By now, we all have heard about Grimes selling $6 million worth of digital art or the Nyan cat GIF bought for roughly the same figure. Let's try and deconstruct the multimillion dollar-worth artistic success stories and talk about what exactly NFTs are and how they function, how they can help sell and recognize your work, and how to actually make one. Who knows, maybe they will even let you in a Soho gallery free of charge eventually?
What is the Non-Fungible Token, and how does it function?
Non-Fungible Token (NFT) is a blockchain token that represents a particular asset's ownership. Unlike any other kinds of tokens, NFT can't be copied or duplicated, which is why it's called non-fungible. Such procedure will either be impossible on the code level or will contain precise information about reproducing afterward and thus will lose the original's status. In fact, even if two NFTs include an identical object (a piece of music or an image), the blockchain record will still differ. This feature allows the issuer or owner to track the token's ownership regardless of whether the assets were tokenized as tangible (a home or a painting) or digital (art or song). Information about the owner is also included in the NFT, which further complicates an attempt to make a counterfeit. Due to this, the chances of selling it at the original price are minimal, if any.
NFT's concept of uniqueness explained
Consider the following scenario: you have a five-dollar note and five one-dollar bills. Both of these items are interchangeable; you may use them to pay for products, and their worth is identical when compared: both in terms of the object they describe and value. However, a rare 16-century coin is something rather one-of-a-kind now, and it's no longer a payment method. This historical coin might be equated to the NFT's value term: having lost its transactional value, it no longer serves as money and is a collectible.
The historical problem of digital art
Walter Benjamin, a 20th-century German-Jewish philosopher, reflected on the issue of reproducible (what can be referred to as "digital" today) art in his essay "The Work of Art in the Age of Mechanical Reproduction" (1935). In this work, the philosopher proves that mechanical reproduction devalues an art object's aura (uniqueness). He also states that it has become challenging to draw a line between an original and a copy since, for example, there are printing and circulation. While Benjamin raises a range of other philosophical questions on the subject of art, the matter of connections between an original and a copy still stays painfully relevant for digital art. Before NFTs, there actually was no original: every item would simultaneously be an original and a copy. The idea of NFT is that an object acquires a digital signature just as a work of art contains the author's signature: this is a particular feature ensuring the artwork is unique. Today, in terms of digital art like GIFs, videos, memes, digital paintings, and all the possible other forms, the NFT market is an instrument allowing digital artists to monetize their work. The good news is that purchasing an art NFT isn't equal to buying intellectual property. Therefore, it's legal for the Internet community to continue using these products.
What actual benefit does NFT bring to creators?
We've established that the first and foremost benefit NFT brings to creators is the possibility of selling it as original and still leaving it accessible to look up on the Internet. The advantage of monetizing is understandable; there are, however, other perks an artist gets after tokenizing their work. An additional benefit here is that non-fungible tokens have a feature of paying a percentage every time the NFT art token is sold or changes hands; such a feature can be enabled by the artist. This will ensure that if a work of art gets super popular and skyrockets in value, its author will get due credit.
Indirectly, the second benefit boosts the artist's capital, but not only the one measured in money. By tapping into the community of artists on OpenSea and other NFT-marketplaces, you get a chance to speak to a whole new audience. For the artists with an existing audience, introducing their art to NFTs would send a message of keeping up with technology and, once again, simplify the process of purchasing a piece of art.
Apart from serving as a possibility for artists to distinguish and sell their work for a fair price, non-fungible tokens are used in many different areas where they are engaged in even more unusual cases.
How to actually create NFT art?
You can create your own NFT digital art at several marketplaces that have sprung up around this technology, allowing users to purchase and trade them. The list includes OpenSea, Rarible, and Grimes' pick ― Nifty Gateway ― but this is not a complete list, of course.
The list of necessary things includes a crypto wallet and a piece of art itself. The wallet would be a place you'd have to store all of the cryptocurrency (respectively, NFTs too).
After choosing your wallet, you'll need to fund it with crypto. It all boils down to personal opinion when it comes to choosing which cryptocurrency to utilize. It's crucial to set up an account on a reputable exchange, which Stobox specialists can help you choose. Connecting this wallet is a necessary element of any NFT marketplaces registration process.
Although a non-fungible token is a genuinely great tool carrying a weightful mission, like any other disruptive solution, it has some loopholes that have to be minded.
From the legal point of view, it can be the issue of copyright. The thing is, purchasing an NFT isn't equal to buying intellectual property. Therefore, it's legal for the Internet community to continue using these products. Like with classic arts, selling digital art objects does not usually involve such objects' copyright transfer. This limits what can and cannot be done with art ― the buyer usually only gets the right to use such work for personal pleasure, but not for commercialization. While it is possible to buy commercialization rights or even all copyrights, this will require an entirely new negotiation round, which should result in a property rights agreement or license agreement. Otherwise, the possession of content is significantly limited and does not allow the buyer to commercialize it as digital content or art object on goods (applied to packaging, producing merch or finished products, and many other options in the manufacturing sector).
Non-fungible tokens are nothing less than a disruptive instrument democratizing the art industry and bringing artists closer to their fans, buyers, and art dealers. Thanks to its primary functionality ― non-fungibility ― their usage opens possibilities not only for creators but also enables ownership tracking, fraud prevention, and a number of other things. If you are interested in tokenizing your art and want the process to go as smoothly as possible, contact our team to get a free 30-minute consultation.