What does NFT stand for?
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable. So non-fungible tokens cannot be interchanged or easily replaced by another equal part, each token is unique, original and irreplaceable.
But what are NFTs?
Non-fungible tokens (NFTs) are unique, digital receipts which reside in blockchain. Once an NFT has been “minted” - it’s code is interwoven into the blockchain code. Examples of NFTs include collectables, game items, digital art, videos, and audio. NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them.
How do NFTs work?
Most NFTs are part of the Ethereum blockchain, which can be currently bought with the cryptocurrency Ethereum. This is similar to other forms of cryptocurrency like bitcoin or dogecoin but its blockchain supports NFTs and stores extra information.
How does ownership work?
You can copy a digital file as many times as you want, including the art that’s included with an NFT. But NFTs are designed to offer you ownership of the work; something that can’t be copied. For example, anyone can own a print of Van Gogh’s ‘Starry Night’ but only one person can own the original painting.
NFT ownership is recorded on the blockchain, and that entry acts as a digital certificate of authentication, so owners of an NFT can easily prove they own it, and can resell it and in some cases earn the original creator royalties.
Image credit: .Art
Why own an NFT?
Generally for the same reason as owning a physical piece of art, perhaps you have had an emotional response to the art, or you want to own something that the artist has created. The other reason is you think it might be of value and may increase in value!
NFT artworks by an artist whose work is no longer found on the common marketplace might also offer a unique opportunity for collectors to invest in these digital pieces.
How do you buy an NFT?
First, you'll need to have a cryptocurrency supported wallet and purchase some ethereum (ETH) to the value of the art you want to buy. ETH can be purchased through several reputable providers including Coinbase and Binance.
Once you have purchased EHT, you'll need to use a digital wallet to purchase on the NFT platform you are using to shop for NFTs. If you're on a desktop computer, you'll need to install a wallet extension for your browser, such as MetaMask. You'll also need to fund your account with Ether to purchase the art. You can digitally send ETH from one provider to another almost instantly.
More details on this setup process can be found here.
Image credit: Beeple, Everydays: The First 5000 Days
Is this the next chapter of Art History?
Artist Beeple sold an NFT for $69 million through Christie’s auction house. ‘Everydays: The First 5000 Days’, is a digital collage of Mike Winkelmann’s (Beeple) work created and published online every day. The sale through Christie’s represents a critical moment for digital artists and NFTs, legitimising their value and saleability in the art market. This record sale has placed Beeple, digital artists and NFTs firmly on art collector's radar.
Another key moment that has created a buzz around NFTs, involved artist Banksy, whose original print ‘Morons’ was bought by a New York Gallery (Injective Protocol) for $100,000. They proceeded to burn the original, in homage to Banksy’s similar shredding of his work ‘Girl with Balloon’, creating a digital 1/1 NFT of the print, which was auctioned on OpenSea auction platform for about $400,000 (230 units of cryptocurrency).
This new NFT craze in the worlds of art and tech are seeing more established artists transfer works into Blockchain. Justin Sun, founder of TRON and BitTorrent CEO, officially announced the establishment of the JUST NFT Fund whose mission is to transfer the world's top artworks to the blockchain; "JUST NFT will build a bridge between blockchain and the world's top artists, supporting the growth of native NFT artists in the world of crypto."
It’s undeniable that the way we buy and collect art is changing and digital art will likely play a key role in the future, as cryptocurrencies continue to change the way commerce and transaction works. Both artists, collectors and auction houses are taking notice of what the cyber world can offer the art market, and the gap between the ownership of physical objects and NFTs is growing ever smaller.
Stay tuned for an exciting upcoming project involving NFTs!