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In the spring of 2021, the Internet was gripped by a fever of trading in digital NFT art, which has not subsided to this day. Tokenized paintings by famous artists sell for millions of dollars. New records for the cost of lots are set every month. Many users ignorant of the blockchain are becoming interested in this market. How to sell NFT digital art and how to buy? Are such investments reliable or is NFT another “bubble” that will inevitably burst? We have tried to collect all the important information and give brief answers to these questions in the article.
How and why digital technologies are used in art
NFTs are non-fungible tokens, part of blockchain technology. The peculiarity of NFT is that, due to the built-in smart contracts, linking them to a virtual object makes it unique. So a digital picture or song, which, in fact, can be copied an infinite number of times, has a confirmed “original”. At the same time, the owner of the token, as it were, receives a certificate of ownership of the digital art object. Similar properties are useful in different situations.
People have always strived to have single copies of anything. The original Manet, Picasso or a rare collectible card with the image of an athlete is an indicator of the status and wealth of the owner. In the 21st century, all this applies to works of digital art. The most expensive artifacts are traded in the famous auction houses Christie`s and Sotheby`s along with the classic "physical" lots.
For many, NFT has become another way to invest accumulated funds. Since non-fungible tokens are inextricably linked with cryptocurrencies, the rate of which is steadily growing, “investing in pixels” looks promising. But there is also an opinion that sooner or later the market will decline. How it will actually be - only time will tell.
- Introduction to games.
NFTs have taken root in the gaming industry. Pet games have become very popular. Virtual cats, ducks or Axies (Pokémon-like characters from the popular Axie Infinity project) sell for hundreds of thousands of dollars. In some games, users buy tokenized swords, armor, or other important items with cryptocurrency. And in card collectibles like Hardstone NFT, game cards become directly.
Where NFTs are sold
You can buy or sell tokens on special exchanges - NFT marketplaces. Consider the most famous of them.
The largest site at the moment. It exhibits both the work of famous authors and newcomers. In the “Open Sea” you can buy digital art on the blockchain from popular expensive collections - CryptoPunks and Bored Ape Yacht Club.
An exchange that positions itself as a place to sell only exclusive high quality NFTs. Before publication, all works are selected. It will be difficult for a beginner to break through. Nifty sells art from Beeple, Trevor Jones, and other high-value crypto artists. Another feature of the site is that transactions here can be made immediately in dollars, and not in cryptocurrency.
On this marketplace, published works are also pre-selected. Trading takes place in the Ethereum cryptocurrency.
A platform created by Russian developers. Anyone can post their work here.
Designed mainly for trading gaming NFTs, but crypto art is also represented on the exchange.
Suitable for beginner authors. The platform runs on the Hive blockchain and does not charge artists for selling their work. But its minus follows from the general availability of the exchange - the cost of works here is low.
How to sell a digital painting for NFT tokens
Now on most platforms, minting of tokens takes just a few steps.
- Connecting a wallet.
The easiest and most common way is the MetaMask multi-currency crypto wallet. It is a browser extension and mobile app. There are also physical media for storing cryptocurrencies that work like a flash drive - for example, Ledger.
Before creating a wallet, you need to study the conditions of the platform with which you plan to work. It is especially important to know what currency is traded in and what is the average fee for issuing a token.
- Upload files.
Following the instructions of the exchange, create your collection (similar to a folder on your computer) and upload files to it. Fill in all required fields - name, type of sale (fixed price or auction), initial price.
- Launching a sale.
After adding files to the system, you need to generate a token and put it up for auction. The NFT rally occurs automatically after pressing the appropriate button and paying the commission. Thus, creating NFT artifacts does not require programming skills from the user and is available to everyone. You just need to replenish the wallet with the amount charged by the exchange for minting. But, if you are an aspiring artist with no name, you should not expect quick sales for huge sums. On NFT marketplaces, the works of famous authors are in demand. Before entering the market, you need to “light up”, gain an audience, get into the field of view of influencers.
