The art market is exploding because of NFTs (non-fungible token), these tamper-proof digital certificates that certify the authenticity of a virtual object. For some, NFTs are the future of property, for others, a fad reserved for collectors and speculators.
NFTs are new and fascinating. These are unique digital goods, in circulation since 2014, whose transactions are made in cryptocurrency. Used to indicate the ownership of a digital object (often a digital work of art), these tokens are disrupting markets around the world, both in art and video games, as well as in events and insurance.
You still don’t see clearly there? This is normal, the subject is complex! That’s why we’ve written this article to help you better understand NFTs.
What does NFT mean?
NFT stands for non-fungible token. Let’s start from the beginning: what does non-fungible mean? The adjective “fungible” is an economic term that refers to a good or asset that can be exchanged for another good or asset of the same value. For example, a dollar bill is fungible, since it can easily be exchanged for another dollar bill of the same value.
A “non-fungible” item cannot be exchanged for something of equal value. A plot of land is non-fungible, since each plot has its own characteristics, and finding another plot whose value is strictly identical is difficult, if not impossible. Art is another example of a non-fungible asset, since its value is very subjective. That’s where the NFTs come in.
An NFT guarantees the exclusive ownership of a digital asset (for example, that of a work of art, a purchase in a video game or a tweet – yes, a tweet!). You can buy an NFT at a certain price, but the fact that it is non-fungible allows its market value to fluctuate.
Since an NFT can only have one owner at a time, when you purchase an NFT, you are buying sole ownership of a digital asset. However, this does not mean that you have the exclusive rights as to who can watch or share your work.
Take for example the NFT that has sold the most expensive to date, the work Everyday: The First 5000 Days by the American artist Beeple, which represents a digital collage of 5,000 pieces. The owner of this NFT is Vignesh Sundaresan, founder of Metapurse and the network of bitcoin distributors, BitAccess.
Although Mr. Sundaresan is the official owner of this NFT, this image has been copied, shared and viewed by millions of people all over the world, without any compensation. Buying an NFT is like buying an autographed work. The signature of the NFT is addressed to you, but everyone can see the work.
Any digital asset can become an NFT. Since the introduction of NFTs, we have seen :
works of art
shopping in video games
Why would you want to buy an NFT?
The more you are looking to break into the strange and fascinating universe of non-fungible tokens, the more you might try to understand the point of owning them. There are several reasons to invest in it.
There is nothing like scarcity to increase the craze around an object. Indeed, an NFT can have only one owner. Potential buyers thus set their sights on a particular property and buy it before someone else becomes the exclusive owner.
Think of a website that would tell you that there is only one copy left of the pair of sneakers that you absolutely want. Most of the time, this creates a rush that encourages you to make your purchase, even if it is not well thought out.
The art of collecting
In the same way that baseball cards are exchanged at recess, NFTs are trading cards for very well-to-do people. Although there is no inherent value in these cards other than the one that the market assigns to them, their fluctuating value makes their possession and exchangeability a high-risk game of chance.
It is then easy to make comparisons between NFTs and the art market.
However, unlike the art market, NFTs give more autonomy to artists, who no longer depend on galleries or auction houses to sell their works. By eliminating intermediaries, artists can sell their works directly to buyers and keep a larger share of the profits.
how to make money with nfts
Create your own NFT and sell it
NFTs are usually sold on marketplaces with different processes depending on the platform. For this purpose, there are dozens of sales platforms, including OpenSea, Axie Marketplace, Rarible, SuperRare or Mintable. Once you have selected a marketplace, you will need to link it to your cryptocurrency wallet. Then you will need to download the digital file you want to convert to NFT and follow the conversion process indicated on the marketplace you have chosen.
Each platform will have different processes and will either allow you to sell your NFT in a single transaction or earn royalties on subsequent sales. Once you have filled in the information and your file is downloaded and converted, you can now sell it. At this stage, the marketplace will naturally charge you a gas fee that is related to the execution and registration of transactions on Ethereum. These fees vary depending on the network activity.
Resorting to NFT trading
Some entrepreneurs and investors use NFTs as stocks and make profits by buying and selling them. If you have already purchased a collection of NFTs and no longer need them, you can easily sell them in the same way as if you created them yourself. The right time to sell an NFT depends on its nature, the reason you bought it and the interest it arouses. A quick search on the Internet and on the market can help you determine this.
In addition, you will need to calculate potential losses and profits by including some additional costs. These include transaction fees, marketplace listing fees, and royalties paid to the original owner. These fees will ultimately reduce the final amount of your winnings. For more complex NFT transactions that require in-depth knowledge of the cryptocurrency industry, you may want to consider consulting a professional.
It is important to remember that while the process of selling NFTs is simple, it is not as easy as it seems. Converting your digital content to NFT and selling it will incur fees that can be significantly high depending on when you put it up for sale. Trading in NFTs can be accompanied by uncertainties, given the volatility of this young market
how to create your own nft
As a reminder, an NFT is a non-fungible token (non-fungible token). In other words, it is a virtual certificate registered on a blockchain, making it possible to identify a digital work, much like a certificate of authenticity, but dematerialized. Unlike a currency, an NFT is non-interchangeable, that is, it cannot be exchanged for a good or an asset of the same value.
Wondering how to create an NFT?
Whether you are a musician, painter, cartoonist, videographer, photographer, illustrator … or GIF creator, we will see in this guide the different steps to create an NFT, namely :
Register on a marketplace
Download his work and fulfill the conditions of sale
Sell your artwork
Crypto-art and the new economy?
John Karp believes that the NFT will bring about a new golden age for artistic creation. “In the first place, NFTs allow more and more creators to make a living from their art. The main reason is that the number of collectors has multiplied,” explains the specialist. This new ecomomy has been named crypto-art. It is defined as the alliance between the technologies offered by cryptocurrencies and art.
For the author of “NFT revolution”, crypto-art offers the opportunity for artists to break out of dependence on online music platforms. “The fact that artists receive a tiny fraction of the revenue generated by listening to their works on streaming platforms is an inconsistency.
The Internet creates a direct relationship between artists and their community, so there is normally no need for intermediaries anymore. The NFTs make it possible to find this direct relationship again,” says John Karp.