What is NFT artwork & how it shapes WEB 3?

The world of digital art is changing rapidly. Remember when people admired Mona Lisa or Black Square? Now they have been replaced by cartoon pictures of cats, robots, and aliens. Do you know what we’re talking about? NFTs, of course.

NFTs became popular last year, but the first steps towards their creation were taken back in 2011. One of the first NFT projects can be considered ASCII Len / ASCII Bernanke. Not many people know about it, so mentions can be found on specialized crypto sites. Let’s understand what non-fungible token means for digital artists and others. If you want to learn even more about NFTs – check out this ultimate guide to them by our CEO, Mykhailo Sitalo!

What is the technology behind NFT artworks?

Let’s start with the basic concepts. NFTs, or non-fungible tokens, are digital data stored on a blockchain. Not too clear, is it? To simplify, a non-fungible token is one whose monetary equivalent does not equal its value. A simple example would be the book Lord of the Rings, which has a price of $50. The same book, but autographed by Tolkien, would cost $300. The same principle applies to this type of digital art, which has become popular. We can conclude that this is the difference between NFTs and cryptocurrencies with fiat money. The second and third are interchangeable, but such tokens are not.

As we said, NFTs are stored on a blockchain. Everyone who is even slightly connected with the crypto sphere knows about blockchain. It can be defined as a decentralized digital ledger that tracks transactions. It is on the blockchain used to support cryptocurrencies like Ethereum. 

The controversy surrounding the NFT marketplace is still going on. Technically, NFTs are just a unit of data in a blockchain. Many skeptics believe that paying huge sums of money for digital art that cannot even be touched is great folly. Fans, on the other hand, are convinced that NFT art is the engine of progress. After all, it’s something completely new. It’s up to you to decide who is right. One thing we can say for sure: NFTs are tokens that are more and more talked about all over the world.

What do NFTs mean for creators?

When we talk about physical art, everything is clear. An artist can paint a picture, sell it, or transfer the copyright. When it comes to digital art, in particular blockchain data, things are a bit more complicated. Let’s break down what value such tokens have for their creators.

• A digital artist can gain ownership. Before the advent of cryptocurrencies like Bitcoin or Etherium, people did not have the ability to be full owners of digital things. Yes, users could publish and share digital arts with each other, but they had no rights to them. However, the NFT marketplace has changed things dramatically. Now after the creation of NFTs, tokens are being minted on the blockchain. This means that all paths will lead to the artist, which means that he will be able to verify his authorship. There is one nuance, though. Although minting tokens allows you to get copyright, this path has never been tried in court.
• New income opportunities. The fact is that thanks to the NFT marketplace, designers can now monetize their work. It also removes from them the difficulty of communicating with clients. Now you can just create NFT art and not change it because that’s what the client wants.
• Globalization. Until NFTs artworks existed, artists had to draw pictures and then find galleries to send them to for exhibition. Selling was also difficult because art connoisseurs rarely paid attention to new names. It’s different now. Digital tokens make it possible to move to the Internet, which means a larger audience. What’s more, now anyone with a PC can make their own artworks. And it doesn’t depend on what kind of non-fungible token you get. Note that the pixel video Nyan Cat is worth almost $600,000! There are many galleries where you can see examples of digital art: Voxels, Async, KnownOrigin, Sotheby’s, and many others.

As a separate point, we would like to highlight the large ecological footprint that the NFT market and cryptocurrencies in general bring. As an example, we can cite the story of the French artist Joanie Lemercier. He managed to sell his non-fungible token in just 10 seconds, and of course, he earned more than a thousand dollars. Sounds exciting, doesn’t it? We agree, except that there is one caveat. It turns out that the transaction to buy this artwork would be more energy-intensive than his art and design studio’s energy consumption for a whole two years!

Well, although transactions with such tokens are energy-intensive, we can’t help but note that energy is also needed for mining digital currencies, for example. The more powerful a computer is, the more electricity it consumes. Now green energy is developing, but as long as users continue to mine tokens, high energy costs will be unavoidable not only for them but also for those who create NFTs.

How do artists price NFTs?

It is not enough to create an NFT. It has to be priced correctly as well, otherwise, there is a risk of not reaching the maximum ceiling or, conversely, not finding clients. When an artist or designer gets into the NFT space they are often faced with a problem regarding token valuation. Of course, it all depends on their internal perception, but most follow trends. In addition, it is worth remembering that the price of NFTs will rise and fall depending on the Etherium because they are sold exactly on its basis.

In order to understand how much a work is worth, an artist can look at similar digital art objects at:

• app.foundation;
• rarible;
• opensea.

And these are just a few examples! Look for the right sites and you can get the best price.

In order to increase the audience and raise their interest, the creators conduct NFT drops. You need to perform some simple actions (for example, subscribe to the social network profile or make a repost), and then you have a chance to get NFTs for free. By the way, many blockchain projects hold drops as well. Detailed information about the sites where this happens can be found on the Internet.

Does the NFT art industry have longevity?

We can’t say that with a hundred percent certainty. Yes, the NFT stands still at the top of the list for many investors, but in April 2022 prices collapsed sharply by as much as 70%. However, there is no need to get upset. NFT collections are still trending, and we doubt they will hit bottom anytime soon.  Pessimists predict that interest will fade over time. The optimists, on the contrary, claim that the artistic meta-universe will reach a new level, and the development will be even faster than before.