Have you been hearing about NFTs at every turn?
If you're an investor and an art collector, then you're probably itching to know what it's all about.
With the global NFT market hitting $2.5 billion, NFTs and crypto art have been making headlines the world over.
One of the reasons for this is the high values that NFTs are being sold for. Another is the way NFTs are predicted to revolutionize the art scene.
As an investor or art collector, knowing about NFTs, how they work, and what role they will play in the future can position you to make some informed buys and investing decisions.
Ready to get savvy to NFTs? Keep reading to find what they are in this crypto art guide.
What Is Crypto Art and NFTs?
If you look up "crypto art definition" or NFTs, one of the common ways to describe this new phenomenon is tokenized art.
What this means, at its core, is that NFTs, short for non-fungible tokens, allow artists to create digital art and then essentially register it on a blockchain.
This allows the digital asset to be certified as unique.
One of the problems with digital art and the online art market is that digital assets can be easily copied and distributed. Previously, there was no way of buying and collecting "original" copies of digital artworks.
Now, however, NFTs have changed all of that. Through blockchain technology, artists can now create an authenticated artworks. This enhances the value of digital and crypto art as a collectible item by creating scarcity.
Originally, NFTs were primarily used for selling crypto art. In other words, art that centered around the crypto space. This included things like memes, which brought what many have been terming the "meme economy" to life.
However, because NFTs allow artists to essentially copyright digital and physical artworks—the technology is now being applied to all types of art.
NFTs and Physical Art
Although NFTs have proven pivotal for digital art, the impact of this crypto art trend isn't confined to pixels and memes.
NFTs started out with a digital-centric use case. However, their potential quickly made itself known in the physical art scene as well.
Although physical art doesn't have quite the same duplication issues like that of digital art, it does have its own authentication problems. Cases of forgery have plagued the art world for centuries.
Now, NFTs might be able to solve that problem. The theory is that by authenticating an original art piece on the blockchain, artists, auction houses, and collectors can be 100% certain they are dealing with the original.
Unfortunately, there have been some issues with this. The main cause is that so far there aren't any controls over who can tokenize an artwork. This has led to artists' works being tokenized by third parties.
The Impact of NFTs on the Art World
One of the biggest factors in art evaluation is authentication. Although tokenization does have some teething problems, it still offers artists a revolutionary way to "copyright" their works and allow for fail-proof authentication.
Benefits to Artists
Besides providing authentication, NFTs also give artists a chance to benefit from the future value of their art pieces.
Another issue that has hounded the art world since its inception is that artists typically receive a pittance for their works when they sell them. As time passes, and the artistic works gain acclaim, they might be sold later for vast sums.
This is is one of the reasons why some of the most famous artists—such as Van Gogh, Rembrandt, and Paul Gauguin—died in poverty. Now, their works are sold for more money than the average American will earn in their entire lifetime.
Of course, not all artists will see this type of appreciation on their works. However, the pattern holds true that a lot of art commands far higher prices after it has been sold by its creator.
This is inherently unfair. Fortunately, NFTs are changing this.
During tokenization, artists are able to set commissions on future sales. For instance, an artist can specify that every time a specific painting is resold, they are to receive a 15% commission on the sale.
This allows artists to create a form of passive income for themselves. It also ensures that creators get a cut of future value increases on their art.
Benefits to Collectors
Besides benefiting artists, tokenized art can also be advantageous to collectors. For one, it provides a layer of surety that the piece of art you are buying is the original.
It also allows you to collect originals of digital art, something that wasn't possible before. Previously, no one could buy and hold digital art. Now, thanks to NFTs it is becoming commonplace.
This opens up unique investments opportunities. If you are familiar with the crypto markets, or crypto art culture, you might be able to spot a worthwhile investment piece.
If you are into collectibles, NFTs open up a range of different investment avenues to pursue. For instance, CryptoKitties, one of the first large-scale NFT ecosystems, allows investors/players to buy and sell digital kitties.
But it doesn't stop there. Once you have a virtual kitty in your possession, you can breed with it. Depending on the lineage of your cryptokitty, you might be able to breed out a rare cat that can sell for hundreds of thousands of dollars.
At the moment, the most expensive cryptokitty ever sold went for a whopping $1.4 million at today's eth prices.
How to Buy Crypto Art and NFTs
Do you want to get in on the crypto art trend? If so, it's not too complicated. However, you will probably need a basic understanding of how to transact with cryptocurrencies.
Currently, the majority of NFTs live on the Ethereum blockchain. This means that you will need to purchase some eth in order to buy an NFT or piece of crypto art.
Once you have purchased your eth tokens you can exchange these for the NFT token and gain ownership over the original artwork.
Buying Ethereum Tokens
The first step to buying eth tokens and NFTs is creating an Etheruem wallet. One of the easiest and most secure ways to do this is via Metamask.
After this, you will need to purchase your eth tokens. To do so, you'll have to create an account with an online exchange such as Coinbase. Here you will be able to place your order.
Once you have purchased your eth tokens, you can then move them over to your wallet, instead of keeping them on the exchange.
From here, you can then use your wallet to fund online accounts at NFT marketplaces.
There are some intermediary platforms and sellers that facilitate cash/fiat transactions. However, although this might be more convenient, it is also a lot less secure, as you have no guarantee that the seller will actually send you the NFT.
Can You Make Money Flipping Crypto Art?
If you're an investor, then you're probably wondering is it possible to make money with NFTs and crypto art?
The answer is absolutely. Is it guaranteed? No.
Like most other investments, crypto art and NFTs require a mix of savvy market knowledge and luck.
Just because you bought a random meme whose owner is arbitrarily selling it as an NFT for $20,000, doesn't mean that you've bought something valuable or that you'll be able to flip it.
On the other hand, there have been cases of specific, iconic memes selling for millions. For instance, the Dodge coin meme recently became tokenized and sold for a whopping $4 million.
If you want to make money flipping crypto art and NFTs, then you're probably best off taking one or more of these three approaches:
- Researching your buys heavily and making calculated purchase decisions
- Treating it as fun, and doing it because you enjoy collectibles
- Buying art you feel a personal connection to
If you enjoy collectibles, NFTs can be a great way to enjoy yourself. With time, your collection might even become highly valuable.
On the other hand, maybe you love art, and NFTs give you a way to invest in authenticated originals of both virtual and physical art pieces.
Lastly, perhaps your main interest is to make a nice profit from flipping crypto art or NFTs. In this case, there are ways you can conduct research to increase your chance of turning a profit.
For instance, if you are buying up cryptokitties, you can do a fair amount of research on kitty lineage and rare genetic traits. This will allow you to make calculated and informed buying decisions.
Are You Looking for Some Crypto Art?
Although crypto art started as an underground, highly niche scene, it has now expanded to command incredibly high prices. What's more, it brought about the birth of the NFT.
No matter which way you look at it, the concept of NFTs is likely to revolutionize the way we transact—especially when it comes to art. Whether you want to add NFTs to your existing art collection, flip them for profit, or dabble in collectibles, NFTs offer a secure and revolutionized route.
On the other hand, maybe you're looking for some art that doesn't require you to start opening crypto wallets and online exchange accounts?
If so, we've got you covered. View our wall art collections here to browse a range of steel and acrylic options, specifically designed for traders and investors.