ART NFTs, Crypto art, digital assets, and cryptocurrencies are still at the beginning.
Which market exists for Crypto art and NFTs?
NFTs have a great deal of promise for luxury and premium brands. Rich collectors and art enthusiasts frequently desire them. In contrast, the broad public of art enthusiasts is less knowledgeable about NFT than they are about other arts-related topics (paintings, sculpture). The majority of those interested in the art business, whether buying or selling, have heard of the phenomenon but have not yet had the chance to enter this market.
So what are NFTs, and why are they occasionally acquired for astronomical sums of money?
What are NFTs exactly?
Blockchain technology enabled the creation of NFTs. The vast majority of individuals are acquainted with blockchain technology through cryptocurrencies such as Bitcoin, Ethereum, and others.
"Non-fungible token" is synonymous with "non-exchangeable token," and in this context, "token" is synonymous with "asset." To create NFT artworks, artists scan their works or create them on the computer. The task is subsequently delivered to the appropriate marketplace and added to a blockchain.
Therefore, an NFT is a digital asset that cannot be traded and is unique. This differs from conventional currency and cryptocurrencies, which may be traded and are not unique. Everything has been going smoothly thus far, but why are so many NFTS so expensive?
Art has always been associated with luxury.
The true value of a non-fungible token, or the price paid for it, is determined only by the value assigned to it. Therefore, everything depends on the artist who created each NFT. Theoretically, it functions the same as traditional art: the more renowned the artist, the more expensive the work. Even prestigious fashion houses have adopted the NFT trend. Gucci, Louis Vuitton, Dolce & Gabbana, Givenchy, Burberry, Jimmy Choo, and Balmain are among the premium brands that have published NFT collections or collaborated with NFT artists.
For instance, the alliance between Dolce & Gabbana and the NFT marketplace UNXD generated considerable buzz. Collezione Genesi consisted of nine pieces, although only five were authentic. They were sold for a total of $6 million.
Who are the NFTs intended for?
First, not everyone can afford to purchase non-fiat currencies (NFTs). Also, NFTs cannot be purchased with standard currency. In lieu of that, you exchange them for bitcoins. To obtain an NFT, you must first purchase a digital currency such as Bitcoin or Ethereum, which may then be used to purchase the NFT.
Therefore, NFTs are mostly for crypto enthusiasts or people who are familiar with the digital world and have cash. NFTs are not as suitable for this purpose as conventional luxury items, which are frequently purchased for display. Consumer experts concur that the NFT sector is directed at the "patricians" demographic. This is evidenced by their unwillingness to flaunt their money in public and their preference for discreet luxury things.
Who should purchase NFTs?
By their very nature, cryptocurrencies are highly volatile, therefore the price of Bitcoin or Ethereum might fluctuate greatly. Therefore, every investment in digital currencies is a gamble and carries a degree of risk. Theoretically, nothing is new about NFTs, hence they should be utilized with some caution as an investment instrument. However, those who can afford it and have a broad interest in art can locate well-known artists' works that are worth examining more thoroughly.
The pursuit of Utility using NFTs 2.0 and WEB 3
Technically, the early NFTs were extremely simple. Crypto enthusiasts who were fascinated in their technology or admired their aesthetics purchased their first NFTs simply because they believed in it. While the first basic NFTs evolved into more complex and powerful "smart contracts," the technical foundation for NFTs enabled the incorporation of utility. "Utility" is a component that comes on top of ownership. Utility can be anything added to the ownership to make it more useful, and therefore create more value for it. For example, offering access to more material linked to the artwork (interview with the artist, making-of film), it can also be interactive (the ability to mix two NFTs and create new NFTs), and so much more. Some NFT collections, such as Bored Apes Yacht Club, employed NFTs as club memberships that granted members access to very exclusive events, concerts, or goods. Some argue that the true potential of non-fungible tokens rests in the utility they may provide; the possibilities are limitless!
Will the value of ART NFTs increase like physical art over time?
It is probable that over the next few years, NFTs created by famous and creative artists and well-known luxury companies will become increasingly valuable and can be traded like paintings or other works of art. Things such as cryptocurrency and non-fiat currencies are inevitable outgrowths of the analog world as it becomes increasingly digital. Therefore, it will be fascinating to observe the future of digital art and the development of the still-young NFT business over the next few years.