Art has long been a cherished form of human expression.
The advent of blockchain technology has led to a new era in the art world.
Non-Fungible Tokens or NFTs have captivated the imagination of artists, collectors, and enthusiasts, and has the potential to revolutionize the art market in unprecedented ways.
Revenue in the NFT market is projected to reach US$1,601.00m by the end of 2023 growing at a CAGR of 18.55% year-on-year resulting in a projected total of US$3,162.00m by 2027.
Do you know, the average revenue per user in the NFT market amounts to US$114.80 in 2023? From a global comparison perspective, it is shown that the highest revenue is reached in the United States – US$781,900.00k in 2023.
Check this out. In the NFT market, the number of users is expected to reach 19.31 millions users by 2027.
In this post, we will explore the intersection of NFTs and art, and delve into how this digital revolution can transform the way we create, buy, and sell artwork.
What is blockchain?
Before getting into the details around NFTs, let’s talk about blockchains. If you’ve been paying attention to the internet during this time, then you probably might have heard of cryptocurrencies. Cryptocurrencies are one of the technologies that are enabled by the blockchain. So, what is the blockchain, you might wonder.
Blockchain is a decentralized and distributed digital ledger that records transactions across multiple computers or nodes. It is a transparent and immutable record of all the transactions or data entries that have occurred within a particular network. The word immutable is key here.
Think of it as a chain of blocks (hence the name). Each block represents a set of information and are linked together in a chronological order. Once added, a block becomes permanent and cannot be altered. This is what makes blockchain technology so valuable, especially for things like decentralized currencies (cryptocurrencies, for example) and NFTs. Now, we could go into more details about how blockchains work, but that is beyond the scope of a single post.
Non Fungible Tokens (NFTs)
Now that we’ve gone through what blockchains are, let’s talk about Non-fungible tokens, or NFTs. NFTs are unique digital assets that exist on a blockchain and are, by nature, non-fungible. This is where most people are lost, so let’s try to explain what fungibility implies. To understand it better, consider a cryptocurrency, like bitcoin. Bitcoins also exist in a blockchain, and can be exchanged on a one-to-one basis.
A single bitcoin is equivalent to another. This is what it means to be fungible. NFTs, however, are unique assets. One NFT might look like another, but because of how they are produced, will only be identical to itself. This means that it is non-fungible. That is the basics of NFT.
So, what are the key characteristics of NFT art?
- Uniqueness – Since NFTs are created with unique identifiers, each NFT is different from the other. This means that buyers can have unique ownership of an art piece or a collectible.
- Ownership and authenticity – Because NFTs use blockchain technology, the ownership and authenticity of an artwork cannot be tampered with. The blockchain records the ownership history and transaction details of each NFT, providing transparency and verifiability.
- Scarcity and Rarity – NFTs allow artists to create limited art pieces, thus creating a sense of scarcity and rarity. This attribute adds value and desirability to certain NFTs, especially in the realm of digital art and collectibles.
- Interoperability – One of the great features of NFTs is interoperability. This means that an NFT asset isn’t limited to a single platform or marketplace, but can be transferred across platforms that are compatible. This interoperability allows users to buy, sell, or trade NFTs in different marketplaces, expanding their reach and liquidity. This can be particularly useful in a metaverse.
- Programmability – NFTs have another unique feature, and that is programmability. NFTs can incorporate programmable logic, enabling additional functionalities. Smart contracts, which is one of the building blocks for the metaverse, can be attached to NFTs, specifying rules for royalties, secondary sales, or interactive experiences tied to the ownership of the NFT.