NFTs are now among the best-selling artworks in the most famous galleries in the world, and artists like Damien Hirst are already surfing the new wave. It is a big deal, and in the in the past year NFTs have become an extremely debated topic, but despite lots of people talking about it, fewer really understand what is going on.
You might be asking yourself why Beeple’s Everydays NFT, which is basically a collage of his Instagram feed was sold at auction for over $69 million, or why art exhibitions are happening in the metaverse. We are here to disclose all the NFTs secrets to allow you to enter this new way of creating, buying, collecting, and experiencing art. To do so, we will have to start from the very basics.
What is a NFT?
An NFT, non-fungible token, is a unique and non-interchangeable datum stored on a digital ledger (blockchain) that can be used as a certificate of authenticity, representing as unique items easily reproducible items such as photos, videos, audio, and other types of digital files.
They are created with algorithms produced by the blockchain that connect that specific set of data to previous records, creating therefore a chain. This process takes the name of minting process and ensures the authentication of each digital file. Just like a digital signature to track that specific NFTs ownership.
Before adding art to the equation, let's make a step back and explain a few concepts to have a complete framework on what is going on:
- Fungible and non-fungible tokens
Have you ever heard of Bitcoins? Bitcoins are tokens. Tokens are digital assets that can be bought and exchanged. They are what is also called crypto coins, in other words cryptocurrency; they have a market and a value, just like real money.
While tokens can be exchanged, NFTs are not fungible. Once you buy a specific NFTs, you cannot exchange it because they are connected to a contract of property of a digital item. You can sell and buy NFTs, producing a new block in the chain, but you cannot exchange it like you do with Bitcoins. You use bitcoins to buy NFTs.
The blockchain is the engine of the whole system. A digital technology that consists in decentralized storage of data, where information and transactions are recorded ad stored across several different computers through a continue cryptography process. The blockchain technology serves many different cryptocurrencies.
The majority of blockchains have an extremely negative impact on the environment because the minting process requires a great amount of electricity, which leads to high carbon emissions. However, there are sustainable solutions, blockchains that use different minting methods than the traditional ones.
Now, having said all this, we can talk about crypto art.
We refer to crypto art when talking about digital artworks whose property can be authenticated by means of non-fungible tokens (NFTs).
As well as with material artworks, the mechanism by which an item becomes an artwork goes through the concept of authenticity. In the digital era, where any item can be reproduced and shared easily in any platforms and NFTs by protecting the authenticity of digital items making it unique and valuable, are what makes a digital item an artwork.
Once a digital artwork is uploaded on a blockchain in the form of NFT, it will become a unique piece of art, as it will always be possible to determine the original file even if its copies are shared indefinitely on the web. With the property of the artwork protected with the NFT, artworks can be reproduced and shared by users online, even if there is only one (or more than one) owner.
Crypto art is young, complex and continuously evolving; in this series of articles we will try to disentangle this new way of producing and collecting art, stay tuned!