How much are the most expensive tokens
This is how the TOP 3 most expensive works of art on the blockchain in February 2022 look like.
- The Merge - $91.8 million
Strictly speaking, the picture “Merger” by arter under the nickname Pak was sold not as one token, but as many small NFTs - “masses”. After the auction held in November 2021, the painting is jointly owned by 28,983 users.
- “Everydays: The First 5000 Days” - $69.3M
Digital artist Beeple (Mike Winkelman) sold his work in March 2021 for a then-record $69 million. “Everydays…” is a collage of the works of the author, created by him for 13 years.
- Human One - $28.9 million
Third place also belongs to Winckelmann. “Man One” is a dynamic NFT placed in a physical shell - a cube of four video screens. The details of the picture - the astronaut and the landscape surrounding him - change periodically.
Game objects are still being sold for more modest amounts. The record belongs to a digital kitten from the CryptoKitties project, bought for $270,000.
Why NFT became so popular
It is difficult to answer this question unambiguously. But experts - psychologists, art critics, financiers - highlight several aspects of the NFT hype.
- Prestige and exclusivity.
Putting an expensive cryptopunk or “bored monkey” on your avatar means for many people the same thing as putting on a fashionable suit from the latest collection of a famous designer. Purchasing a token is a way to stand out from the crowd, show yourself as a progressive person and a “pioneer”.
NFT technology appeared relatively recently - in 2017, and became widely known only by 2020. People are usually attracted by everything new and unknown. Someone believes that tokens will eventually become something more than just digital pictures. But for some, NFTs are valuable in themselves, as a symbol of progress.
- Modern philosophy.
The development of digital art reflects modern metamodernist views. Many artists are ironic over themselves and over the whole situation. So, the picture of the author of Xcopy, which is one of the ten most expensive crypto works, is called “Right-click and Save As guy” (“Right-click and Save As…”). This is a comment on the fact that a work uniqueized with a token remains available for copying by everyone. The painting by the famous artist Banksy “Morons” (“Idiots”) directly says the statement - “I can’t believe you really buy this nonsense.”
Often, NFT artifacts are bought by users who stood at the origins of the cryptocurrency market and accumulated impressive amounts of Etherium or Bitcoins over the years of mining. Digital art - the possibility of using the accumulated funds.
Wealthy people have bought art in the past to support artists and give them more creative outlets. With the advent of the NFT, it has become easier for patrons to sponsor digital artists. Knowing how to sell your drawing for an NFT token, a promising and talented crypto artist will not be left without a livelihood.
What's next for NFT art
Now NFT is gradually trying to “get out of the plane” of ordinary jpg or gif images. Works with dynamic content and physical attributes are emerging. The tokens become part of the performance. It looks quite real to be able to admire the original digital painting on the wall of your house with the help of virtual glasses or similar gadgets.
Many people are concerned about the problem of free copying of tokenized works. Some artists publicly exhibit only a reduced quality version of their work. The buyer gets the original in high resolution. Perhaps new technologies will solve the issue of copyright in a different way.
Some experts believe that big brands will soon pay attention to NFTs. There are already successful cases. The Taco Bell restaurant chain sold 20 tokenized pictures in March 2021 to draw attention to a new dish on the menu. All profits were sent to a charitable foundation.
Where else are NFTs used
Tokens are gradually being introduced into various areas of human life that are not related to IT. Recently, for the first time, NFT was sold along with real estate, as an addition to the certificate of ownership of the property. But in the near future, tokens are unlikely to replace real legal documents. In medicine and insurance, NFTs are used to protect the personal data of patients and customers.
Non-fungible tokens are also used in logistics. With the help of smart contracts, the origin and movement of expensive exclusive goods - clothes, cosmetics, products are tracked.
Digital art on the blockchain and the NFT market is a new and unstable phenomenon. But that's what's interesting. It is possible that he will face a recession and the fate of the “dot-coms” of the 2000s. Either tokens will become a familiar reality, like the Internet or mobile communications. It seems to us that the second scenario is more likely.