A new kind of cryptocurrency has shaken the art world, and some artists have earned millions of dollars for their digital artworks. Non-Fungible Tokens, a digital certificate that’s made virtual images tradable, have created a new class of art collectors who own cryptocurrencies, primarily young and anonymous. This guide explores NFTs and explains why they have taken the art world by storm.

What are NFTs?

Non-fungible tokens (NFTs) are unique digital assets representing ownership of some special and usually exclusive property, such as a collectible item, a sound file, a GIF, or a work of art. NFTs hold bundles of information regarding a one-of-a-kind digital asset. The data is stored on a blockchain and acts as evident proof of ownership on the blockchain. As a result, anyone anywhere can trace the ownership of a digital asset at any given time.

The uniqueness of NFTs comes from the fact that unlike fiat currency or bitcoin (BTC) and other cryptocurrencies that are interchangeable because one Bitcoin is equal to any other Bitcoin existing anywhere else – fungibility. NFTs, on the other hand, are not exchangeable since each one is unique and not comparable to any other NFT anywhere else – that’s called non-fungibility. Every NFT is connected to a specific asset, meaning, for example, that an NFT related to an artwork of a horse cannot be equated to another connected to a song about a horse. Moreover, NFTs are inimitable, and their value cannot be duplicated.

NFTs to the Rescue

Unlike the former days when artists needed to access galleries to sell their artworks, today, numerous online NFT platforms like OpenSea, Rarible etc. exist where buyers and sellers congregate to conduct art transactions. Both sellers and buyers need cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), etc., to conduct business.

Artists who wish to sell their artworks as NFTs only need to sign-up in an NFT marketplace. After paying digital token fees, usually between $40 and $200 on average, they can display their creative works on the platforms where bidding can go on for months. The fees numbers are from CryptoRunner. Some tangible ways NFTs have become a game changer in the world of art include the following:

1.    Greater Control of their Creative Works

Tokenization through NFTs means besides selling physical copies; artists can still earn through the digital version of their work. By giving artists digital proof of ownership, NFTs have empowered artists to put their pieces on different platforms, where they can tie their works and even negotiate contracts for royalty payments. This is unlike the former days when artists only earned by selling physical copies of their works.

2.    Greater Financial Value

Previously, the monetary value of digital art was negligible as it was accessible to all and sundry. Since a product’s value increases when it’s scarce, NFT art promotes scarcity by ensuring only one owner has a particular digital product, creating rarity and greater value.

3.    Galleries Are Now Obsolete

Galleries and auction houses that were once the primary custodians of art became gatekeepers instrumental in sales. However, they were exclusive, with substantial access fees, and only some artists could get their work to the best galleries. Enter NFTs, and the world of art became democratized, meaning any artist with an internet connection can access an NFT platform, and now it’s the public that decides the worth of an art piece.

4.    Eliminate Art Dealers

Previously, there used to be a cloud of secrecy where “vetted” collectors would buy art pieces only to quickly resell them at higher prices, to the chagrin of artists. With NFT technology, artists sell their unique wares directly to buyers via NFT platforms instead of through art dealers. As a result, there’s no longer space for “vetting” collectors. NFTs are sold in open online galleries, and artists earn a royalty every time a piece is resold.

5.    Transformed Digital Art Ownership

Before the introduction of cryptocurrencies, there was no way anyone could claim ownership of any digital asset. Nonetheless, the entry of NFTs has enabled artists to claim and prove ownership of their work, meaning they have the authority to lease, use or showcase their creativity. As soon as a piece of artwork is linked to a blockchain, it acts as a deed of ownership, and since information held on blockchains is impossible to crack, there’s little room for scammers, are artists remain the authentic owners of their works.

NFTs and cryptocurrencies have brought a paradigm shift in online media and digital art ownership, and artists own what they put on online NFT platforms. As a result, artists create scarcity, and no one else can manipulate ownership due to the robust security of NFT technology.

6.    A Guaranteed Way to Make Money

NFTs have enabled artists to draw huge incomes since they can now easily monetize their artworks. Artists have increased their incomes since crypto technology ensures they no longer pay art dealers’ commission fees. Apart from selling, artists are entitled to 8-10% royalties from NFT platforms every time there’s a transaction of their art pieces in the future.

The Parting Shot

Through NFTs and cryptocurrency, blockchain technology has made the once-intangible world of art a new frontier where artists and collectors can enjoy the freedom they lacked over the years. Artists can now sell their works freely and receive compensation and recognition. The democratization of the art world has brought imagination that knows no bounds, enabling artists to create and enjoy wealth no longer has limits.

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