Whether or not you know how they work, you must have heard of NFTs. They became extremely possible last year after a digital artist named Beeple sold an NFT for $ 69.3 million online.
In this guide, we will explain what crypto art is and where to buy NFTs.
What is an NFT?
A non-fungible or NFT token is a digital asset that you can collect. It holds a value in cryptocurrency and can be bought or sold.
These tokens are considered non-fungible because you cannot exchange one NFT for another. For example, if you have 1 Bitcoin, you can exchange it for another Bitcoin and still have one Bitcoin, functionally the same as the first. Thus, Bitcoin is a fungible token.
On the other hand, an NFT cannot be exchanged since two NFTs do not have the same value, since each NFT has a unique digital signature.
How do NFTs work?
NFTs are present on a blockchain, usually Ethereum, and are “struck” or created from digital objects that may represent intangible or tangible assets, such as:
- Video highlights
- Sports highlights
- Designer sneakers
- Video game skins or virtual avatars
Even legendary tweets can be sold as NFT art. For example, Jack Dorsey, the founder of Twitter, sold his very first tweet as NFT for $ 2.9 million.
Crypto art as a proof of concept
Before NFTs surfaced, it was difficult to profit from digital art creation. No one believed that digital artists could make millions of dollars for just one piece of art.
However, as NFTs became more mainstream, artists and artists began to see the untapped potential of the digital art market. Sotheby’s, Christie’s and other fine art auction houses have opened their doors to digital art and held NFT exhibitions.
Did you know?
Art lovers can also indulge in a new form of collecting with the rise of NFT art.
For some, it’s quite baffling that a digital artwork can sell for millions.
Mike Winklemann, commonly referred to as Beeple and the historic million dollar NFT salesman mentioned earlier, explained in a School of Motion podcast, “Value is scarcity, and others want it. That’s it. If nobody wanted it, there would be no value.
What do you get when you buy an NFT?
When you buy an NFT, you get a piece digitally signed by the artist. The sale is tracked on the Blockchain so that no one else can claim ownership of the NFT.
The metadata and the unique identifier manage the ownership of an NFT. Each token struck is accompanied by a unique identifier linked to an address hosted on a blockchain, such as Ethereum.
You can either keep the NFT in your wallet forever or sell it later. In some cases, the original creator of the NFT will get royalties on the resale.
What does this mean for artists and collectors?
For artists, this means they can expand their source of income by symbolizing their work, such as digital art, memes, videos, or music.
Artists can take advantage of smart contracts to ensure consistent income. A smart contract refers to a digital contract defined in code, which can be scheduled to run if certain predefined conditions are met.
How crypto art is struck
Crypto art is created through smart contracts which then assign ownership to the creator and manage portability. When you create an NFT, you run the code in a smart contract. Smart contracts must meet specific standards, such as ERC-721.
As a result, the information is added to the blockchain managing the NFT. The creator’s public key becomes a permanent part of this token’s history. Therefore, the original artists can receive royalties whenever the NFT is sold.
For example, platforms such as Zora and Foundation pay royalties to artists. Likewise, owners of Euler Beats Originals receive an 8% royalty each time the royalty is subsequently sold.
Offer artists a different place to exhibit their work
Traditionally, artists have had to rely on an intermediary to make their work accessible to the public: galleries, record companies, publishers and others.
To sell NFTs, artists can use different NFT marketplaces and platforms, such as SuperRare, Foundation VIV3, OpenSea, NFT ShowRoom, and Axie Marketplace.
For art collectors, NFTs are a way to make a profit. You can buy a crypto work of art with the hope that its value will increase in a few years. Then you can resell it at a profit.
Cryptographic art scene
The first experiment in crypto art was carried out by Anil Dash and Kevin McCoy, who wanted to create “monetized charts”. The idea arose when people shared media on Tumblr without any compensation or attribution, leaving artists dry when it came to capitalizing on their work, even though the work was very successful.
McCoy and Dash were successful in creating the first blockchain-based method of claiming ownership of a digital artwork, and they did not patent this idea. They believe that technology should allow artists to control their work so that others cannot make it their own without their permission.
By creating monetized graphics, the duo wanted to prevent technology from becoming another method of exploiting artists. Dash believes their vision of empowering artists has not come true, although it has created a lot of “commercially exploitable hype.”
After them, John Watkinson and Matt Hall created a collection of pixelated-headed collectible characters. They made 10,000 of these CryptoPunks and sold 9,000, keeping the rest to themselves and hoping they would increase in value over time.
Initially, this project didn’t get a lot of hype. But when Mashable wrote an article about CryptoPunks’ influence on digital art, the Punks sold out in a single day. A recent sale of a Punk, CryptoPunk 7253, also known as Covid Alien, grossed $ 11.75 million at Sotheby’s.
NFT and sports
The NFTs have also caused a sensation in the world of sport. Many people around the world watch sports, and many of them are die-hard fans who would pay thousands of dollars for their favorite player’s autographs or a signed item.
NBA Top Shot pioneered sports NFTs by allowing fans to bid on digital trailers. Highlights were called “moments” and buyers could keep them in their online portfolios.
With over a million users, NBA Top Shot is among the most successful NFT projects. As of February 2021, $ 230 million had been spent on the platform for trading and purchasing digital collectibles.
The crypto market overheated in 2019 and the following year prices for crypto artwork exploded. While cryptocurrencies like Ethereum and Bitcoin have seen their price increase, the value of NFTs has also increased.
What future for NFTs?
As for the future, NFTs appear to be doing well, despite the pandemic and changes in the crypto market. Mintable, an NFT marketplace backed by billionaire Mark Cuban, raised $ 13 million in its Series A round. Cuban was not the only high-profile investor involved in the project. Other investors, such as Expedia Group, 640 Oxford Ventures, Spark Digital Capital and Digital Finance Group, also attended the event.
Where to buy NFT art?
You can buy NFT artwork in several markets, including:
- Clever gateway
- Super rare
- Asynchronous art
- Known Origin
All of these platforms contain different types of artwork, such as music, digital paintings, images, PDF files, etc.
Alternatively, you can buy NFT artwork at art-house auctions, such as those at Sotheby’s or Christie’s. Sotheby’s sold its first NFT at an online auction in June this year.
Meanwhile, Beeple’s $ 69.3 million work was sold at Christie’s.
Where to sell NFT art?
If you are an artist and want to know where to sell NFT art, you can check out the following platforms:
- Super rare
- Known Origin
- Atomic market
- Myth Market
- Enjin Market
Another way to sell your NFT art would be to auction it off at an art house. Even the youngest artists are getting into the action at the big auction houses. Eighteen-year-old FEWOCiOUS is Christie’s youngest featured artist, his digital art has sold for an impressive $ 2.1 million.
NFTs are extremely popular and make millions for artists. While not everyone who makes an NFT will become crypto art millionaires, NFTs have debunked the myth that digital art isn’t profitable.