How Artists Are Using Blockchain To Monetize Their Work (NFT Basics)
Non-Fungible Tokens (NFTs) are not necessarily a new development in the crypto space, but in recent months they have gone mainstream and helped a large number of artists monetize their work. Some artists, like the top-selling Beeple, have achieved financial independence through this medium after years of producing artwork for their fans for free on a regular basis, while others are using NFTs as a gateway into the world of cryptocurrencies.
An NFT is a digital representation of a scarce good, in the same way, that a cryptocurrency is a representation of a scarce good. However, cryptocurrencies are fungible, which means that in the case of bitcoin, for example, one bitcoin or satoshi is identical to all of the other bitcoins or satoshis in the circulating supply. NFTs are not fungible, which means that each unit is unique in price and content. The first major use-case of NFTs was a project called “Crypto Kitties,” which launched on Ethereum in 2017, and allowed users to collect unique NFT cat animations. The project became so successful that its creator Dapper Labs went on to build their own blockchain, Flow, which is currently helping to mainstream NFTs with their “NBA Top Shots” collection.
What Flow is doing with Top Shots makes it very easy for the average person to understand the value in NFTs, because they are essentially a digitized version of trading cards, which many people are already very familiar with. Major sporting league trading cards are deeply ingrained in American culture and people understand that original limited edition cards have value. With physical trading cards, sometimes they can be counterfeit, and it is often difficult to get them appraised and find out if they are legit. When it comes to NFTs on a blockchain, there is no question who owns the original item. Of course, anyone can view an NFT or take a screenshot and keep the image forever, but people can also take photos of the Mona Lisa or download the image from Google, but that doesn’t mean that they own the original, this same principle applies with NFTs.
In some cases, the owner may want to remain anonymous, and they do have that ability, but trading cards, artwork, and NFTs are often purchased as conversation starters or status symbols. For many collectors who are dabbling in the world of NFTs, being able to show off their collections and browse the collections of others is the best part of the experience.
Art has become one of the largest use cases for NFTs, with big-name celebrities and small-budget creatives crowding into the space in search of new opportunities. The massive hype has many longtime crypto users concerned that an NFT bubble is building, harkening back to the ICO craze of 2017. These concerns partially stem from 6 figure digital art purchases and the awkward attention from mainstream celebrities. However, there are some major differences between the ICO craze and the current NFT boom. It is important to note that some of today’s top blockchain projects, especially in the growing Decentralized Finance (DeFi) ecosystem, actually began as ICOs. While there were many ICOs that failed (to create a profit for token holders) there are many ICOs that were very successful. No doubt there are many NFTs being created that will not gain or retain value, there are also plenty of content creators that are producing beautiful and interesting NFTs that are very desirable to collectors.
Spending exorbitant amounts of money on trading cards, limited edition comic books and famous works of art is also nothing new, and it is very possible that NFTs simply represent the newest technological iteration of this longheld tradition.
If you want to get started with minting or trading NFTs, you are going to need to familiarize yourself with a Metamask wallet, which allows you to connect to Web3 applications like NFT marketplaces and decentralized exchanges. However, if you aren’t ready to get in that deep, you can just browse some of the top NFT auction sites to see what people are collecting and trading. Some of the artwork is extremely impressive, while other popular collections like the “crypto punks” seem rudimentary and very easy to make despite their high price tags, but many people would say the same thing about much of the modern art that is hanging in museums.
Some of the top NFT sites can be found below:
(Fees may be a bit high on some networks due to congestion if you want to mint or buy an NFT, but developers are working to upgrade their systems to meet the demands from new users)