What Are NFTs And How Do They Revolutionize Digital Art?

On 11th March a painting by Beeple – an American digital artist sold for $69 million at Christie’s.  

Since then NFTs is the new mystery term that everyone is interested in. a lot of you are confused as to how NFTs are created, how they work and how can someone earn from them? And where can you buy them?  

Today we will find out the answers.  

What is an NFT? 

NFT stands for Non Fungible Tokens. But what are they?  

In simplest terms, NFTs are unique digital assets. They are already present in a variety of industries like digital art, virtual real estate, collectables, gaming and more. Creators can mint any type of media and turn it into an NFT—digital art, cards, memes, GIFs, tweets, video clips, audio clips, written articles, and more.

After minting, buyers and sellers can trade these assets using cryptocurrency.

Difference between fungible and non-fungible  

Fungibility means interchangeable; any two items which can be exchanged are fungible. For instance, you have five $1 bills in your wallet, all of these five $1 bills have the exact same value and thus are the same.  

On the other hand, non-fungible means something unique and non replaceable with anything else. Like Pokemon cards. If you have a Bulbasaur card which you exchanged for a Charizard, the two cards don’t have the same value and are different from each other. They are not interchangeable because their value is not similar for all intent and purposes.  

It’s like the famous piece of art – Monalisa, there is only one original Monalisa. Many other copies have been made and printed but still, none of them can match the value of the original masterpiece. Just like this original tag, an NFT is a digital certification of authenticity representing one of its kind assets.  

But how do we distinguish between the original ones and the copies? 

Even if two items are identical, they are separated by the metadata on the non-fungible token.  

Still, confused? Let’s see how NFTs work? 

How are NFTs created? 

In the digital world, it all starts with content. Any piece of content, be it a photo, a video, written words, anything. It could be original, like something you make or something already posted online like the autographed first tweet of Jack Dorsey which is on sale as an NFT.  

Ethereum Blockchain  

After creating a content piece, creators “mint” it on the blockchain, turning it into an NFT. The Ethereum blockchain records the NFT’s equity and transaction history.

A blockchain is a record-keeping technology, an official ledger network of thousands of computers. For a better understanding of blockchain – check this detailed guide by Investopedia.  

After creating an NFT, the owner stores it in their digital wallet on the Ethereum blockchain. However, this doesn’t prevent others from downloading or replicating the NFT on the internet. It is just that the official records at the blockchain prove the authenticity of the original NFT. Just like we discussed before, the value of the original Monalisa can never be similar to any copy of it, no matter how exact.  

After creating the token on the blockchain, users access NFTs through a digital wallet. The owner can access this account with a seed phrase. The account address and contract of the NFTs live on Ethereum.  

Every NFT is unique 

Yes, and no.  

Technically every NFT has a token on the blockchain which makes it unique. Like there could only be one actual version of Leo nardo da Vinci or Van Gogh. But it could also be like a trading card, where there are many copies of a single artwork.  

Why would people buy NFTs?  

What makes avatars, skins, and other virtual merchandise in video games so appealing?

How do membership cards or credit cards add value to people’s lives?

Why are tickets to VIP access-only events in high demand?

What draws people to T-shirts featuring their favorite brand logos?

If you understand this, you know why people would want to buy NFTs. it’s the same. They want to be a part of a world they care about or want to brag about or discuss while having coffee. That is why people buy luxury cars, designer clothes, posters of famous people to stick on the wall.  

NFTs are going to add the value of the social currency to everything we do online.  

To sum up, the real value of NFTs is based on utility, access and social currency.  

Years down the line, you can expect to see a world where everyone has NFTs and digital wallets the same way we all have social media accounts right now.  

How does NFTs affect the artists of the digital world? 

Let’s go 30 years back when the internet first came into existence. Or in 2009 when Uber was launched. What was the major impact of these technologies? They take out the mediators connecting the consumer with the service provider directly.  

That is what NFT will do for artists. The artists of the digital world don’t have to suffer the losses which the big publishing houses and art galleries take up in profit.  

Consequently, artists will no longer settle for an initial payment while galleries make millions reselling their art after 11 years.

With NFTs, creators earn a percentage of the sale price as royalties every time their art or content sells on the blockchain.

NFTs are the revolution of the art world as the internet was for technology.  

Short Summary  

1. NFT are non-exchangeable tokens of a content piece – picture, audio, video, art, written stuff.  
2. Every NFT is unique and lives on the Ethereum blockchain.  
3. They are the digital holy grail for artists to make money. 
4. NFTs represent a cultural shift and revolutionize how people buy and sell art online while ensuring creators get paid.
     

Hope this article clears up the air around NFTs for you. Keep reading our blog for more interesting insights in the future.