Welcome to FineArt where we bring you some of the freshest NFTs on the market. Educate and invest in your first digital masterpiece.
What is an NFT?
A non fungible token, or NFT, is a unique token living on a blockchain that represents (or points to) some other data, like an image or video. Because they live on a blockchain, NFTs are easy to track. This tracking allows for verification of their authenticity as well as their past history and owners. Formally, NFTs are smart contracts that people interact with by calling them and then receiving proof of interaction.
Non-fungible tokens are, in a way, a lot like cryptocurrency. The record of their existence lives on blockchains, they can be bought and sold using cryptocurrency, and there isn’t necessarily a physical asset that ties them to the real world.
NFTs differ from cryptocurrency in that they’re non-fungible, meaning they can’t be exchanged for an identical item. Cash, for example, is a fungible asset: Each dollar may be unique, but the particular dollar you have doesn’t matter. If you swap a $10 bill for two five-dollar ones, you still have $10. Trade your $10 for an autographed baseball card, however, and you then have a non-fungible item: it’s unique, and while it may have a monetary value, it isn’t itself a trade commodity.
One unique aspect of NFT-based art that doesn’t really exist in the offline art world is the ability to profit from the secondary market. Offline, once you sell your artwork, it’s gone. You don’t really get anything from it if and when it resells for more.
In the crypto world, however, you can set up a fee (usually between 5 and 10 percent) that you get each time someone resells your work. That’s right — you get paid for each resell! So, if you sell your original work for a dollar and then someone resells it for $1 million in 10 years, you can still get $100,000 from it.
This feature alone is the single best reason why NFTs are great for content creators. It allows them to focus on making art without as much concern for its initial sale price. If their works become popular, they can start earning significant sums just from the secondary market in the future.
Because NFTs are a relatively new investment, there’s still a lot to learn about them. In addition, it can be tough to put a price on digital art, which can make NFTs an incredibly risky investment. When you invest in stocks, the stock price is how much the investment is worth.
There are three key factors to finding a winning NFT.
Rare. It’s no use buying a digital art piece if the artist plans to distribute infinite copies elsewhere. Instead, focus on artists and organizations like the NBA that have mastered the art of creating limited quantities of collectibles.
High quality. Some collectibles are worth more than others. The web URL “sex.crypto” is worth several thousand times more than the less-engaging “blockchainjobs.eth” URL. The same holds for digital art.
Undervalued. NFT mispricings happen often. But keen talent scouts can also spot works by artists or sports players who will eventually become superstars.
Many NFTs (like any collectible) are not worth much, so it takes discipline to keep saying “no” until an NFT comes along that ticks all three boxes.
NFTs can be bought on a variety of platforms, and which you choose will depend on what it is you want to buy (for example, if you want to buy baseball cards you’re best heading to a site like digitaltradingcards, but other marketplaces sell more generalized pieces). You’ll need a wallet specific to the platform you’re buying on and you’ll need to fill that wallet with cryptocurrency. As the sale of Beeple’s Everydays – The first 5000 days at Christies (above) proved, some pieces are beginning to hit more mainstream auction houses, too, so these also are worth watching out for. In case you missed it, that Beeple piece was the one that went for $69.3 million.
Because of the high demand of many types of NFT, they are often released as ‘drops’ (much like in events, when batches of tickets are often released at different times). This means a frenzied rush of eager buyers when the drop starts, so you’ll need to be registered and have your wallet topped up ahead of time.
Technically, yes, everyone can sell an NFT. Anyone can create work, turn it into an NFT on the Blockchain (in a process called ‘minting’) 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. And this requirement for money upfront is where the complications lie.
The hidden fees can be prohibitively astronomical, with sites charging a ‘gas’ fee for every sale (the price for the energy it takes to complete the transaction), alongside a fee for selling and buying. You also need to take in account conversion fees and fluctuations in price depending on the time of day. All this means that the fees can often add up to a lot more than the price you get for selling the NFT. But different sites have different fees attached, and some are better than others so it’s worth doing your research.
Whether or not NFTs are here to stay, they have certainly become a new plaything for the uber-rich and there is real money to be made, if you can make it happen. NFTs give new meaning to digital art, and the prices seen at sale indicate it is a real part of the future of art, and collectibles in general.