What is NFT Crypto art? NFT Art is digital art that is signed and backed by an NFT. NFT stands for Non-Fungible Token.
What is a Non Fungible Token you ask, it is a weird term to describe a unique digital signature backed by blockchain technology that verifies the ownership of something.
The same way that we use blockchain technology to make cryptocurrencies such as Bitcoin, Ethereum or Dogecoin the same, NFT’s use blockchain technology to make each one unique.
Cryptocurrencies are called Fungible Tokens.
NFT cannot be swapped for another one, they cannot be copied. Each one is unique.
How did the NFT art craze begin?
For the mainstream world, it all started in March 2021 when Mike Winkelmann, better known as Beeple (or Beeple_crap on Instagram) sold an NFT Artwork called “The first 5000 days” for the crazy sum of $US69,346,250. The truth is, Beeple had already sold other NFT backed artworks for fantastic prices as early as 2020 when he sold an NFT-backed artwork called “Crossroads” for $US66,666.
The other truth is, that over $100,000,000 in NFT artworks were sold by the end of 2020.
Now if you look on Instagram, every artist is jumping on the NFT art bandwagon, hoping to strike it rich.
Why are artists using NFT for their art?
Digital artists have suffered more than most artists when it comes to losing income or having their digital artworks stolen through copyright infringements. In the digital world, copying art is one of the easiest things to do.
By attaching an NFT to their digital art, digital artists are taking greater control over the copyright of their artworks and intellectual property.
Top 6 Benefits of NFT art for Digital Artists
Think of NFT art for digital artists as like a limited edition proof art print, hand signed and authenticated by the artist.
1. No two NFT’s are the same.
2. By having the NFT art backed by the blockchain, there is also the added benefit of being able to verify the veracity of the crypto artwork as it is registered as part of the block chain when created.
This is because each NFT token can be programmed to contain distinguishing information such as artists name, owners name and other parameters that can act as a unique digital signature.
3. The digital signature makes the NFT token distinguishable from other NFT’s, and ensure they can be traced via a blockchain ledger – which is basically like a digital accounting ledger that contains a record of each NFT created.
4. This also means that once it is in the ledger, it can not be destroyed, replicated or removed.
5. The other added benefit is that ownership can be traced back to the originator/creator.
Since the first artwork was sold, provenance has always been an issue. By backing an artwork with an NFT, you can now trace the artwork’s ownership from the artist on to every subsequent owner.
6. Another benefit is that NFT’s can be programmed to ensure an artist receives a percentage of a sale every time the NFT crypto artwork is unsold to a new owner.
7. It’s a new category of art that can be dominated by emerging artists. Even Instagram now has a Hashtag for #NFTArt that has over 70,000 posts and growing exponentially daily.
How to make NFT Art – and how to sell NFT art
There are many marketplaces to create NFT art.
You do not need to be technical and you do not need to understand how the blockchain technology works.
What you do need to know is that when you decide on an NFT blockchain, ensure that the NFT is issued using a popular one such as Ethereum. Because if you pick one that is based on a more obscure blockchain, then it can only be bought and sold on a platform that supports that blockchain.
Now this is where it starts to get a little tricky and this is why NFT marketplaces are gaining popularity.
When you create an NFT, it is called Minting and lets say you choose Ethereum to mint your NFT, you will need to ensure you have an Ethereum wallet that supports the ERC-721 token standard.
You will also need to purchase Ethereum and this entails having to set up an account with a cryptocurrency platform, purchase the cryptocurrency and open a digital wallet.
Don’t be put off, it is actually simpler than you think.
Now the rest is probably easier to follow if you watch the following videos.
One thing to keep in mind is that there are transaction fees associated with creating NFT art, fees such as a “Gas Fee” which can be anything from $5 to $10 depending on the demands of the blockchain at the time you create your NFT art.
I’ll explain more about Gas Fees in the section The Risks with NFT Art.
These are fees that you may have to wear if your NFT artwork does not sell.
