NFT art is blowing up the internet but what is it really all about? Many people I know are still confused about what they are and why they are so expensive.
In this article, I am going to explain what is an NFT, how do they work and what makes them so valuable.
What is an NFT?
Before we dive into NFT art, let us have a look at the term NFT.
An NFT stands for a non-fungible token which is a digital asset in a form of JPEG, GIF, MP3, video and many more.
Most NFTs are part of the Ethereum blockchain. The Ethereum blockchain certifies a digital asset to be unique and therefore is not interchangeable. This makes it rare and expensive.
If you are lost at this point, think of NFT tokens as data and the blockchain as blocks of data.
Are cryptocurrencies the same as NFTs?
Fiat money or physical money and cryptocurrencies are fungible meaning they can be traded or exchanged for another. They are also equal in value. A dollar bill will always be worth US$ 1. The same goes for cryptocurrency. 1 Bitcoin will always be worth 1 BTC.
NFTs on the other hand are different. Each NFT has a digital signature that makes it impossible for them to be exchanged for an equal value, hence, it is non-fungible. One CryptoPunk is not equal to a Nyan Cat NFT simply because they’re both NFTs.
What makes an NFT art so expensive?
For the collector, they buy NFT art for its novelty and creativity. Just like physical collectables such as baseball cards, comics and toys, there is a market for NFT art. Some NFTs are expensive because of their uniqueness, quality and story behind them
As for the artist, it is a new way of monetising their work by selling digital art to collectors without having to put it up in a gallery.
This has opened new ways for them to explore their relationship with art.
Many NFT buyers are crypto enthusiasts and tech-savvy people who understand the idea of owning digital assets. In some cases, these buyers are buying to show off their crypto net worth.
Can NFT art be reproduced?
You can copy a digital file as many times as you want by downloading the same file the buyer paid millions for but it is not the same thing.
Here is why.
NFTs are designed to give you something that cannot be copied which is the ownership of the work. However, just like physical artwork, the artist can still retain the copyright and reproduction rights.
In physical art collecting, anyone can buy a Mona Lisa print but only one person can own the original art. The same applies to NFT art collecting.
You may think NFT art is just hype or a bubble that will explode soon. Regardless of whether the price fluctuates or not, it is here to stay. The NFT world will continue to expand as technology evolves. Artists are effectively leveraging technology and will further reinforce the importance of this space.
But that does not mean that NFT art will last forever as it is susceptible to bit rot. Just like physical art, NFT art is prone to image quality deterioration, inaccessible file formats, websites going down and forgotten wallet passwords.