The truth about NFTs Part I

Welcome to my NFT blog series dealing with the trend of NFT art. This post will explain what triggered the NFT hype and give insights into how artists can be part of it. Part II will give insights into the benefits and downsides of NFTs. Part III will explore what NFTs will look like in the (near) future and what we can expect to happen next.

The truth about NFTs and what we artist can learn from it – Part I

In March this year, the artist Beeple (real name Mike Winkelmann) made history when the auction house Christie’s sold his digital collage titled ‘Everydays – The First 5000 Days’ for over $69 million. What really dazzled the world and evoke shock, controversy and intrigue in equal measure was that the painting in question was not a physical framed painting but the first purely digital Non-Fungible Token (NFT) based artwork offered by a major auction house. Initially, the identity of the buyer was hidden under the pseudonym Metakovan but quickly the world identified him as Vignesh Sundaresan, the chief financier behind Metapurse, a crypto-based fund that acquires NFTs and other virtual properties. Metakovan paid using Ether, the world’s second-biggest digital currency next to Bitcoin. The sale triggered a worldwide discussion if NFTs were the future of the art market and how they will redefine our understanding of art ownership.

For me who is working for a blockchain company and is an artist at the same time, this event set off a continuous questionary and/or advisory on NFTs from coworkers and friends. If I had sold a painting every time I received the question ‘Why haven’t you put your art as NFT?’, I could have quit my day job and be a full-time artist by now. Unfortunately, most people who asked me this question, have never viewed my art and were only seeing NFTs as an investment opportunity. So why did it bother me? Because my art practice is focused on 3D layering and physical textures. Different lighting and viewers position to the artwork will change the experience of the work. Flatten it to a jpeg and it loses more than 90 per cent of its appeal

But let's start from the beginning, what are NFTs and how do they work?

Image source: Money vector created by freepik - www.freepik.com

At its core, an NFT is simple a digital certificate or proof of ownership that is linked to a one-of-a-kind digital asset and is recorded on the blockchain. A blockchain is in simple terms a type of database often referred to as a digital ledger. What differentiates blockchain from other databases is the way data is structured and collected on it. On blockchains, the data is stored in blocks that are then chronologically chained together. Because of this, blockchain data can’t be altered and is immutable (This is a very high-level description of how blockchain works, learn more here). 

Blockchain records are controlled by so-called smart contracts. Smart contracts are transaction protocols (computer codes) that automatically execute under a set of conditions that users agree to. For example, the NFT platform Nifty Gateway uses smart contracts to establish royalties between 5 to 50 per cent for the artist on a secondary sale.  

And because NFTs are recorded on the blockchain (currently most likely on the open-sourced Ethereum), they are safe from counterfeiting, secure and immutable. NFTs can be attached to any piece of digital content, including photos, digital art, memes, tweets, videos or music.  

How do I turn my artwork into an NFT?

One of the most confusing parts of the NFT movement is its terminology. So let me clarify some things here. Many times you will hear or read ‘minting NFT’ or ‘tokenising art’ – both are in a nutshell just the terms for creating an NFT and link it to a digital asset. 

For that, you will need:  

  • digital file (be it jpeg, png, gif, video or other) that you want to sell 
  • a platform of your choice (e.g Nifty GatewayFoundationRaribleOpenSea.io etc.) 
  • a cryptocurrency wallet as most NFT transactions are paid with crypto coins (note: pay attention to which currency is supported by your NFT platform)
  • decide on how many NFTs you want to create for your selected artwork

At the moment, NFTs are often issued as part of a limited series similar to limited print series. This is referred to as ‘drops’. Drops can be the same artwork, variations of it or a series of different artworks. For example, Beeple’s ‘Everydays – The First 5000 Days’ is a collage of multiple artworks he created over 13 years. The NFT he sold for $69 million was only for this collage. In theory, he could sell each of these artworks as separate NFT again as a drop or even as several drops.  

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