Throughout the years, various aspects of our lives have become digitized in the 21st century; art and collectibles are no exceptions. In the past, it was difficult to monetize an individual’s creative digital content. But today, as the online content market is booming, creative digital content creators can now sell their work as digital assets on the blockchain. In this article, we’ll look at the basics of how NFTs work and how they can be used by artists. So check it out to learn more about NFTs.
A non-fungible token (NFT) is a cryptographically unique digital object that can be owned by an individual or by an organization. The main use of these tokens is to represent digital goods, such as artwork or music, that are scarce or hard to get. Popular examples are cryptocurrencies like Bitcoin or ERC-20 tokens sold on the Ethereum blockchain.
Digital artists have seen huge sales in NFTs (non-fungible tokens that represent an asset other than money) to a growing audience using cryptocurrency (digital currency tokens) to buy unique items online. For example, Michael Wonkelmann, professionally known as Beeple, sold a 10-second video clip for $6.6 million while Jack Dorsey sold his digitally autographed first tweet for $3 million. NFTs are currently selling for millions of dollars, but are they really worth all of that money?
NFTs can be any digital file from a range of categories such as games, fashion, and music. Although, the most common use of NFTs is for buying and selling digital art. Digital keys that use similar technology to secure cryptocurrencies keep NFTs safe. A public key serves as the ownership assignment, a private key authorizes change in ownership, and blockchain maintains a “tamper proof” ledger of transactions. Digital collectibles can be copied exactly while blockchain provides effective proof of ownership of an NFT.
The Benefits of NFTs for Creators and Artists
Artists gain several benefits from using NFTs. Such as being able to get paid a percentage of all future sales, sell art that would otherwise be tough to find a market for, and prove the authenticity of a piece. However, the value of an NFT depends on the creator’s ability to maintain the scarcity of their digital work (or the placing of other limitations on a digital collectible) while not selling additional copies.
Even though there are security measures in place to protect NFTs, some dangers of using NFTs still exist. Simply forgetting your password can cause you to lose access to your account while private keys are prone to being hacked if used or stored on a networked device. If there is an issue with a URL linked to a collectible, the file could get lost. You also have to watch out for different kinds of scams such as free giveaways, doppelganger stores, and counterfeit collectibles.
NFTs are legitimate, but buyers should practice caution, just in case.
Further reading: What Can Become NFTs in Sport Domain