Before non-fungible tokens, it was challenging to create digital scarcity for assets. While the NFT ecosystem is still in its early stages, there are many intriguing initiatives to investigate, some of which already provide significant value to creators and consumers.
Leaving the hoopla aside, digital NFT artwork combined with the art market can significantly enhance and even change the art business in a variety of ways, particularly in the case of modern art.
The Application of NFT in the Art World
For a simple reason, digital art has become one of the most frequent use cases for non-fungible tokens today.
Real-world artworks can be tokenized to help promote authenticity and transfer ownership to the creator or the highest bidder interested in acquiring a piece of art.
However, the apparent misappropriation of digital art through the creation and distribution of digital reproductions of virtual artwork has long been a concern. The need to digitally verify the validity and scarcity of virtual artworks is critical, which NFTs have addressed with encryption and blockchain.
In a word, the value of crypto artworks is derived from their digital validity and ownership. Take, for example, CryptoPunk, one of the first NFT initiatives launched in 2017. While anybody may download or save an image, establishing ownership of a specific image is more complicated. What makes NFTs valuable is because they belong to a single person rather than the artwork itself.
The booming industry of digital NFT artwork
Through its partnership with anonymous digital artist Pak and NFT marketplace Nifty Gateway, Sotheby’s, one of the world’s largest brokers of fine and decorative art, jewelry, and collectibles, has become the latest established brand in the art to delve into NFTs (non-fungible tokens).
The Fungible Collection, a “new collection of digital art changing our notion of value,” was sold for more than US$17 million (£12 million) by the auction house.
Some pieces, such as “The Switch,” a monochromatic 3D structure that the artist will alter at an indeterminate time in the future, drew bids above $1 million.
NFTs are tokenized representations of assets that may be exchanged on a blockchain, the digital ledger technology that underpins cryptocurrencies such as bitcoin and ethereum. NFTs are the polar opposite of bitcoins, which are fungible and can be exchanged like for like. The underlying assets are unique in some sense and cannot be transferred like for like.
Because of its rarity, Christie’s was able to sell digital artist Beeple’s NFT “Everydays” for an eye-popping US$68 million back in March.
Why might an artist consider turning their work into NFTs?
Aside from the aforementioned mind-blowing financial benefits, an artist can decide to turn their work into NFTs for a multitude of reasons.
The following are just a few of the many more functions that NFTs can perform:
- Patrons/community members are directly rewarded without having to share any percentage with the middlemen.
- The gap between the patron and the artist is minimalized.
- Patrons are rewarded with NFTs in the form of gifts, badges, and memberships.
- Members are rewarded with NFTs for making repeated contributions.
- Artists are able to develop digital collectible series that can be purchased, sold, and exchanged on online markets.
How can artists create an NFT of their art?
NFTs allow for the development of hitherto unimagined business models. Artists can include requirements in an NFT that ensure they receive a portion of the earnings every time it is resold, so they benefit if the value of their work rises.
NFT makes art collection more accessible to the general public. New artists, who are less well-known, can advertise and sell their works without having to spend too much for galleries or auction houses.
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