a lot of energy.
Whether the NFT craze continues or not, it’s clear that they have truly changed the world of art and it won’t get back to the old times again. NFTs have opened the doors for hundreds of digital and non-digital artists allowing them to show their works to millions of people and make a profit from art.
And despite some problems, which will probably be solved in the near future, NFTs have all the chances to stay with us for a long time and continue revolutionizing the art industry.
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