Not only have non-fungible tokens influenced the gaming world, but they’ve also caused some profound changes in other areas, especially in art. A growing number of digital art creators and buyers has brought more attention to this innovative market. With that attention have come new questions and concerns. We’ll investigate some of them by diving into the history of NFT art, discussing its pros and cons, and some of the most interesting public NFT purchases that are in the public eye.
For those who are new to NFTs, we recommend reading our article on NFTs . Briefly, in digital art, a non-fungible token is a digital asset that proves ownership of the original piece of artwork. If you own an NFT image, you have a digital signature in the way that a great work of art might bear the signature of the person who created it. But why is it valuable if anyone can view it online? Can’t we just copy-paste the image without buying it? Yes, we can, but it is like having a copy of The Starry Night by Van Gogh. Though you have it, the original painting is not in your possession. NFTs give you the right of ownership, as they live on a blockchain and contain the history of all the transactions, only one person can own it and that is what makes it rare.
How it all started
Crypto art has dramatically changed the art world and flooded it with a lot of money. But how was this new industry created?
The earliest case of an NFT is a video clip called Quantum, which was designed by a married couple — Kevin and Jennifer McCoy. Interestingly, when Kevin and coder Anil Dash placed the video on a blockchain, they originally called this technology “monetized graphics” with the term “NFT” only popping up in 2017. This is when CryptoPunks came along. It is one of the most well-known series of collectible digital characters and is considered to be a starting point for the crypto art industry.
Since that time this industry has been evolving and gaining popularity. Recently, Quantum was sold for $1.4 million during an NFT sale in the famous auction house Sotheby’s. The buyer claimed to be happy to possess the first-ever NFT as it is a piece of crypto history. This is a notable example of how NFT art resonates with their admirers.
However, the Quantum is not the most expensive NFT purchase of all. Here are some of the recent prominent cases worth our attention:
- A 12-year-old Nyla Hayes has made over $1.6 million by selling her NFT collection called Long Neckie. They are a series of drawings depicting women from diverse backgrounds having long necks. The young artist is planning to spend the money from the sale on traveling around the world in search of inspiration for new projects.
- Another high-profile case happened when digital artist Mike Winkelmann (aka Beeple) sold his “Everydays: the First 5000 Days” for 69.3 million making history by becoming the seventh most expensive artwork sold by a living artist.
- A Canadian musician and artist Grimes has sold NFT artworks in total worth $6 million. It was a series of 10 pieces, called WarNymph, that included visuals and an exclusive demo version of Grimes track.
Benefits of NFT Art
When artists only sold their works in the physical world, they did it through auctions. Most buyers couldn’t reach sellers with their offers. With the emergence of NFT marketplaces it is now feasible to trade online on a global scale without intermediaries.
Seizing an opportunity to reach global audiences, artists can generate income by monetizing their works and receiving royalties. It means that each time their piece of art is resold, they can get 8–10% of all future sales. The more times their work is resold, the more popularity and profit they gain.
Having the full history of transactions on a blockchain , the process of buying and selling NFTs is verified and more secure while anyone can track copyright ownership and origins of the creation.
For those buyers, who consider NFT artwork as investments rather than collectibles, purchasing pieces of digital art may be very profitable. Obviously it’s necessary to make wise decisions when trying to foresee which will be the promising NFTs. The moment their creator becomes more popular, owners of his work can resell them charging more.
Pitfalls of NFT Art
The process of NFT minting, as well as creating a new cryptocurrency, is called mining. It is composed of various complex schemes, computing power and, most importantly, a lot of energy. Thereby, the need to utilize extensive networks of processing machines results in a lot of carbon emissions. This is a huge concern, however, developers are planning to shift from mining to more environmentally friendly processes.
Another thing that might make people doubt NFTs is their value, which is solely based on cryptocurrencies. Cryptocurrencies are prone to price volatility. For instance, if the value of Ethereum drops, it automatically influences the prices on NFT artwork and may negatively affect trading profits.
Takeaways
As it is a young industry it hasn’t been all roses, but NFTs have definitely caused a radical shake-up in the art world and provided new opportunities for digital artists. With all the advantages mentioned, the most important ones are that NFTs have created a legitimate way to collect digital masterpieces and make investments in digital art. This industry has aroused considerable interest and the prices of recent purchases speak for themselves. This lets us know that NFTs are here to stay and surprise the world with new technologies.
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Originally published at https://idealogic.io on January 25, 2022.
