NFTs Explained in 5 Minutes
NFTs became the talk of the art town when Christie’s sold the first purely digital artwork ever offered at the British auction house, Beeple's “Everydays: The First 5000 Days” for $69 million earlier this year. The sale positioned Beeple among the top three most valuable living artists, and suddenly, NFT and blockchain became predominant terms in the art world. But what exactly is an NFT, you may be wondering? How is it linked to the art world? And why is this term all of a sudden so popular? Well Fixers, here’s what you need to know:
What is an NFT?
Let’s start with the basics; NFT stands for non-fungible token, which means just as much as it is unique and therefore no copy can be made. An NFT is a digital certificate of authenticity for an object (real or virtual) that cannot be interchanged.
An NFT is basically like a Pokémon card. There are all kinds of Pokémon cards, but Squirtle’s is not the same as Snorlax’s.
NFTs can be used to represent digital assets like artworks, collectibles, videos, and many other items, by “tokenizing” them and creating a digital certificate of ownership that can be bought and sold. When it comes to a digital artwork like “Everydays: The First 5000 Days”, this token contains all the information related to the authenticity of the work: name, artist, size, characteristics, number of prints, and has a unique identifying code.
But what exactly is the purpose of an NFT?
In a nutshell, its aim is to denote the value of the asset attached to it, while also protecting its unique, individual authenticity. Since NFTs are stored on the blockchain, a digital ledger that records all transactions, any changes in ownership are verified and logged by a public worldwide network. This means that the “chain of ownership” is marked on the file permanently, making it impossible to swap the original object for a forgery, as you’re always in the know of who’s the current owner of the original. What’s so groundbreaking about NFTs is that they provide the opportunity to actually “own” something in the digital world where files can be endlessly duplicated.
How are NFTs shaking up the art world?
Now, let’s dive into the relationship between NFTs and digital art. Despite the recent NFT craze, digital art has been around for a while and had been long undervalued, at least until Beeple started to shake things up. This was partly because it was impossible to distinguish an original from a copy, which is where NFTs come into play. Other than making it possible to know and track every single owner of a digital art piece at all times, NFTs also add the crucial element of scarcity to an artwork. Every time the NFT is sold or changes hands, the artist is paid a percentage of the sale.
On top of that, with the rise of NFTs, art collecting has been able to move online, creating opportunities for many artists, on a global scale, to sell their works. Think about it, Fixers; previously, art collecting had generally taken place in physical spaces, like exhibitions and art fairs, and concerned physical artworks. But in the digital world, the possibilities are endless.
Artists delving into NFTs
Apart from Beeple, there are many artists across different disciplines experimenting with NFTs. Legendary artist Damien Hirst, who has been featured in many of our Art Fix episodes, recently launched “The Currency” project consisting of 10,000 hand-painted works on paper. Each painting corresponds to an NFT that contains a high resolution image of the front and back of the work.
These “hybrid painting-NFTs” were available to buyers at the low price of $2,000 (a turnover of $20,000,000!).
But there’s a catch. Buyers have one year to decide if they want to keep the NFT, in which case the actual physical work will be burnt, or they can choose to keep the physical work and give up their rights to the blockchain-based artwork. Which one would you go for, Fixers?
On the occasion of the 20th anniversary of the iconic Fat Cars, Erwin Wurm, the artist from our episode on Humor in Art, dropped his first NFT last August as an open edition that was exclusively available for 24 hours. The final edition size was 461. The NFT titled “Breathe In, Breathe Out” brings his Fat Sculptures via an animated version of a breathing Porsche to life.
Another artist that has jumped on the NFT train is Art Fix fave JR, who created a new installation for the Great Pyramid of Giza. The work is part of an exhibition titled “Forever Is Now”, which is the first of its kind to hit the site in over 4,500 years.
Installed along a trail leading up to the world’s ancient wonder, you’ll find JR’s large-scale illusory artwork depicting a giant hand holding a postcard that, when viewed from the right angle, falls right in the middle of the pyramid and shows the top section hovering, separated from its base.
For this work, the artist decided to cut the image file that creates the installation into 4,591 pieces (the approximate age of the pyramid) and for each of them to become one NFT work. While each piece seems to contain only black and white dots, when all of them are assembled together they make the artwork as a whole. The digital collection is called “Greetings from Giza”, and it is the artist’s first NFT drop. You can apply for the chance to own one of these little digital pieces of JR’s take on the world’s wonder here!
Steps to buy an NFT
- Finding an artwork: There are various online marketplaces where you can buy NFT artworks, such as OpenSea, KnownOrigin and MakersPlace. Think of these as online galleries where you can create an account to browse and buy digital art.
- Creating a digital wallet: Before you can actually buy your selected work, you need to add money to a digital wallet and connect it to your OpenSea account, for example. To do so, you’ll first need to download a wallet app, such as Coinbase Wallet and MetaMask.
- Buying crypto: The next step is to buy cryptocurrencies. OpenSea uses ether (ETH), which you can buy using Coinbase, Robinhood, amongst many other apps.
- Transfering crypto to your wallet: Once you purchase your cryptocurrency, you’ll either see it available in your digital wallet, provided you use the same platform, or you’ll have to transfer it.
- Buying NFT art: You’re ready to buy your NFT artwork once you have crypto funds in your digital wallet. In some cases, you can purchase a work for a set price by clicking “Buy Now”, and in other cases you’ll have to offer bids on your selected pieces.
NFTs beyond the world of art
NFTs are revolutionizing the world in more ways than just in art. From entertainment and sports advertising to luxury and virtual real estate, all sorts of businesses are coming up with ways to benefit from NFTs to make sure they remain ahead of the curve. For example, artist The Weeknd, has launched an NFT of an as-of-yet unreleased track. Luckily for us, the art industry seems to be at the forefront.