What is NFT Art & Why Digital Artists Should Pay Attention
By now, you’ve probably heard that digital artists are making a killing on the new, booming NFT art market. Some artists have earned thousands and even millions of dollars selling their digital creations on the blockchain.
But maybe you’re still unclear about what exactly NFT art is and why it matters to you as an artist.
In this article, we’ll learn what NFT art is, how it’s turning the art market on its head, and why you, as a digital artist, should care.
What the Heck is an NFT?
In simple terms, an NFT is a cryptographic token that creates scarcity for a digital object and makes it possible for people to sell, buy and collect digital objects online.
Technically, an NFT is the registration of ownership of a digital object on a blockchain. It basically acts as a stamp of authenticity for a digital object. This digital object can be any sort of media, including art, video, gifs, text, you name it.
NFT stands for “non-fungible token.” “Non-fungible” means that each token is unique (or semi-unique in the case of digital objects released in multiple editions). Unlike a dollar that can be exchanged for any other dollar, because they have the same established value, you wouldn’t be able to exchange one NFT arbitrarily for another.
NFTs are usually connected to the Ethereum blockchain. A blockchain is basically a ledger that exists online. It keeps a publicly accessible record of who owns what, just like the networks that ground cryptocurrencies like Bitcoin, Ethereum, or Dogecoin.
How Do Artists Create NFTs?
Here’s a quick rundown of how it works. An artist signs up to an NFT marketplace, like OpenSea or Rarible. When they “mint” or create their NFT through the platform, their artwork and the unique bit of information about that artwork — including its smart contract — is stored on the blockchain.
NFT artworks can be minted as single 1/1 editions or multiple editions. The NFT now proves the artist owns the work and will track its future ownership and price history on-chain going forward.
Through these NFT marketplaces, artists and collectors can send and receive offers and bids on the works, receive and send cryptocurrency payments and transfer the ownership of the work. The NFTs are stored and traded directly from users’ Ethereum wallets.
Why You Should Care about NFTs
Perhaps you’re thinking that NFTs are too technical and confusing, or maybe you think they’ll blow over, or you’re boycotting them because you’ve heard about the environmental costs associated with transactions on the Ethereum network.
Regardless of whether you intend to jump on the NFT bandwagon right now, if you’re an artistic professional you should be aware of this new technology, so you can make the best decision for your art career.
Protect Yourself from Scammers
Where opportunity abounds, you’re bound to find opportunists.
The current NFT art market is a gold mine for many artists, but unfortunately also for scammers. Recently there have been cases of scammers impersonating artists on open NFT marketplaces like OpenSea or Rarible and selling works that belong to other artists.
These open marketplaces, like OpenSea or Rarible, do not have a surefire way of confirming artists' identities. They place the burden of confirming the identity of the NFT owner with the buyer and the community.
Curated platforms are far more secure. SuperRare and Nifty Gateway are invite-only and require artists to submit short 1-minute videos when applying. Their curators personally review each application, so the artists’ identities are verified.
Since the whole success of the NFT market depends on people trusting that those who minted artworks are who they say they are, hopefully, the marketplaces will find an easier and more secure way to verify identity.
However, in the meantime, we’re not sure of the extent of the issue. It could be worth stating your view on NFTs on your social media accounts and/or periodically checking NFT marketplaces for artworks minted without your permission.
NFTs Are Probably Going to Be Around for a While
Although I think the NFT art market is experiencing a bubble due to massive hype from artists and collectors alike, I do believe that this technology is here to stay.
The Rise of Cryptocurrencies
The global cryptocurrency market is anticipated to grow at a compound annual growth rate (CAGR) of 30% from 2019 to 2026. The massive growth and acceptance of cryptocurrencies have enabled many people to earn vast amounts of money through investing in and trading cryptocurrencies.
To avoid paying taxes that are required when pulling cryptocurrency out to fiat currency, many people are looking at NFT art as a way of spending their cryptocurrencies and as another asset class to invest in.
The continued growth of cryptocurrencies should continue to bolster the growth of the NFT market, which is already estimated at $338 million.
Acceptance by the Art Establishment
This month, the Instagram-famous artist Beeple made history for the sale of a completely digital artwork at a major art auction house. His artwork “Everydays: The First 5000 Days”, a collage of 5,000 works that he made every day since 2007, sold for a staggering $69 million at Christie’s!
And it appears that Sotheby's is following close behind. They recently announced that they too will be auctioning off an NFT artwork from the elusive digital artist PAK.
NFTs Solve Real-World Problems for Digital Artists
I’ll get into this more below, but NFTs allow artists to create scarcity for their digital work and prove ownership. With these two factors established, collectors can now collect “rare” and “scarce” digital art.
NFTs Echo Our Societies Move to a Digital Existence
Our worlds have never been more digital than they are today. People spend so much time and effort on their identities on social media platforms. Digital files and images are linked directly to influence, and influence to power and money.
It seems only logical to me that many of these artworks, photographs, and memes that have been exchanged and enjoyed far and wide would have value in the eyes of new NFT digital art collectors eager to own a piece of humanity’s digital legacy.
NFT Art Is a Game-Changer for Digital Artists
This technology is incredible in that it has the ability to generate scarcity and establish ownership and authenticity for internet-native art so that digital files can be sold, collected, and monetized.
Another (Very Profitable) Way to Sell Your Work
If you’re a digital artist and you’ve been selling your work, you’ve probably been selling through one of the following options: print-on-demand products, advertising or branding partnerships with commercial businesses, open edition or limited edition prints, or licensing.
But unlike analog artists who have been able to sell their original artworks to collectors in their original native state, digital artists haven’t really had this option. They usually have to translate their digital artworks into some other form or create specific commissions for clients. And if you’ve been working with video or animation, your options may have been even more limited.
This ability for digital artists to sell their artworks as digital files with defined ownership and proof of authenticity is really revolutionary.
Up until this point, as an artist, it’s been a challenge to protect the ownership of your digital art. Artists have protected their digital artwork through watermarks, encryption, passwords, disabling right-click, and otherwise limiting the distribution of their work. They’ve posted only low-res versions online or reverse Google image searched their artworks to look for people stealing their work.
However, none of these methods truly protects the ownership of your work. Plus, you want your artwork circulating so you gain recognition and become more well-known and popular.
So, NFT art is game-changing, because it allows the public (at least in the case of curated NFT marketplaces) to confirm the authenticity and ownership of your work.
Royalties & Passive Income
Lastly, but not least, NFT art is unique because it gives artists the potentially life-changing opportunity to earn royalties on secondary sales of their artworks.
Unlike traditional selling options where you sell an artwork once and never see any profits from sales of the work down the road, with NFT art, artists have the opportunity to specify their royalty rate in a smart contract. This means that every time the artwork is sold you would receive 10% or whatever you specify as profit.
In most NFT marketplaces the royalty rate is set at 10%, but some marketplaces such as Rarible and OpenSea allow you to select your own royalty percentage.
For artists whose careers take off or whose works change hands often, this could be a wonderful passive income stream to help support your career as an artist.
Your decision to enter the NFT world is completely up to you, but I do think that any artist with an online presence should be aware of this new technology that has the potential to radically influence the direction of the global art market.
