NFT, these three letters have been part of our daily life since 2022. The general public generally associates these “Non-Fungible Tokens” as being artistic, ignoring the other use cases of NFTs. This new art form provoked extreme reactions. NFT fans try to evangelize art purists, who are very reluctant to do anything that does not correspond to the classical codes of art. Still, NFTs have a lot of appeal for artists and collectors, although, as with any new technology, there are also downsides.
Basic concept
The Larousse dictionary finally gives in its 2023 edition a definition for NFTs : Non Fungible Token. It is a “non-reproducible and tamper-proof digital file representing a unique asset, virtual or physical object (work of art, tweet, piece of music, etc.), listed in a blockchain and to which is associated a digital certificate of ‘authenticity and ownership’. The NFT is a digital receipt recorded in a blockchain, a sort of large decentralized computer register that can be consulted online. Once registered in this register, in theory, your title deed cannot be erased or modified, which makes it tamper-proof and inviolable.
How do NFTs represent an opportunity for artists?
Very quickly, artists understood the multiple interests that NFTs can offer them:
- Monetize creations that could not be monetized before, such as ephemeral art or street art.
- Protecting against plagiarism, by timestamping the work on the date of registration on the blockchain, it is thus possible to “authenticate” a digital file and make it unique, thus giving it a certificate of authenticity that cannot be forged.
- Accompanying a physical work the NFT then serves as a certificate of authenticity.
- Facilitate the movement of works by solving technical problems encountered by artists. Indeed, with NFT, transport costs and the risk of deterioration of the works do not exist.
- Immediate and worldwide visibility, with the possibility of entering directly into contact with its public.
- Contrary to classical art, there may be a system of royalties (a sort of commission paid to the artist on each resale of the work) which allows the artist to also benefit from increases in his price at the resale.
- Improve and increase revenue for creators. NFTs reduce the number of intermediaries to the end customer. Indeed for a work of art (sculpture or painting) an art gallery generally takes a commission of 50% of the amount of the sale.
- Increase notoriety. Unknown artists have gained great notoriety in a very short time thanks to NFTs.
- Reduce creation costs, sometimes even to zero.
- Anyone can invest in NFTs without restrictions. Blockchain is a technology open-source which anyone can join to create, sell and buy NFTs. This facilitates the transfer of assets.
Disadvantages of NFTs
NFTs are attacked from all sides:
- Many artists, art galleries and collectors shun NFTs. The majority consider it absurd that some people can buy an image of a Bored APE monkey for a fortune.
- Moreover, the NFT market has noticeably reversed in 2022. Despite the efforts made by the media, the percentage of people who know about NFTs is still low. As a result, it can be difficult to immediately find a buyer or seller when trying to trade NFTs. This has contributed to the drop in value of NFTs.
- There is a copyright problem, nothing prevents an illustrious stranger from creating an NFT from photos or videos published on social networks belonging to another person. He then becomes the owner of a document of which he is not the creator. (cf. case of Emily Ratajkowski’s NFT).
- They are often associated with frauds and scams.
- Indeed, buyers appreciate having advantages offered with the purchase of their
- NFT, such as having access to private events.
Conclusion
The artistic NFT market brings many benefits to artists, but on the side of investors, many points remain a barrier to investment. Whether due to market volatility or the increasing number of frauds in this ecosystem. The market is still young and evolving, it will probably still take time before it competes with the traditional art market.
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