NFT: Symbiosis Between Art And Digital Technologies
Non-Fungible Token (NFT) is one of the main cryptocurrency industry trends in 2021. Most probably, you have already faced the abbreviation NFT in news. For example, Twitter Founder Jack Dorsey sold his first tweet as an NFT, the GIF image by Nyan Cat was auctioned off as an NFT for half a million dollars, while Lindsay Lohan sold her portrait as an NFT and shared her belief in “financial decentralization”. Every day something is up for sale as an NFT: video, pictures, writings, tweets, graffiti. The transaction volume of NFT tokens has already exceeded $400 million. So what exactly is this phenomenon that is rightfully considered one of the most interesting recent spheres in the crypto industry?
What is an NFT token?
“Non-fungible” tokens are not interchangeable. In an open blockchain, all tokens are exactly the same and are interchangeable. NFT technology works with unique tokens that can not be interchanged or falsified. Blockchain from non-fungible tokens allow to solidify the ownership of intellectual property like art and this is exactly what newsmakers are doing. NFT technology has been developing since 2017 on the Ethereum platforms. Since its inception, goods for approximately $5.35 million have been sold as non-fungible tokens.The first-ever case of transforming a physical object into an NFT asset occurred in March when the art piece of prominent artist Banksy was burned and converted into an NFT token.
The process was live-streamed to YouTube and Twitter that attracted a fair amount of attention from the art community. Consequently, a digital token representing the art piece was auctioned off for $93 thousand and this method of selling ownership rights got an army of followers.NFT technology allows tokenization of not only art but practically anything. Tokenization enriches the converted goods with several useful benefits. For example, upon purchasing the NFT token that represents a particular item, a buyer gets exclusive rights for this item in the form of a decentralized digital asset. It is important to recognize that connecting an NFT token to a digital item does not automatically jack up the price up to a million dollars. The TTM Bank CEO Vladislav Utushkin shared his opinion on the matter:
“The art world appreciates innovations and unconventional approaches. An average citizen might not understand why beautiful landscape paintings that reproduce reality or skilful portraits that are indistinguishable from photos costs cents while a collage, an installation from everyday items, or a collection of video cuts are sold for millions. But this is a very primitive approach that shows that a person does not understand that art is not merely an imitation of the world around. Art is about seeking oneself and new forms of self-expression. This has always been like that. Cubism, primitivism, surrealism, pop art – these were art movements with something new not-yet-existing behind it. The value of the art piece is in its novelty and uniqueness in the context of preceding movements.
NFT tokens blend seamlessly into the concept of art: every token is indivisible, inimitable and unique. This is a symbiosis between traditional forms of art and digital technologies, notably the most avant-garde technologies that are linked to decentralization. Then again, context is crucial. It has been a long time since art is no longer evaluated solely per se, independently of the context, in the absolute. It needs the context for the manifestation of the art piece that is engraved in the digital sphere. In the modern era the context simply assumes the need to incorporate digital elements into the creative process”, – shares Vladislav.
Popular NFT spheres
One could talk at length about the influence of the NFT technologies and the new opportunities it brings. Already today, thanks to NFT, artists are given an opportunity to create and sell digital art in a few clicks without lengthy legal procedures and paper chase. The ownership rights to digital objects open new touchpoints for interacting with an audience, reveals new convenient forms of collaborations, and most importantly, reliably ensures the protection of the ownership rights.NFT technologies allow art world newcomers to earn on their projects without seeking offline platforms and middlemen. The popularity of special blockchain platforms, like Rarible and OpenSea, grows. Their operational principle is simple: artists exhibit their work and sell it, buyers purchase the ownership rights for unique art pieces while the platform earns on closed deals.
NFT technology attracts more and more art dealers. Currently, in the US, the platform NBA TopShot is gaining popularity. It looks like old-school albums with glued sportsmen images. Only now users buy NFT tokens that are linked to video clips of the best pitches and actions of the NBA basketball players. The platform is not limited to the video clips of NBA players. One can also purchase collective items from other fields of interest, gaming items, lottery tickets, postcards and other items. It is like a heaven for collectors that got tired of puffing away dust from their cards, stamps etc. The collectors as much as the artists are driven to blockchain platforms by the desire to own something unique and to become a part of a new movement.NTF technology solidifies its position in the computer games industry.
The game Aavegotchi gains momentum. It is the game where gamers collect unique aavegotchi ghosts, or aavegotchis, using tokens, and tokens bring profit at the major DeFi platform Aave. The more unique items are on the ghosts, the more unique and the more valuable it becomes. Even greater attention is drawn to Minecraft, the founders of which partnered with blockchain platform Coincheck and developed for the most popular game in the world the NFT tokens that are linked to gaming collectables.
“We are still in the early days of NFT technology. This era could be compared to the infancy of the World Web in the 1990s. Many called it a bubble but history shows its impact. Now NFT technologies are mostly used in the art and entertainment industries but in long term it will be applied way beyond that”, – suggests Utushkin.
Why are NFT tokens so popular?
According to experts, NFT technology has the potential to revolutionize the field of intellectual property rights. Most probably, the global adoption of NFT in everyday life will take a decade. But when it happens, the media sphere and art field will be transformed – it will be much easier to transfer and get ownership rights. For example, radio stations will get broadcast rights swiftly while streamers and bloggers will have an opportunity to legally broadcast video and audio in their videos.We are living in the digital era, the Internet age, when everything can be found online. Everything that can be found on the Internet can be saved and used, whether it is video, text or audio. Sometimes a creator of a digital object has no idea that her or his work is being used by dozens, hundreds and thousands of people while the saved copies are no different from the original.
NFT technology is capable of protecting the ownership rights of the original. The faster the copies are distributed, the more valuable becomes the original. If you own the original copy of the digital art piece, you will get all benefits for the ownership like the owner of Dali’s sculpture “Venus de Milo with Drawers” in comparison with the owners of its copies. Statues might look identical but they will be very different things. The transformations might go beyond intellectual property rights and get even into realty property rights. In the US, the first-ever case of linking NFT tokens to a 50% share of ownership for the residential house was registered. After the auction, the ownership rights will be transferred to the highest bidder. The opening price is 42.42 ETH ($74.23 thousand).
NFT technology allows linking digital and physical property to tokens. The tokenization simplifies all transactions that could be conducted with the property. From the look of it, after conquering the art field, the NFT technologies will capture the gaming industry and after time it will be developed into something really serious and useful for people.