What is NFT Art: All you Need to Know
The recent interest in NFT art promises to revolutionize the creative industry. Here’s what you need to know about NFTs: what they are, how they work, how to make them and what they mean for artists.
2021 was the year when NFT art exploded. Every now and then you hear about NFTs sold for millions of dollars. Platforms like TikTok and Twitter or CNN News, all of them are talking about NFTs and most particularly NFT art.
But what is it anyway?
How can a digital artwork be worth more than $60 million?
And most importantly, will NFT art replace physical art in the future?
We’ve found answers to all these and many other questions that were blowing our minds recently. Let’s uncover the mystery about NFT art.
What is NFT Art?
Let’s start with the definition of NFT.
NFT stands for non-fungible token. Doesn’t make any sense? Ok, ok. Fungible means replaceable. A fungible asset is something that you can easily interchange with anything else, like money. If you replace a $10 note with two $5 notes, then you’ll get the same value.
NFTs are different, each NFT is unique and you can’t replace one NFT with another. It’s very close to buying artwork. There may be thousands and millions of copies of Van Gogh’s Starry Night, but only one is the original work. It has some unique features that can’t be copied. The same goes with NFTs, each one is unique and different from others. NFTs can’t be swapped for any equivalent value, but at the same time, their value can easily increase or decrease depending on circumstances.
NFTs are digital assets, they only exist in a digital form and you can’t touch them. NFT could be any type of digital file: a digital artwork, an article, music, video, domain name or a meme (like the “Disaster Girl” photo, which was sold for $500k).
What refers to NFT art, it’s simply digital artwork that was “tokenized” as NFT.
How do NFTs Work?
You might wonder how digital art can be unique. Any photo, video or image can be easily duplicated or downloaded countless times. With physical artwork it’s easier, a painting is very valuable because it’s one of a kind and specialists can distinguish the original work from duplications.
And that’s exactly where NFTs have revolutionized the world of art. They made it possible to distinguish the original work from duplications. With NFTs, digital art can be tokenized and have a digital certificate of ownership. That’s what makes digital art unique. NFTs have made the process of buying and selling digital art possible.
It works similarly to cryptocurrency. An NFT contains information about who owns the artwork, which is stored on a shared ledger – the blockchain. The records can’t be forged as blockchain stores information across a network of computers. NFTs can also contain smart contracts which would make it possible for artists to get a cut whenever their artwork is resold.
What do You Get When You Buy an NFT Art?
When you buy an NFT art e.g. an illustration, you won’t own that illustration and you won’t be able to stop it from appearing on the Internet. Anyone can still download and copy that image. You won’t own the copyright either. Not all NFTs include the copyright of the original work, so most probably you won’t be allowed to reproduce or sell that illustration. You can only sell the NFT itself.
So what will you get in the end?
You are buying not the artwork itself but the authenticity and the ownership of the work. And no one can question that you’re the rightful owner of that NFT. You can sell it whenever you want at a higher or lower price.
Scarcity and uniqueness is the key to the world of art. People buy an art piece because it’s one of a kind. And NFTs have made each piece of digital art unique.
Why and When did NFT Art Become Mainstream?
Everyone talks about NFTs now, but how did it all start?
NFTs have been around since 2017, but only in 2021, they became so popular.
Everything started in March when digital artwork created and minted by a graphic designer, artist and animator Mike Winkelmann (whose moniker is Beeple) was sold at Christie’s for more than $69 million. The artwork is called “Everydays: The First 5000 Days”. It’s a montage of illustrations, cartoons and sketches, which the artist made one per day for more than 13 years.
Though Beeple was famous among digital artists, he wasn’t that famous in the art world. No one knew him before the sale of his work. The bidding of his artwork started at $100 and during weeks it reached millions. Finally, the work was acquired by a blockchain investor with the moniker MetaKovan (whose real name is Vignesh Sundaresan).
But how can digital art be so expensive?
Well, it happened because of the bidders. Of course, they liked the work in the first place. But they also wanted to create sensations and make everyone know about NFTs.
Besides that, the Ethereum cryptocurrency, which is the most common currency for trading NFTs, doubled in value over the next six months after this sale.
Is it a New Art Form?
In the sense of a new art form like oil painting, photography or video art, NFTs are not the same. NFTs may have revolutionized the world of digital art, but they are not a new art form. Digital art existed way before NFTs came around.
NFTs are more like financial instruments. They just help to add scarcity to the art and make it unique, so that it can be sold.
NFTs can be also used in other ways. You can, for example, divide an NFT into fractions and sell it as shares. When an NFT increases in value, so will the shares.
It is also possible to mint (tokenize on the blockchain) physical works of art as NFTs. When you do so, you won’t displace the work of art itself, but rather create digital data about the artwork, who owns it, instructions on how to care about it, and how much royalty will the artist receive when the artwork is resold.
As NFTs can’t be forged, no matter where the artwork is, no one will question that you’re the owner. This is a big change in the world of art, as you might know, it’s easier to fake a physical artwork or its certificate.
Though, NFTs don’t save from forgery completely. It’s true that you can’t fake the records about the ownership of the work, but it’s possible to fake the artwork. In August 2021, a hacker sold Banksy’s fake artwork as an NFT through Banksy’s own website for $336,000.
This example raises many questions about the value of NFTs. Though it makes it possible for artists and creators to more easily sell their digital and non-digital art, nothing stops someone from creating an NFT for an artwork they didn’t create. So, basically, someone can steal your artwork, mint it as NFT and sell it without you even knowing about it.
Legally, they need to get the creator’s permission to mint the artwork as NFT, but not all the platforms require proof of copyright. This is the huge minus of NFTs, and if you’re going to create NFT art, it’s better to know about this kind of NFT scam beforehand.
