How Are NFTs Changing the Art World?
Jun 10, 2022
It seems non-fungible tokens (NFTs) are constantly in the headlines. That’s especially true for art lovers. Their world is becoming dominated by news of the latest major NFT releases and the fortunes made overnight by crypto artists.
But what are NFTs, how are they changing the art world, and what can we expect to see in the future thanks to this new technology?
We’ve put together this helpful guide to understand NFTs, cryptoart, and take a peek into the future of this strange new technological phenomenon.
What is an NFT?
A non-fungible token (NFT) is a bundle of information stored on a blockchain that links to a unique, one-of-a-kind asset. That unique asset can be any kind of digital information: from an image file to a sound file to a tweet and beyond.
They are called non-fungible because — unlike cryptocurrency that is also run on a blockchain — they aren’t all equally exchangeable.
When you have a dollar, it is equal to every other dollar in existence. That is called fungibility. Similarly, when you have a bitcoin, it is equal to every other bitcoin in existence.
But NFTs are connected to specific assets. If one NFT is connected to a GIF of a cat and the other is connected to a song about a cat, these are not the same thing. People can sell these NFTs for any price they want, and it is up to buyers to decide if they are worth the asking price.
NFTs have allowed artists, particularly digital artists, to make money from their work by selling to the public. They can create (or mint) an NFT for an image they make and sell it on the market. A blockchain, most popularly Ethereum, will track who owns it — the same way blockchains track the ownership of cryptocurrency.
One especially attractive feature to NFTs are smart contracts. These can be built into the NFT itself, and artists are using them to build in an automatic royalty paid to them every time the NFT is resold. This has an obvious appeal for creators, but there are many applications for smart contracts beyond the art world.
The first NFT is considered to be Kevin McCoy’s Quantum (2014), though they didn’t start making headlines until early 2021 with Beeple selling his Everydays: The First 5000 Days at Christie’s for $69 million.
Today, many digital artists are using them to finally have a way to make money on their art by directly selling to the public. Previously, they would either need to print off a physical copy or make their art in the context of another project — like an ad campaign, film, video game, etc. NFTs allow them to sell the “original” work of art, just as painters and sculptors and all other kinds of visual artists are able to.
What do you buy when you buy?
One of the biggest controversies around the explosion of crypto art is this question: what am I actually buying when I purchase an NFT?
Owning an NFT does not give you copyright of the image. In fact, other people can still access the digital image and make copies as much as they want, storing them on their own computers to view at their leisure. It also doesn’t give you a physical object of the work of art.
Buying an NFT gives you a kind of “ownership” over the “original” digital artwork. It’s similar to buying a certificate of authenticity for a painting, though not necessarily the painting itself.
If this sounds strange, you’re not the only one. Many critics point to this as lack of any real ownership of the art as a fundamental issue. Others are not so concerned. Those who see virtual reality worlds (like the much talked about Metaverse) as the next big thing think that NFT art will necessarily become the way most art will be bought and sold in the future.
Where can I buy and sell NFTs?
The past year has seen an explosion of NFT marketplaces. There really isn’t enough room to list them all, but some of the biggest sites include:
- OpenSea: This is the largest NFT marketplace right now. It has all kinds of assets to buy, like collectibles and artwork, but also other assets like domain names. It also allows you to create NFTs easily. It’s compatible with more than 150 different kinds of payment options.
- Rarible: Another major player is Rarible, which is entirely based on the Ethereum block chain. Like OpenSea, you can easily buy and mint NFTs on the platform.
- SuperRare: This NFT marketplace is hyper-focused on digital artwork. Many features appeal to artists, including smart contracts that pay royalties to creators every time a work is resold.
While there are plenty of other platforms to explore, many of them quite reputable and honest, one should make sure to learn a lot about a marketplace before sending it money. The explosion of popularity in the NFT market has given rise to many scams, thanks to how many people are both interested in buying and not super sharp on the technical details. Be safe and do your research.
Where do NFTs go from here?
Crypto art and collectibles have been a major throughline for much of the NFT conversation. There are also many communities where membership is now built around owning an NFT. But these are the early days, and there is no doubt that new applications for this blockchain technology will be used in the future.
In that sense, NFTs are here to stay. But what is the future of crypto art in particular?
Opinion is divided. Some believe it is a Tulip Mania style fad that will end in a few people making millions and many more losing everything they put in. When you buy a work of art, whether it’s value goes up or down, you still get to enjoy it. But with NFTs, you don’t get to enjoy it any more than anyone else. That means the only real reason to buy is the hope that it will increase in value someday.
Others believe that it will slowly take up the entire art market. Even physical artworks will begin to use NFTs for certificates of authenticity, and as virtual spaces become more prominent in our lives, we will want to put art up on those computer-generated walls. And that art will come from NFT marketplaces.
Without a crystal ball, who is to say? But no one can deny that, in the short term, NFTs will continue to be a major part of the conversation and art market.
Courtney Christensen, Christopher Barnekow, Kathleen Guzman, Alasdair Nichol