What is this current excitement around using Tech to sell digital art ?
Everything you need to know about NFT.
Do you remember when,Twitter co-founder Jack Dorsey sold his first ever tweet as an NFT for more than $2.9 million and the reactions that followed afterwards.
The tweet which said “ just setting up my twttr”, was first published on March 21, 2006. It was listed for sale as an NFT on March 6. By March 9, the highest offer was from sina Estavi, ceo of Bridge Oracle.
Everyone had something to say about it, from asking questions like “why would anyone pay so much for a tweet ? Regardless of the historical weight of the tweet, it could still be easily accessed, we could print it out, retweet it to our timeline or just go back to Jack’s twitter wall to take a screenshot. It made no sense to us in any way.
why are people willing to spend millions on something they could easily screenshot or download? Why spend so much money ?Are Africans jumping on this train?
What is the excitement about NFTs?
I will be breaking down the entire excitement around NFTs in this newsletter and also answering all your questions.
•Let’s take it from the top,
What Is an NFT?
An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.
How does it even work?
•Let’s break it down some more,
NFT stands for non-fungible token – a digital token that's a type of cryptocurrency, much like Bitcoin or Ethereum.
But unlike a standard coin in the Bitcoin blockchain, which is considered fungible — trade one for another bitcoin, and you’ll have exactly the same thing NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another (hence, non-fungible). Each NFT is unique and acts as a collector’s item that cant be duplicated, making them rare by design.
NFTs are typically held on the Ethereum blockchain,so they are individual tokens with extra information stored in them. That extra information is the important part, which allows them to take the form of art, music, video (and so on), in the form of JPGS, MP3s, virtual Avartars,videos, GIFs and more. Because they hold value, they can be bought and sold just like other types of art – and, like with physical art, the value is largely set by the market and by demand.
Why spend so much on NFTs ?
Although they’ve been around since 2014, NFTs are gaining notoriety now because they are becoming an increasingly popular way to buy and sell digital artwork. A staggering $174 million has been spent on NFTs since November 2017.
At this point, you might wondering why people are willing to spend so much on NFTS, from Twitter co-founder Jack Dorsey who sold his first ever tweet as an NFT for more than $2.9 million
Or,famous digital artist Mike Winklemann, better known as “Beeple” crafted a composite of 5,000 daily drawings to create perhaps the most famous NFT of the moment, “EVERYDAYS: The First 5000 Days,” which sold at Christie’s for a record-breaking $69.3 million.
People spend this much on NFTs because Nfts,are designed to give you something that can’t be copied: ownership of the work (though the artist can still retain the copyright and reproduction rights, just like with physical artwork).
An NFT allows the buyer to own the original item. Not only that, it contains built-in authentication, which serves as proof of ownership. Collectors value those “digital bragging rights” almost more than the item itself.
Can Art be the only way to earn from NFts? What about brands?
NFTs are an attractive revenue stream for brands, as shown by all the brands jumping on the bandwagon of late.
Art isn’t the only way to make money with NFTs. “Brands like Charmin and Taco Bell have auctioned off themed NFT art to raise funds for charity. Charmin dubbed its offering “NFTP” (non-fungible toilet paper), and Taco Bell’s NFT art sold out in minutes, with the highest bids coming in at 1.5 wrapped ether (WETH)—equal to $3,723.83 at time of writing”
What does the market place look like?
There are several marketplaces that have popped up around NFTs, which allow people to buy and sell. These include OpenSea, Rarible, and Grimes’ choice, Nifty Gateway, but there are plenty of others.
You could be an artist, a buyer or a collector, but the NFTs marketplace is a huge one.
Can anyone make NFTs ?
Technically, yes, everyone can sell an NFT. Anyone can create work, turn it into an NFT on the Blockchain (in a process called 'minting') Read more(reference)and put it up for sale on a marketplace of choice. You can even attach a commission to the file, which will pay you every time someone buys the piece – including resales. Much like when buying NFTs, you need to have a wallet set up, and it needs to be stuffed full of cryptocurrency.
How can I buy NFTs ?
