What is an NFT?
You might have heard this term being thrown around a lot these days. NFT’s are a unique digital phenomenon that has recently experienced a huge surge in popularity. You can think of an NFT as a formal certificate showing that you officially own a particular digital commodity. The digital commodity in question could be an image, a song, a meme, a video, a tweet, etc. Some popular examples you may have heard of include the famous Doge meme being sold as an NFT for $4 million, or the first tweet by Twitter CEO Jack Dorsey selling for $2.9 million.
The term NFT stands for non-fungible token. ‘Non-fungible’ means that it is unique and cannot be replaced. Bitcoins, on the other hand, are fungible, meaning they are not unique. So, you could trade one Bitcoin for another Bitcoin and you would have the exact same thing, NFTs simply means it is unique and cannot be replaced with something else. A single person can only own an NFT, and the record of the sale, price, and ownership all exist on a public ledger (blockchain). When the NFT changes hands, the blockchain acknowledges the transaction viewable by all in public.
Multiple memes and tweets are being sold as NFT’s, but another area that is gaining traction in the arena of NFT’s is that of digital artworks. NFT’s have been completely transforming the landscape for digital artists. This is because digital artists can sell their art as NFT’s to authenticate ownership of their work and generate income. Unfortunately, it is incredibly easy for people to copy and replicate images of digital art. Although NFT’s do not prevent people from copying digital artworks, they do allow digital artists to provide customers with the reassurance of an authentic token of ownership. If this concept seems a bit confusing, you can think of it this way: there is only one authentic Mona Lisa in the world housed at the Louvre Museum in Paris, France. However, there are multiple prints and replicas of it everywhere. Similarly, if you own the NFT for a digital artwork, it is akin to you owning the original Mona Lisa. People who do not own the NFT of a digital artwork but have copies of it can be thought of as having access to replicas.
NFT’s have now entered the mainstream art world. Christie’s, which is one of the top art auction houses in the world, held its first-ever NFT auction in 2021. The auction was for an NFT of a digital artwork created by acclaimed digital artist Beeple and it sold for a whopping $69 million. The artwork was a JPEG image file portraying a collage of all of Beeple’s digital illustrations that he has been posting on the internet every day since 2007. Beeple’s real name is Mike Winkelmann, and up until the NFT auction, he had never made more than $100 from a single print of his digital artworks. This shows how truly transformative and life-changing NFT’s can be for digital artists. Another reason why NFT’s are so beneficial for digital artists is that they can set up contracts whereby they get royalties each time the NFT is resold. Additionally, NFT’s can help bring about greater transparency. This is because ownership of all NFT’s is recorded in a public ledger, so you can easily trace transactions.
Indeed, NFT’s are becoming increasingly popular and sought-after in the art world. Individual artists, major auction houses, art galleries and other art institutions are all getting involved with NFT’s. However, there are plenty of critics who believe that NFT’s are no more than a passing fad and even question their true worth. Some critics argue that a lot of the digital artworks being sold as NFT’s are low-quality creations with little to no creativity or effort put into them. This, however, is a subjective argument since art itself is subjective. An artwork that touches and amazes one person may seem mundane and boring to another. A more substantial criticism of NFT’s is that there are currently no regulations that stop people from taking your digital artwork and turning them into NFT’s which they then profit from. Perhaps the strongest criticism of NFT’s is the damage they cause to the environment. Regardless of whether it is a meme, tweet or digital artwork being made into an NFT, a lot of energy is consumed in the process. This is because NFT’s, just like Bitcoin and other cryptocurrencies, rely on a process known as mining. Mining is a repetitive data calculation carried out by computers and it requires a lot of electricity to power. Therefore NFT’s are creating large carbon footprints.
Clearly, NFT’s have opened up a whole new collector’s approach to digital art and offer many benefits to creators of digital art. On the other hand, there are valid criticisms, dangers and societal impacts to consider when dealing with NFT’s. Perhaps with time innovations and advances in technology will allow for NFT’s that are safer and more socially responsible. Whether you are enthusiastic about NFT’s or would rather see them gone, there’s no denying that they are an incredibly fascinating concept and have left their mark on the art world.
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Blog Post Written by Artezaar Artist Thomas Lenz & our staff writer Shreya Alagramam.
