Recently a JPG file was sold for $69 million at Christie’s auction. If that comes to you as a surprise, then it might be the right moment to reconsider your meaning of “fine art” and to start exploring the universe of Cryptocurrency and NFT digital art.
When a crypto NFT digital art sold at Christie’s auction for a huge amount of 69 million USD, the winning bidder did not receive anything physical – no fine artwork, no sculpture, not even a paper print.
Instead, he just got a unique virtual token known as NFT. The term “Non-fungible” in crypto NFT implies that no 2 tokens are interchangeable; every token is unique, unlike money, of which any two $100 notes are fungible and of similar worth.
NFT Digital art is undergoing a rebirth and, in this article, I will cover the most important aspects you need to know to about NFT crypto art.
What does NFT digital art stand for?
NFT art stands for Non-Fungible Token art, a kind of virtual asset whose rights are managed on a Blockchain. Though most Non-fungible tokens are inherently virtual, you can utilize NFT crypto art to track physical assets also. A typical instance of NFT crypto art includes NFT digital artwork, unique collectibles, in-game items in games, and even some domain names.
The important function of any NFT art is that it is unique, even though a creator can choose to have several near-identical copies of an NFT digital artwork but all must be different in one way or another. The actual crypto NFT have their rights managed on the Ethereum (ETH) network. There are currently multiple Blockchain standards that can be used by people who desire to create and sell any NFT art.
When it comes to cryptocurrency coins, Ethereum is currently the biggest competitor to the crypto giant Bitcoin (BTC).
NFT crypto art is just a digital representation of something unique that uses a smart contract to prove that it is authentic. Crypto NFT can be anything – such as pictures, videos, or music.
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How does NFT Crypto art work?
NFT crypto art are supported on Blockchains like Ethereum and can be bought or sold on any Ethereum-based crypto NFT market website. NFT digital art have important identification and other additional data stored in smart contracts held together by a unique address.
When an individual or a company purchases a NFT crypto art, they own this smart contract. This individual data makes it both easily verifiable and simply distinct from any other crypto NFT digital artwork. This makes the mining and circulation of “forged collectibles” pointless because every NFT digital artwork can be easily tracked to the actual issuer, seller and current owner.
All this is possible with Blockchain technology. Blockchain uses cryptography to combine blocks into an ongoing chain of information. Every block is locked by a cryptographic chain of characters that exclusively identifies the set of records and connects it to the old block.
These data are stored in a structure called Merkle Tree. This allows for quick retrieval of Blockchain records for any crypto NFT digital art piece. This design makes it exceedingly difficult to change transaction records stored in Block.
Just like every asset, due to supply and demand for any NFT artwork from collectors, gamers, and investors, people are often ready to pay huge amount for popular or exclusive crypto NFT artworks in digital form or physical form.
Money is not only earned by simply creating, selling and buying NFT digital art but also in few cases, some Non-fungible tokens will also mechanically pay out royalties to their miners when they are sold.
What is crypto NFT digital art used for?
NFT digital art is often utilized in collection of artworks that can exist in digital form and needs authentication of digital ownership. For example, NFT crypto painting, digital items in video games, digital superhero collectibles, movies or TV shows merchandise in digital form.
Non-fungible tokens can be anything that exists in virtual form – even something like tweets (on Twitter). The best example on this can be illuminated by the Founder of Twitter, Jack Dorsey’s, who’s first ever tweet was sold as NFT crypto art for $2.9 Million. He was paid $580k for every word in his first tweet – “Just setting up my twttr”.
Later, he announced that the sale proceeds will be converted into Bitcoin and donated to the Charity fund, Give Directly, providing Coronavirus relief assistance to 6 African States. Some other examples of recent NFT art sales are as follows.
- Kinds of Leon sold Non-fungible tokens of their new album and made over 2 million USD.
- Last February, Lebron James match NFT crypto card on the NBA top shot was sold for $208k.
- That same month, AXIE infinity, a virtual land title in the game industry, was sold for 1.5 million USD.
Where is NFT crypto art stored?
Most NFT cryptos are run on Ethereum blocks and stored on virtual crypto wallets. Flow blockchain, for instance, hosts the NBA’s memorabilia crypto NFTs. Storing NFT digital art on well-establish blocks is essential because they’re less vulnerable to hackers exploiting a security error.
Just like other digital currencies, crypto NFT is stored in compatible virtual wallets. A wallet stores a piece of code or a private key. The piece of code is required to unlock the digital wallet and access the content that is sent to the public code or key.
Why is NFT art so expensive?
Even common digital currencies like ETH and BTC are fungible tokens. If you send someone a BTC and he/she returns it, it need not be a similar token. On the opposing, any NFT has unique values, and so it cannot be interchanged with others. NFT crypto art is one of kind assets in the virtual world that are bought/sold like any other. This is the reason crypto NFT is very costly as compared to any other digital token
Why NFT digital artwork are valuable?
When NFT digital art first gained attention of the audience a few months back. Only a few market players understood what they were & what they were for. Currently, crypto NFT digital artworks are a booming market with every piece selling for thousand and even in millions of dollars.
Since they are unique and easily verified using a unique identification address, Crypto NFT digital artworks are assets that can easily be collateralized and leased to create further cash flow. For example, in a game, there can a sudden huge demand by players who wish a specific asset or character to complete a mission or a specific stage of the game.
Is NFT the future of art?
The future of NFT digital art is everyone’s guess for now. Using blockchain technology, the Ethereum network relies upon powerful servers completing complex outcomes and therefore has similar environmental problems like that of Bitcoin (BTC) due to the power consumed by those servers.
Storing art in a digital platform using crypto NFT and blockchain technology seems to be the most secure end fastest way. However, this latest and most intriguing method to secure access and prove authenticity of any NFT digital artwork can be deemed environmentally damaging.
NFT crypto art at this point can be described as something for collectors to just speculate on. Currently, everyone desiring to invest in crypto NFT art collectibles should understand that it is not clear whether the market will survive, let alone flourish, for long, until & unless the situation becomes clearer.
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