What NFTs Offer for Creators
Ownership of the Artwork
Before NFTs, the idea of owning digital artwork didn’t exist. Designers and artists could repurpose or repost their works but there was no opportunity to assume complete ownership of the work. NFTs allow creators to sell their original works and display them as they wish.
Before selling digital artwork, creators need to get “legal” ownership of the work. That process is called minting, which means tokenizing an artwork on cryptocurrency service, blockchain. After creating an NFT for your artwork, you can easily sell it and not worry about hackers or scammers, as your work is already minted and everyone knows that you’re the creator.
Though, as there is the risk of someone else stealing your work and minting it before you do, you need to be careful. It’s better not to make your work public before you mint it. NFTs are still a new thing and there is no legislation to be protected from scammers.
A New Way to Generate Income
NFTs are a new way for artists and creators to monetize their art. And it’s much quicker than selling it any other way. There are no chasing clients for payment, no waiting to hear feedback, no need to change or edit your work so that client remains satisfied. So it gives a lot of freedom to artists to create what they want and sell it without thinking about approval.
Besides, NFTs made it possible to receive royalties any time your work is resold. The amount of royalties changes, depending on the platform you’re trading, but generally, it’s 8-10%.
On the other hand, don’t rely on this income too much. The value of an NFT art can change drastically. As NFTs are mostly based on the Ethereum blockchain, the trade is usually made using ETH (Ether) cryptocurrency. And if the value of cryptocurrency changes, so does the value of the artwork. NFTs are responsible for ETHs increase, and maybe if people start talking about NFTs less, the price of Ethereum will drop.
Many artists don’t have the possibility to show their works at art exhibitions or other events. Before, art collecting and selling happened generally in physical spaces, during exhibitions, auctions. And NFTs are a more accessible way to show your works to people around the world. Art collecting has moved online, which opens many doors for artists around the world.
Graphic design and digital art industries are extremely competitive and it might be hard for beginners to succeed. Besides, it’s very tricky to generate stable income for designers and artists, their income is mostly based on projects from loyal clients which are not always long-term. So the easy and immediate process of creating and selling NFTs can be a huge help for those working in creative industries.
Keep in mind that you’ll still have to work on your branding and marketing in order to sell your works. If you already have an online following, it would make your job of converting your audiences into customers easier. But if you’re a beginner and don’t have much of a following, you’ll need to think about strategies on how to connect to your audience and how to convert them into buyers.
Anyone who has access to a computer can create an NFT art and profit from it. It is a really groundbreaking opportunity for all artists both beginners and well-established creators. More and more entrepreneurs are investing in NFTs which will only increase their value.
Though, there is one thing to know. The minting fees can be quite expensive. They are constantly changing and range between 80$ and $1000. This fee only allows you to display your work and doesn’t guarantee that your work will be sold. Without paying this fee you can’t list your work on the market.
How to Create and Sell NFT Art
Now, let’s find out how to create an NFT. Whether you’re just starting your career in the art world or are already a famous artist, making an NFT is a big opportunity that no one should lose.
Create the Artwork
The first thing to do is of course to create the artwork itself or choose which ones you want to sell from your previous works. The industry is getting quite competitive and the more unique your work is the higher the chances to sell it.
Choose the Platform
Then you need to choose the platform where you’re going to display your works and sell them. There are many NFT marketplaces that are quite different from each other and have varying fees. Explore all your options carefully.
Some platforms like OpenSea offer all ranges of NFTs, from artwork and music to domain names and games. Other platforms are more specialized like SuperRare or KnownOrigin where you can only sell digital art and collectibles. Some of these may require approval of your artwork before placing it on their platform. Make sure to choose the platform or platforms that best suit your needs and budget.
Create a Digital Wallet
Before minting your artwork, you need to make sure you have a digital wallet with enough crypto money on it. Usually, NFT platforms require ETHs to pay for fees, but depending on the platform it could be different. So, you need to create a digital wallet (like MetaMask) and buy enough ETHs or other cryptocurrencies to be able to pay the minting fee.
Remember that the price of cryptocurrencies fluctuates all the time and may even swing by several hundred US dollars just in a few hours.
Add Your Artwork to the Platform
Now as you have enough to mint your work, you can start the process. Simply go to your chosen platform and register an account. Then connect your crypto wallet to the NFT platform and add your digital file to the platform. Make sure to add the description of your work to increase its chances of selling and choose a reasonable auction price for your work.
The last step of adding your work to the platform is minting. You’ll need to pay listing fees, which are very low and the minting fees which can be high and are constantly changing. By minting, you generate an NFT for your artwork, which makes the process of selling your artwork possible.
Also, keep in mind that when someone buys your work, you’ll need to pay a commission fee and a transaction fee to transfer the money from the buyer’s wallet to yours.
Is it the Future of Art Collecting?
It’s hard to answer this question, as the NFT industry is changing so rapidly that it’s difficult to tell whether it will even last a decade or not. But as the curator Hans Ulrich Obrist said “NFTs have already transformed the art world, regardless of whether the boom continues”.
NFT prices rise and fall every minute as do cryptocurrency prices, so it’s hard to predict anything. Though, NFTs have so much potential that they will likely stay for at least a couple of years.
There have already been so many changes in the digital world and NFTs can be just another big step to a more digitalized world.
We can make one conclusion here: NFT is a risky business and if you want to try yourself there, you need to be ready for big losses. But anyway, for all kinds of artists, musicians and designers, this is truly a big opportunity to spread their art all over the world. And if you are not afraid to lose, then you should definitely try it. Who knows, maybe you’ll become the next Beeple.
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