If you’re keen to start your own NFT collection, you’ll need to acquire some key items:
First, you’ll need to get a digital wallet that allows you to store NFTs and cryptocurrencies. You’ll likely need to purchase some cryptocurrency, like Ether, depending on what currencies your NFT provider accepts. You can buy crypto using a credit card on platforms like Coinbase, Kraken, eToro and even PayPal and Robinhood now. You’ll then be able to move it from the exchange to your wallet of choice.
You’ll want to keep fees in mind as you research options. Most exchanges charge at least a percentage of your transaction when you buy crypto.
Focus on Africa
African art creators are leveraging the art world's shift to the digital world through NFTs. And they are increasing their net worth while they're at it. From Nigeria to Kenya, we have had active players in the emerging NFT market place. Nigerian Artist and entrepreneurs have been actively in the NFT scene for a while .
Nigerian pop artist Osinachi has sold paintings on Microsoft word for several thousand euros or the equivalent amount in ether, a cryptocurrency used to buy digital art.
As crypto currencies and Nfts have boomed, digital artist like Osinachi keep thriving, Nigerian NFT artist Osinachi incorporated social tokens during an event at Christie’s — marking the first time social tokens have been used at the art auction house.
At the event at Christie’s in London, Osinachi displayed five NFTs in the collection “Different Shades of Water,” also marking the first time an African artist displayed an NFT at Christie’s Europe.
The display included a unique monetary incentive aimed at viewers. If they shared pictures of the art on social media, they could earn $OSINA tokens via a scannable QR code. These social tokens will then be usable on the Socialstack CommunityOS Shop to purchase Osinachi’s NFTs, merchandise and other physical products.
Entrepreneur Uyi Omokaro was also an early believer in the potential of NFT in Nigeria.he launched Wearmasters, a platform to sell Africa-made NFT art.
Kenyan-based award-winning photographer and filmmaker, Rich Allela, did an auction for one of the continent’s first crypto art collections using non-fungible token (NFTs). His work is facilitated by Picha Images, a digital media company which launched one of the first crypto art NFTs on the continent.
The crypto art market is a growing one in Africa, there’s a boom with buyers, artist and collectors.
Are there any Risk involved?
It’s important to have some knowledge of the risks and challenges associated with the Non-fungible tokens, so that you can understand the market better and can buy or sell or create better NFT.
investing in NFTs is a largely personal decision. If you have money to spare, it may be worth considering, especially if a piece holds meaning for you.
•But keep in mind, an NFT’s value is based entirely on what someone else is willing to pay for it. Therefore, demand will drive the price rather than fundamental, technical or economic indicators, which typically influence stock prices and at least generally form the basis for investor demand.
All this means, an NFT may resale for less than you paid for it. Or you may not be able to resell it at all if no one wants it.
•NFTs are also subject to capital gains taxes—just like when you sell stocks at a profit.
•Fraud Risks:
Any type of market always has the risk of fraud. Though the digital market and Non Fungible Tokens are based on blockchain technology, which has high security and authentication technology, some hackers and cybercriminals may replicate the NFT tokens. Cybercriminals can copy an NFT token, and people can end up buying the fake NFT tokens, which practically do not have any value as an asset. So people should check the authentication of an NFT token before buying anything digitally.
•Legal and Regulatory Challenges:
Nonfungible tokens or NFT does not have any specific or official definition, and this market only depends on particular traits. Different countries like Japan, UK, and the EU have different approaches for the classification of NFTs. This raises the importance of having an international body of Non-fungible tokens for its better regulation and legalization. This market continues to grow, and this growing market needs a regulatory body for Non-fungible permits. But with this ever-increasing market, new Non-fungible tokens with new varieties also hit the market. This makes it a considerable challenge for the NFT market to have a regulatory body.
Make sure you do your research, understand the risks—including that you might lose all of your investing dollars—and if you decide to take the plunge, proceed with a healthy dose of caution.
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Wonderful how you broke down something seemingly complicated. Truly amazing piece
I know about NFT briefly before reading this, but honestly this has opened my mind to completely new dimension of understanding NFT and how it can be a game changer in the art world. It was a really educative piece which was explained in a simple , straight forward and engaging way.