What are NFTs and how it is going to change the way we look at digital art?
Humans were always fond of social currency even in ancient times humans have collected several things from animal skins to artistic objects for their aesthetic, economic, and emotional value. Collectors, traditionally aristocrats and millionaires, have acquired the works of artists such as Picasso, Van Gogh, Caravaggio, or Banksy at astronomical prices. Their market value is very high because they are unique original pieces in the world. Exclusivity has prompted a sale that has spread to other artistic branches such as music, cinema, or video games.
In the digital world, a token is a unit of reference. While the shares of a company all have the same value, a non-fungible token associates a certain value with a unique, rare, and indivisible digital object. The value that we previously placed on works of art for auction can now also be applied to intangible assets.
With the creation of Bitcoin, the concept of “trustless” digital scarcity (that is, in which intermediaries are not required) was introduced. Before Bitcoin, the cost of replicating something in the digital world was close to zero. The emergence of blockchain technology has made programmable digital scarcity possible — and it is being used to make the digital world emulate the real one.
Non-fungible tokens (NFTs), play here a vital role and are also often called crypto-collectibles, expand on this idea. Unlike cryptocurrencies, in which all tokens are created equal, each non-fungible token is unique and limited in quantity. Western stars such as Eminem, Grimes, Paris Hilton, Lindsay Lohan, as well as Indian celebrities Amitabh Bachchan, Vishal Malhotra, and more have all jumped in on the act.
NFTs are essentially virtual assets that have no tangible form but can be sold like any other piece of property.
They are a form of unique cryptographic tokens on a blockchain like Ethereum or Binance Smart Chain. In some sense, they can be considered crypto collectibles.
How NFT’s are changing digital artwork?
There is a number of debates out there criticizing the nft’s and digital art, mostly coming from those who fail to understand why someone would part with a ton of cash for an image that can be downloaded, or copy-pasted, by someone else at the click of a button.
People and institutions have shown themselves willing to part with extraordinary sums of money for physical masterpieces, even though anybody can buy a high-quality print or replica which would require an expert analyst to spot the difference. Why? For the ownership of the original. Likewise, anyone can copy a digital artwork, but only one person can own the original.
The question is one of value: what makes art valuable, and do the same rules apply to the digital as to the physical?
NFTs are best understood as computer files combined with proof of ownership and authenticity, like a deed. Like cryptocurrencies such as Bitcoin, they exist on a blockchain — a tamper-resistant digital public ledger. But like dollars, cryptocurrencies are “fungible,” meaning one bitcoin is always worth the same as any other bitcoin.
Digital art has long been undervalued, in large part because it’s so freely available. To help artists create financial value for their work, NFTs add the crucial ingredient of scarcity. For some collectors, if they know the original version of something exists, they’re more likely to crave the “authentic” piece. Scarcity explains why baseball-card collectors are willing to pay $3.12 million for a piece of cardboard with a picture of Honus Wagner, a legendary Pittsburgh Pirate. That is also one of the reasons why people buy Nike special edition and are willing to pay extra for it, but sneakers and that all exist in the physical space, so it’s easier to understand why they’re worth something. It can be harder to understand why digital art, or any other digital file, has value.
But now as we are living in the virtual world and we can expect a lot of social currency from all around the globe and as If nearly your whole world is virtual, it makes sense to spend money on virtual stuff.
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