Are NFTs the future of art? This guide tries to analyze and foresee the future of arts. Will NFT marketplaces replace the art galleries completely in the coming years?
Let us dabble into the topic “Are NFTs the future of art” by analyzing the good and the bad parts.
But before that, if you are new to the concept of fungible and non-fungible assets, NFTs and NFT marketplaces, here is a refresher for you. Please skip the following sections and jump to the section on NFTs for digital arts, if you are already aware of the basic concepts.
Table of Contents
What are fungible and non-fungible assets?
A fungible asset is a type of asset which can be replaced or exchanged by a similar asset without worrying for any loss or gain. For example, you will not have any issues if, for your $100, I give you ten $10 notes or another $100 note or two $50 notes. Similarly, you will not have any concerns if for your $1000 worth of Bitcoin, I give you with the same amount of Bitcoin.
Money and cryptocurrencies are examples of fungible assets.
However, think of an art piece. It is unique in nature. An art piece cannot be replaced or exchanged easily with any other art piece in the world, without worrying for any loss (or profit).
Another example is of a house. A house is unique in nature. A house at a particular address is unique. It is only one of its kind in the entire world. It is not easy to calculate its value at a given time.
Think of a video file or a music piece. These are also unique in nature and cannot be exchanged easily with another music piece or a video file. But wait! You might say that you can download multiple copies of a music piece or a video from the internet. But understand. There is only one original copy of the music piece or a video. The flex of owing the original piece is what some people enjoy.
These assets like a house, art piece, music, video is known as non-fungible assets. They are unique in nature and it is only one in the entire world.
What are Non-Fungible Tokens (NFTs)?
A Non-Fungible Token (NFT), as the name suggests, is a token stored in a blockchain platform, which represents a non-fungible asset. For example, an NFT or a token saved in a blockchain like Ethereum, may represent a non-fungible asset like a digital art or a music piece.
If you have this NFT or token store in your crypto wallet, then it establishes the fact that you own the digital art or the music piece.
Since an NFT is stored in a blockchain platform, it cannot be tampered for records. It means, if an NFT for a digital art mentions that the digital art is owned by Mr. X, then Mr. X will be least worried for any tampering of the ownership data.
Few facts about NFTs.
- NFTs are maintained or developed in a blockchain platform like Ethereum, Cardano, Binance Smart Chain, Polygon, etc. Read this.
- Each token (NFT) has an owner which is easily verifiable.
- NFTs can be bought and sold on NFT marketplaces.
- NFTs are tokenization of assets (unique or non-fungible). The person who has the NFT assigned to him/her owns the asset. This record is practically impossible to change. Hence, NFTs are one of the most secure ways of record management of ownerships of unique assets. It might happen soon that you will be proving ownership of your house by an NFT.
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Let us now jump to the question “Are NFTs the future of art”?
Are NFTs the future of Art?
To answer “Are NFTs the future of Art”, let us first analyze the good things and bad things, NFTs bring to the art and the artists.
Good things about NFTs
Bringing artists to the mainstream
NFTs have brought the artists to the mainstream. Earlier the art industry was ruled by Art Galleries. Artists struggled all their life to get noticed by these Art Galleries. Even after that, they were bound to pay hefty commissions (even 50%) to these galleries to exhibit and sell their work.
The advent of NFTs has created a paradigm shift. Now rather than pleasing an Art Gallery, an artist can simply mint an NFT for his/her artwork, in an NFT marketplace like OpenSea and Rarible. He can set a price for this NFT linked to his artwork and even opt for royalties. If the artwork gets popular, every time the artwork changes hands, a royalty is paid to the artist.
Giving uniqueness to Digital Arts
How to establish uniqueness of a digital art. People can easily download multiple copies of a digital art. The digital art below is known as Everydays: The First 5000 Days. It was created by the digital artist Beeple. It was sold at a whopping $69 million. But you can argue that if we type “Everydays: The First 5000 Days” in Google Images, we will have the option to copy the image free of cost as many times as we want to.
