What is NFT art?

A non-fungible token or NFT is a digital collectible. NFT is a proof of ownership of something in a digital format (similar to a certificate of authenticity for a work of art). Unique NFT is recorded on blockchain as a smart contract, mainly the Ethereum. When it’s put on the blockchain, it’s price history and provenance become authenticated. Unlike in traditional art market, the record is transparent of all transfers, pricing and sales on blockchain. NFT’s could be digital files of original paintings, songs, documents or mainly digital art and animated art. Each non-fungible token is unique. Just like a unique painting can’t be exchanged with its reproductions, the NFTs are also non-fungible. They also give legal rights to the owner of the specific NFT. They are stored in a digital wallet.

So those who buy a specific NFT become the owners of it until they resell it ( which gets recorded on the blockchain insuring transparency of price and ownership). Once the sale goes through, the artist gets royalties from each new transaction. Main beneficiaries of re-sales are digital and animation artists. Traditional artists can also mint NFT’s of their art. My art as NFTs is available here: https://opensea.io/collection/veronicawinters

It’s obvious that when NFT art sells for millions it becomes a new form of investment. Just like buying Picasso to hold and resell it at a later date, some buy NFTs for millions. Hence we arrive at crazy pricing for one-f-a-kind digital products.

2021 is a year of explosive growth

While NFTs have existed for several years, the 2021 became the year of explosive growth. At the end of 2017, the first NFT – a digital cat from Genesis sold for $117,000. The game allows players to collect and breed unique digital cats on the blockchain (https://www.scmp.com/tech/big-tech/article/3156004/cryptokitties-beeples-crossroads-and-clips-lebron-james-dunking-nfts).

In March 2021, The auction house Christie’s sold a digital artwork called “Everydays: The First 5000 Days” by digital artist Beeple. It sold for$69,346,250. NFTs craze spilled over the art events during Art Basel Miami week in 2021.

According to Art News, the craze started when Christie’s sold a Beeple work worth $69 million. Sotheby’s reported a $100 million in NFT sales, helped by the the launch of its NFT marketplace, Sotheby’s Metaverse. Nearly 80 percent of the people who bought and bid there had never done so before at the house. (Overall, 39 percent of buyers and 44 percent of bidders who transacted at Sotheby’s in 2021 were newcomers.) Art News, https://www.artnews.com/art-news/market/sothebys-2021-sales-record-1234613533/

Other examples of NFTs

NFTs as sports video clips collectibles:

A company Dapper Labs works with the NBA to convert top historic moments recorded as digital short videos to the NFTs. They sell those NFTs on the NBA Top Shot marketplace like trading cards.

NFTs as first document collectible:

CEO of Twitter, Jack Dorsey sold his first tweet as an NFT for $2.9 million. The computer programmer-Tim Berners-Lee created an NFT of the World Wide Web’s original source code, autographed it, and sold it through Sotheby’s auction house for $5.4 million.

NFTs as unique collectible characters:

There are 10k CryptoPunks collectibles created and resold on the Ethereum blockchain. They are 24×24 pixel art images, generated algorithmically. All of them have already been claimed for free and they’re getting sold and resold now. You can view and buy them here: https://www.larvalabs.com/cryptopunks

NFTs as art collectibles from oil paintings:

Serge Marshennikov is a well-known Russian realist artist who creates figurative art, painting seminude figures of young women. His NFT’s can be found here: https://opensea.io/assets/0x495f947276749ce646f68ac8c248420045cb7b5e/2321015729488442568237834758686003406737920752444130988804117818945702985828

NFTs as photography collectibles:

Numerous collections of photographs are available for sale as NFTs.

NFTs as music collectibles:

You can bid on to buy music and songs that can include a 24 bit Mastered WAV file and full song stems. It could also be a pack of audio-visual NFTs.

The Metaverse or virtual worlds

The crazy part about this blockchain technology is that art collectible NFTs is just the beginning. The virtual worlds are emerging. Decentraland is a metaverse where users buy NFTs representing land and property. People use MANA token to buy/ sell goods and services. Inside the Decentraland metaverse you’ll find games, art galleries, and other businesses. https://decentraland.org/

You can explore digital collections and buy tokens from various games, avatars and so on. Browse examples here:

https://opensea.io/collection/virtual-worlds

Famous characters & copyright

As far as I get this, if we purchase an NFT depicting Captain America, it doesn’t mean that we own the intellectual property of Captain America, just like we don’t own copyright on a purchased print of the hero. We own the print only. The copyright belongs to the original owner of this intellectual property and if he lists it as the NFT, then he would potentially sell his ownership to the buyer of this NFT.

Who are the buyers of the NFT’s?

It appears to be the craze among younger generation of investors and enthusiasts, who are very passionate about art collecting in a digital format. There is no moving of actual products, art, framing etc. But there is this innate desire to collect something, and NFT’s seem to fit the bill. Digital art seems to get the best traction in the NFT marketplace.

How to mint the NFT’s

• You can mint the NFT’s by registering at any big platform such as OpenSea, Foundation. It may cost you a fee to mint the NFT or the cost could be passed on to the buyer. Minting requires energy consumption, which is a big concern for the environmentalists but it doesn’t affect you directly when you register and open your own NFT collection.
• To create your NFT you must have an Ethereum wallet to connect it to the platform where you’ll host your account with the NFTs. Such wallets are Coinbase, MetaMask, WalletConnect, Dapper and so on. You can find a full list of accepted wallets on a platform you’d like to host your NFTs on. The hardest part is to connect the wallet to the platform. When you connect your digital wallet to OpenSea, you must pay gas fee (account registration fee) to synchronize the digital wallet with the platform (OpenSea). There is no limit on NFTs publishing with no recurring fees for artists.
• Lastly you click on “create” tab on OpenSea platform, upload the image, write the description and publish it. Don’t forget to click on the “list for sale” button to make it available for purchase on the marketplace. OpenSea pays 5% in royalties when your NFT gets resold.

How to purchase NFT’s

• Find a marketplace where NFTs are sold. OpenSea, Rarible (Rari token), Nifty Gateway (centralized platform where you can buy NFTs with your dollars)
• Connect the digital wallet that stores your passwords to bought NFTs. (Coinbase)
• Click on Marketplace to find your favorite NFT. You can “buy now” or “make an offer”. Once the offer is accepted or you buy it straight, you’ll see your purchase record under “collectibles” tab in coinbase wallet. You can also find your purchases on ‘my profile’ tab on OpenSea.

Beware of buying digital collectibles that have crazy number of editions. Just like prints, if it’s an edition of 10, 100 and 1000, its ok but if it’s an edition of 200,000, maybe it’s a good idea to pass. Also, check if the NFTs are sold by the artist and not someone else, posing as one.

Check out my collection. My art as NFTs is available here: https://opensea.io/collection/veronicawinters

Is it a bubble?

NFTs are not a fad. It’s a new asset class on the market. It’s great technology that utilizes blockchain tech. However, pricing bids on some NFTs confirm to the last stage of euphoric bull market, in my opinion. When euphoria kicks in, it ingulfs not only the stock market but also other markets. Even Melania Trump launched her own NFT platform. https://www.artnews.com/art-news/news/melania-trump-nft-platform-1234613890/ I think that the pricing bubble on some multi-million NFTs will burst someday and it maybe sooner than we think.