How do NFTs solve the problem of digital artwork ownership?
Before the stupendous rise of NFTs, the concepts of actual digital artwork ownership and scarcity were non-existent. Digital artists truly faced many problems in their work and efforts in an increasingly digital world. Frequently they would find to have had their art re-published with no credits, and used where royalties would be rightfully due. The same problems apply to real-world works of art, although things are a bit more simple when it comes to determining their authenticity. A photocopy of a Vincent van Gogh painting is clearly distinguishable from an original hanging in a museum.
Before we get into the details of how NFTs solve the problem of digital artwork ownership we need to have at least a slight understanding of how they work and are used.
What is an NFT?
NFTs, or Non-fungible tokens are tokenized blockchain-based assets that can represent a physical or virtual object of underlying value. They come from the same realm as cryptocurrencies but with some slight differences. As opposed to fungible assets like Bitcoin, each NFT is unique, authentic, and cannot be replicated or interchanged with another. NFTs have been used to not only represent digital art but real estate and in-game items. You can read more about interesting NFT use cases here.
How do NFTs work?
As a digital artist, it is very easy to create an NFT. The simplest path to go by is to use one of the several NFT Marketplaces that allow you to mint or create an NFT for a small fee in cryptocurrency. You can read more about NFT marketplaces here and how to create and sell an NFT here. Although you can mint an NFT out of anything, to experience success as an artist in the industry, you’ll need to be at least a little renowned and integrated with NFT communities and the scene in general.
Overall, the process is quite simple. Due to the technical and blockchain structure of NFTs, metadata can be added to them in the process of asset tokenization. This metadata can include anything from a little bit of text explaining the NFT and underlying asset, a small clip, perhaps legal documents, or an extra image. The potential here is really unlimited since NFTs can be used to represent a vast amount of assets.
NFT technology allows digital artists to preprogram royalty conditions into their work. This means that artists will earn money on every resale event of their NFT. This is extraordinarily beneficial in that it also allows artists to have to rely on bureaucracy and middlemen when monetizing their work or selling it to a collector.
How do they solve the problem?
While digital art constitutes the biggest chunk of the NFT market, the nature of the technology allows for near limitless experimentation in what an NFT can represent. Movies, concerts, movies, tickets, sports events, education, to name just a few growing NFT categories are all benefiting from blockchain based proof of ownership and authenticity.
Because blockchains are publicly accessible and immutable digital ledgers, one can view the entire transfer history of a specific NFT. We can see who created an NFT, who purchased it, who held it for how long, and the value at which the transaction occurred. This makes things very transparent in terms of ownership.
For instance, musicians, filmmakers, adult entertainers, and writers can create and distribute their authentic content to true supporters nearly instantly. Sporting events like the UFC could create unique events, immortalize them via minting NFTs and auction them to loyal supporters.
Or how about the great departure from how original art was exchanged and collected in the past? When collectors and investors would simply store art away in storage, out of sight and barely in mind, waiting for its value to go up.
Although anyone can photograph a Mona Lisa in the museum, true collectors would still consider paying an exorbitant amount of money to own a quality work of art in its original form. And the tech allows for this exchange to happen instantly.
Wrapping things up.
NFTs have kickstarted a digital ownership trend that will only continue to get stronger as various elements of the industry improve. Never before have artists had the tools they need in order to monetize their work and always be able to prove its authenticity. The earnings potential for high-quality work is magnified due to the global reach that NFT technology allows to achieve.
If you’re a content creator right now is the best time for you to dive into NFTs and experience how they can benefit you!
Just contact us here and we’ll help you get started.