How come this art from Beeple (and yet there are other similar examples in the list) got sold for a staggering $69 million. The answer is NFTs. Beeple minted or created an NFT for this digital art. This NFT was hence linked to the original digital art. The person who bought this for $69 million, paid this staggering amount to buy the original digital art.
Hence, digital artists can now easily mint NFTs for their digital arts which can be exhibited in an NFT marketplace. These NFTs assure that the digital art linked to them is the original one. Also, ownership is easily established by an NFT. This record of ownership is practically impossible to tamper. Even the NFTs can be transferred easily by using a crypto wallet.
Plethora of opportunities in the Metaverse
NFTs offer a plethora of opportunities for digital artists in the Metaverse space.
There are a hell lot of Metaverses being launched everyday which needs digital artists to create Avatars, game collectibles, virtual spaces for which NFTs are minted and traded.
Easy to support your favorite artists
With NFTs it is now easier for art lovers to financially support their favorite artists. One can simply buy the NFT for an artwork in an NFT marketplace. The NFT easily which is stored in a blockchain, easily establishes the ownership rights for the buyer. This record is practically impossible to be tampered.
Simply putting, it gives the flex to own the original artwork and boast it to the community.
Now let us examine some of the challenges foreseen in the topic of “Are NFTs the future of art”?
Challenges for NFT going mainstream
It depends on the community which promotes these NFTs
What do we want to say here?
Let us see some of the popular digital arts which were sold in millions of dollars.
Merge by Pak sold for $91.8 million
There are other popular digital arts too in this list. Please read this article, if you want to know these popular digital artworks.
But wait. Can’t I right click on these digital arts and save a copy of it? What is the need to buy these digital artworks for millions of dollars?
We can buy and own a copy of the digital art, but we cannot own the original piece of the art. The original piece can be owned only by buying its NFT. It gives people the flex to own the original. Think of owning the original Mona Lisa painting. We can have a copy of the painting in our houses, but the original is only one in this entire world.
However, do you think, I will pay a penny to own these arts? No. Definitely not. My wife will kill me! Will a common man think of buying an NFT of a digital artwork by paying millions? The answer again will be a ‘No’ for most of us.
Then, who is buying these NFTs? There are communities. These are mostly the rich who buy these NFTs for the below motives mainly:
- Supporting their favorite artists financially
- Bragging for owning original pieces of artwork or building status in society and social media platforms
- Speculating the prices of NFTs, buying and then reselling them at even higher prices
The NFTs are not as mainstream as iPhones or Electric vehicles are. The community is still evolving with more and more people understanding the nitty-gritty of the game and thereafter participating in it. There are few young talents also like Fewocious who have made it large in the NFT space. But still the adoption is at its nascent stage and the future of NFTs in digital art will largely depend on these communities and the new ones to be added.
Until now (at the time of writing this article), majority of the NFTs are minted or created in the Ethereum blockchain. They are created or minted in the manner cryptocurrencies are minted. At the backend where miners mint these NFTs and cryptocurrencies to be stored in a blockchain, high tech computers with large processing powers are employed. These computers have a bad effect on the environment.
Many NFT players backed off when they came to know that environment is impacted badly in the creation of NFTs.
However now experts are working on NFT creations that do not impact the climate.
The costs related with NFT creation on popular NFT marketplaces like OpenSea or Rarible are high.
At the current scenario, there are few popular NFT marketplaces like OpenSea, Rarible, Nifty gateway, on which you hold a chance to get your NFTs sold. NFT creation and selling is not that rosy as it is depicted on the social media. These NFT Marketplaces have costs associated for NFT creation. This can cost up to $1000 without any guarantees for a buyer.
If you ask me, “Are NFTs the future of arts”, the answer is “Yes”, provided the current challenges in the system are eradicated. Be it the environmental impact, educating people and artists for mainstream adoption, costs related to NFT minting, and the technology. Any technology in its nascent stages has gaps that it needs to fulfil, for it to become mainstream. NFTs for digital arts are also at their initial phase. However at this stage also the level of mental and financial investments poured into this space is remarkable.