1. How to Create NFT Art on Rarible Video
2. This second video covers a few more topics but I have the video starting at 8min 41 seconds where it covers OpenSea specifically.
How to make money with my art
When Beeple first started his journey in 2007 to create a digital artwork a day he had no idea how he could ever make any money off digital art as you can’t do much with it except by turning it into physical art such as art prints.
In recent times, NFT was being used to create digital in-game assets which could be bought and sold. It was also used to sell unique digital collectables such as sports cards and the like.
When Beeple decided to sell some of his digital art as NFT crypto art, he hit a small jackpot.
Now this doesn’t mean you have to be a digital artist to sell NFT crypto art.
There are no so many artists who work in traditional media who are creating NFT art to sell based on physical art they have converted to digital.
Some are even destroying their original physical art once it is converted to NFT crypto art, just so that it becomes even more rare and thus valuable!
Is that crazy!
Though some artists are providing a digital NFT artwork copy with every physical artwork they sell. A bit like a digital certificate of authenticity, where only the owner of the original physical work would own the NFT version of the same artwork.
Pretty genius if you ask me.
You can also list your NFT art on various platforms such as rarible.com and earn money from each sale.
I am also now seeing established artists selling NFT art versions of their physical artworks directly to their fans, cutting out agent fees, gallery fees etc
This is a much faster way to instantly earn more money as an artist than having to create physical prints to sell where the market for prints may be quite small for a lesser known artist.
Finally, NFT art can be programmed to ensure that every time the artwork is sold to a new buyer, that the original artist will receive a percentage of the sale. That means an artist can be earning income from early works as their career matures and the value of their artworks increase and are on-sold.
The risks with NFT Art
NFT comes with many hidden costs and complicated start up processes and costs that can eat into your profit margin if you have not done your homework.
One of the common and fluctuating fees is a Gas Fee. A Gas Fee is a charge that is used to offset the computing power needed to process and validate transactions on the blockchain. This fee will fluctuate depending on the day, time of day and demands.
If governments start charging a carbon tax for the power required to process blockchain requests, this price could skyrocket – pushing NFT art creation out of reach for ordinary artists.
The other fees you may be charged is when you convert from one cryptocurrency type to another.
Many crypto wallet companies will charge around 5% of the deposit amount whenever you purchase cryptocurrency.
It seems as though there are fees scattered along the process to creating and selling NFT Art.
You will need to keep track of these to ensure you are not creating and selling NFT art at a loss.
Another risk is not associated with actual NFT Art itself but is driven by the gold rush of NFT Art.
Criminals have begun using BOTs (Automated ‘robots’ that are programs designed to do a few specific tasks online) to trawl the internet, and automatically create NFT Art based on artist’s digital work or physical work without their permission and then selling it.
Basically stealing an image and then selling the rights.
One final is risk that I am seeing is the risk of fan and collector backlash. As artists are starting to embrace NFT art and listing NFT art for sale, I have started seeing more and more comments on social media from followers and fans of artists attacking the artist for embracing NFT art and selling it.
On one recent occasion, I reminded the follower that the artists has a right to earn an income and that NFT art is in effect no different to an artist selling a numbered print of their artwork.
At least with an NFT art work, you get the guarantee that it is backed by something that can prove it’s veracity and can be tracked and that it is unique.
Finally, if you find your work has appeared as an NFT Artwork and you did not create it, you will need to serve a legal notice to the marketplace where it appears and serve a take down demand.
You can do that via the DMCA website found here.
While I do believe we are in an NFT crypto art bubble with what seems like everything is now being turned into an NFT, more and more artists are catching on to the use of NFT for their artworks.
I believe that the NFT market may crash for many. I see so many artists creating open edition NFT artworks to sell, hoping to cash in on the NFT art craze.
I wonder if it will be like the tulip mania, and in the end will people be the owners of worthless digital assets.
Only time will tell.
My experience with following blockchain technology and cryptocurrencies since the early days tells me this will end up being something of a valuable asset whilst the mainstream will cry that it is a scam.
I missed that boat, I’ll try not to miss this one.
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