Meaning of Non-Fungible Tokens: What is NFT Artwork?
Non-fungible tokens, commonly known as NFTs, have been causing a stir in the world of digital art lately. In 2021, the world as we know it has become increasingly digital. As such, it makes sense that arts and collectibles have taken a similar digital shape, such as in the form of cryptocurrencies, computer files, and NFTs – non-fungible tokens. But what is an NFT and how did it become so popular? Read on to learn everything you need to know about the new world of NFTs and the potential of NFT art.
What Is an NFT?
Non-fungible tokens, or NFTs, are a digital asset secured and verifiable via blockchain technology. Similar to cryptocurrencies like bitcoin and ethereum, NFTs are backed by a blockchain ledger, just a bit different. While cryptocurrencies are interchangeable and one can be easily exchanged for another, this isn’t the case with NFTs.
NFTs are instead used to create and store digital ownership rights and proof of authenticity for a variety of digital assets, including but not limited to art, collectibles, gaming and more. To ensure all details are recorded and stored accurately, the transfer of ownership and transaction of NFTs is done on the blockchain. There is no central authority involved in the verification and transaction of the tokens.
Buyers of NFTs have to set up cryptocurrency wallets and use a cryptocurrency like Ethereum to purchase the tokens. Through blockchain technology and smart contracts, these digital tokens are permanently (though this can be optional) linked to a work of digital art, making it a much safer way for digital creators to store and track ownership and royalty rights associated with their work.
Benefits of NFTs
NFTs have a few key benefits compared to other digital asset forms that make them an attractive option for both digital creators and buyers:
-
Proven Authenticity: As NFTs are based on blockchain technology, a publicly accessible digital ledger, this process makes it easier to prove ownership, which is why they have been gaining popularity in the world of digital art. The blockchain technology makes it possible to track and trace the ownership and history of every transaction made.
-
Safe Storage of Rights: Any creator who makes work digitally, such as digital art, can store the intellectual property and associated rights in a secure way on the blockchain through an NFT. Creators can also issue multiple copies of the same artwork, but the original NFT tokenized data remains the same, making it easier to compare works and ensure their validity.
-
Unique and Collectible Nature: Although NFTs are digital assets, each individual token is one-of-a-kind, creating a natural appeal for those looking to collect digital art.
What Is NFT Artwork?
NFT art is digital artwork that is tokenized or stored on the blockchain, allowing it to be tradable or collectible. Unlike traditional art, which is physically produced, NFT art is created digitally or can be digitized from existing artworks of non-digital art. This form of art is not limited by physical form, such as size or color, and is designed to be mostly collected, often hung on a wall.
Typically, each individual artwork is given an ID and linked to a blockchain token (NFT) before being sold on different blockchain-based marketplaces. Digital creators benefit from the blockchain-based system because they have easier ownership control over their art, while buyers of NFT art benefit from the unique nature and confirmation of authenticity of the art.
Different Platforms Used to Buy and Sell NFT Art
In the last few years, we have seen the growth of more platforms and marketplaces to buy and sell NFT art. Some of the more common ones used today include:
-
OpenSea: OpenSea is one of the largest and most popular marketplaces for buying, selling and exchanging any type of digital asset, including NFTs. They support a variety of blockchains, including Ethereum, Tether and Polkadot.
-
Nifty Gateway: Nifty Gateway was created with the intention of being the preferred place to buy, sell and collect digital art. They offer an easy way to browse and purchase the artwork, providing collectors with the satisfaction of owning a truly one-of-a-kind work of art.
-
DADA.nyc: DADA.nyc is a blockchain-based platform established in 2019 to connect buyers and sellers of digital art assets. They offer a variety of NFT art assets, including digital sculptures, illustrations, and assets used in games.
-
KnownOrigin: KnownOrigin is another marketplace that focuses on art, with a variety of digital artworks available, as well as several art-related activities and events.
Challenges Faced by NFT Holders
Although NFTs are gaining popularity, they come with some challenges. As these tokens are stored and exchanged on the blockchain, the holder of the token would need to have access to the private key to manage their tokens. This means that unless someone has access to it, the holder of the token could potentially lose this valuable digital asset or have difficultly passing it on to someone else.
Additionally, as with any technology, there are also risks of emerging malicious software or attacks that could affect the asset holder or the digital asset itself. As such, it is important for NFT buyers to research the asset and its associated risks thoroughly.
Non-fungible tokens, or NFTs, have become massively popular in the world of digital art and digital collectibles this past year. This digital asset is a much more secure way to store, track and transfer digital ownership rights. With the help of blockchain technology and smart contracts, these digital tokens can be permanently linked to a work of digital art, providing high security and proven authenticity of the art.
As the world of digital art continues to evolve, NFTs and NFT art are likely to be a major player in the space, especially for creators looking for a secure and efficient way to store, track and transfer ownership and royalty rights associated with their art. As always, it is important for buyers to research the asset and its associated risks thoroughly before investing.
