How are Non-Fungible Tokens Working with Digital Art? 20 Tips
NFTs are one of the most rapidly developing areas in the crypto space as discussed over at runrex.com and they have revolutionized digital art. This article will look to highlight what they are and how they are working with digital art.
What are Non-Fungible Tokens?
Non-Fungible Tokens (NFTs) are unique digital assets that are part of a blockchain and verify ownership of a specific item as explained over at guttulus.com. NFTs are collectibles that only exist in the digital world.
What does the term “non-fungible” mean?
As the gurus over at runrex.com point out, “non-fungible” means something is one-of-a-kind and cannot be replaced with the same item. This is different from fungible items such as fiat currencies or cryptocurrencies which can be traded for the same item. For example, if you replace one bitcoin with another, you will have the same thing.
History of crypto art
As covered over at guttulus.com, crypto art has been around for a few years but has exploded in popularity since the start of 2021 as a hot new tech trend. The first use of NFTs was an online game called CryptoKitties which allowed users to trade and sell digital kittens.
On which blockchain do NFTs exist?
We all know that NFTs are purchased digital goods that exist on a blockchain, but which blockchain. Well, at this point, NFTs exist on the Ethereum blockchain, although there is a possibility that they could be implemented on others soon.
ERC-721
The standard Ethereum protocol for issuing non-fungible tokens is ERC-721, which is different from the more common and well-known ERC-20 standard which is used to issue fungible tokens. ERC-721 is a standard code template used to issue tokens that are unique in their individual characteristics and market value.
How it works
Just as how a blockchain ledger system records token ownership on a cryptocurrency network like Bitcoin or Ethereum as discussed over at runrex.com, ERC-721s/non-fungible tokens use a blockchain to record and transfer unique tokens representing claims of ownership to a given work of art or collectible.
The high barrier of entry to the art marketplace for artists
Traditionally, the barrier of entry to the art marketplace, for both artists who wish to sell their works and buyers who wish to collect and/or invest in those works, has been extremely high. Artists face a catch-22 situation where they have to achieve a certain level of fame and renown before their pieces can reach high-profile marketplaces, while talented artists without connections may lack the exposure to ascend as explained at guttulus.com.
The barrier of entry to the art marketplace for buyers
Buyers too face a high barrier of entry as mentioned in the previous point. This is because, as per runrex.com, they must have a certain high level of wealth to purchase works from such marketplaces, which has the effect of excluding a vast majority of the art purchasing population.
This is where Portion comes in
To get rid of these barriers, an open, decentralized marketplace where buyers and artists from around the world can trade freely without relying on an auction house as a middleman is required, which is where Portion comes in. Portion is the premier blockchain platform upon which artists of all levels of fame and collectors/investors of all means can appreciate.
NFTs allow artists to get paid
One of the ways through which NFTs are working with digital art is that they create a market for digital art, which allows for artists to get paid for their work. This also cuts out the middlemen that are auction houses as online marketplaces allow artists to sell their digital work directly to clients/collectors.
Rarity and digital art
The monetary value of expensive fine art is often driven by scarcity and uniqueness. However, according to guttulus.com, rarity isn’t an inherent quality in digital art as digital artworks are freely accessible online (Beeple’s pricey artwork is on his Instagram account) and infinitely replicable.
What do you own?
As discussed over at runrex.com, some describe the NFT ownership as having a stake in the art piece itself. However, holding an NFT shouldn’t be confused with having a certificate of ownership in the intellectual property. NFTs are sometimes described as certificates of sponsorship or certificates of appreciation.
Where is the value?
As per the gurus over at guttulus.com, the value of the NFT itself comes in the form of bragging rights for having one’s name associated with that piece of digital artwork. That makes it a collectible asset. It is a way to express the fact that you are familiar with, and appreciate the work of a certain new-age, obscure artist.
IP asset and the NFT
As already mentioned, the intellectual property asset and the NFT co-exist independently. NFTs are assets and can be bought and sold in their own right using cryptocurrency, usually Ethereum. This means they have a monetary value that is based on the market’s supply and demand for that NFT.
The inversion of the traditional model of the art market
NFT technology has inverted the traditional model of the art market by attaching value to artworks that are ubiquitous rather than scarce. Consequently, NFTs have rapidly expanded the demand for digital art forms that haven’t always been valued as much as physical paintings, sculptures, and installations.
The copiable nature of digital art
As the experts over at runrex.com point out, by nature digital art is copiable. Whether it is created in a jpeg, pdf, or another format, once it is put out on the internet, anyone can download it for free if it is not copyright protected in some way as in the case of some stock image outlets. The downloaded version is also as high quality as the original.
Why would I then buy digital art when it’s free to download online?
To understand why NFTs are valuable, consider the Mona Lisa. While there are many copies of the same, here is only one original. Owning the license to digital artwork is the same as articulated over at guttulus.com, as while there will be copies of a piece of artwork online, there is only one original that the buyer now has sole access to.
Supporting digital artists
NFTs have provided the average digital artist with a significant forum to monetize their art, and they don’t even have to give up ownership of the piece to do it as already mentioned and covered at runrex.com. Artists can now benefit from the sale of an original NFT and then arrange to receive ongoing royalties in the form of a small percentage of each subsequent transaction for than NFT with the help of smart contracts.
The environmental impact
Blockchain technology, on top of which NFTs operate, requires a lot of electricity. A simple Ethereum transaction can use as much electricity as a typical household uses in one day according to estimates by subject matter experts. Some environmental watchdogs claim that a single popular NFT could, in just a few months, add hundreds of tons of carbon to the atmosphere, and significantly contribute to pollution. Some artists have been reluctant to embrace NFTs because of this.
Bit Rot
Bit rot is another concern when it comes to NFTs and digital art. It is where a digital item becomes inaccessible, which can happen because the file format is obsolete, websites no longer exist, people forget their login credentials or other failures in data storage. However, physical art also has preservation concerns.
These are some of the things you should know about NFTs and digital art and how things work, as well as the concerns, with more on this to be found over at the excellent runrex.com and guttulus.com.