How NFTs are Transforming the Art Industry

Isn’t it amazing how NFTs have come into our lives and increased the popularity of blockchain technology? Over the past year, everyone from small creators to world-famous brands have been looking for ways to exploit the new trend associated with non-fungible tokens. It seems that the art industry has opened up the most opportunities. With NFTs artists have a chance to enter digital marketplaces and get rewarded for their work. In this article, we will find out how NFTs are transforming the art industry and what to expect next.

How NFTs work

NFTs are similar to certificates, whose reliability is ensured by a blockchain in which all transactions relating to the asset are recorded. Blockchain is the same technology on which Bitcoins are based, with a small but important difference: while Bitcoins are interchangeable tokens, NFTs are unique and non-interchangeable assets.

Unlike bills and cryptocurrencies, NFTs cannot be exchanged for each other because no two NFTs are identical. Money (as well as Bitcoin) has a unit to which a value is assigned: this means, for example, that a 5 Euro bill is interchangeable with any other 5 Euro bill.

For this reason, you can have a digital wallet containing X amount of Euros or Bitcoins, while you cannot have a wallet containing X amount of NFTs because NFTs are unique and limited in number. NFTs cannot be copied or transferred without the owner’s permission, but they can be sold on open NFT marketplaces such as OpenSea. NFT tokens store information related to an asset, such as a work of art.

Someone who buys a work or object associated with an NFT is not buying the work itself. He or she buys the ability to demonstrate the title to the work or have a certificate of authenticity. The vast majority of NFT tokens have been created using one of two Ethereum token standards, ERC-721 and ERC-1155, although other competitors are emerging very quickly.

NFT use cases

Today NFTs are used in art, games, document management, collections, etc. In this article, we will cover only art, games, and document management. You can find more detailed information about NFT use cases in our Medium article “The Most Promising NFT Use Cases”.

Art

Digital art is gaining momentum because the creation of an NFT requires minimal or no investment at all (it depends on the site where the token is created). Offline registration of copyright to intellectual property requires the collection of a document list and the payment of a fee. NFTs perform all the same functions. They include by default a link to the work and the crypto-address of the owner, which indicates that the user has ownership rights.

Another advantage of digital art is that the author of a work can sell his or her creation to another user, but their income from a conditional painting is not limited to that. If another user resells it later, the author will also receive a percentage. It is much more difficult to write such conditions into paper contracts because it requires the fulfillment of appropriate conditions from all parties and subsequent control. In the blockchain, this operation is performed automatically without involving users.

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