What is crypto Art and why does it shake up the art industry?
For a long time digital art was undervalued, mainly because it is freely available. A crucial ingredient of scarcity is added by NFTs, helping artists to create financial value for their art.
It all started with CryptoKitties. Canadian company Dapper Labs has created dopey-looking cartoon cats in December 2017, and they debuted as tradable collectibles, something like cards with Pokemons, but for the bitcoin era. A unique string of digits was associated with every image. This string is called NFT, a cryptocurrency “non-fungible token”, which can be traded on the Ethereum blockchain platform, granting ownership of a particular kitty to the holder.
“Non-fungible” means that it is unique and anything else can’t replace it. An example of fungible cryptocurrency is bitcoin - you can trade it for another bitcoin, and you will get the same thing. However, a one-of-a-kind trading card is non-fungible. By trading it for another card, you will have something completely different.
How do NFTs work?
For a long time digital art was undervalued, mainly because it is freely available. A crucial ingredient of scarcity is added by NFTs, helping artists to create financial value for their art.
As mentioned before most NFTs are a part of Ethereum blockchain. Like dogecoin or bitcoin, Ethereum is a cryptocurrency, but NFTs are also supported by its blockchain, storing some extra information and making it different from, for example, ETH coin.
The main purpose of NFTs is to give you something that can not be copied: work’s ownership (though artists can still have reproduction rights and copyrights, like with physical art). Comparing it to physical art collecting: you own the original Monet artwork, but anyone can buy a print.
NFTs are selling like hotcakes. In the recent report by NonFungible.com, market insights on NFTs were released, showing that in 2020, trading of NFT was worth over 250 million dollars, increased by almost 300% from the previous year. On online platforms like OpenSea, Rarible and Nifty Gateway people shell out big sums of legal tender and cryptocurrencies for buying tokens, that represent ownership of digital objects.
It might sound bizarre, that’s because it is! The idea of buying digital images with symbolic ownership, which can be screenshotted or captured within seconds seems either ironic or idiotic. That’s exactly what NFT proponents are solving now: the near-impossibility of digital artwork monetizing.
“As a mechanism, NFTs makes it possible to assign value to digital art, which opens the door to a sea of possibility for a medium that is unbridled by physical limitations,” says Noah Davis, a specialist in contemporary and postwar art at Christie’s.
Let’s talk about NFTs’ benefits.
- For artists.
NFT gives artists a way to sell their artwork that there otherwise might not be many other markets for. Also, there is a feature that enables an artist to receive a percentage every time the NFT changes hands or is sold. So if the artwork gets super popular and increases in value, the artist will see some of that benefit.
- For buyers.
An obvious benefit of buying art is financial support for artists you like. Another benefit is some basic usage rights, for example, you will be able to set it as your profile picture or post it online. And of course, you can brag about ownership of digital art with a blockchain entry. - For collectors.
Like any other speculative asset, you buy NFT and wait for its value to go up one day, so you can sell it for a bigger price. In the end, you can have a good
Even collectors, buyers, and artists benefit from NFTs, this phenomenon is not without a dark side. There are barriers to entry - it requires tech-savvy and costs money to sell an NFT. It could possibly prevent some artists from joining in, as many artists of color have long been marginalized in the traditional art world. Another thing that legal experts are thinking about is how copyright laws will interact with this new technology as some of the artwork has been copied and sold as an NFT without an artist's permission.
How to get started with a digital art marketplace?
Selling or buying NFTs usually requires a membership. With blockchain technology, having a digital wallet is very helpful, but you can also get money from sales or pay for NFT through PayPal, for example.
Here are some digital art marketplaces, powered by blockchain:
- SuperRare
- bc/a
- Portion
- MakersPlace
- Sedition
- Rarible
Some NFT marketplaces enable people to showcase their purchases, like in online museums or galleries. The trend is welcomed by some digital artists. Many platforms are simple to use: upload the work, automatically “mint” NFT, and wait for offers to rain in. Sums are usually higher than if artists would receive trying to sell their works online or as prints.
Extraordinary opportunities are offered to artists, collectors, and galleries by the digital world, and it seems like a fantastic compliment to traditional art.
