The Power of NFT’s (Non-Fungible Tokens)

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By Jacob Maslow

Blockchain has changed a lot of things already, and as soon as we thought cryptocurrencies were here to stay, something new came and has a promising future. NFT or non-fungible token represents something unique and can’t be replaced. Some people say that they can take a screenshot of the piece they like and have it, but every single piece of a part of Ethereum blockchain.

It first overwhelmed the art industry with futuristic designs and overwhelming prices. But, everyone in the industry knows that it doesn’t have to apply only to art but also to other digital items like music. So, these two industries will be changed forever as long as crypto is here to stay.

What It Represents?

They are unique parts of the blockchain, like every single coin you main, but everything was changed after NFT artwork was sold for over $60 million. Digital artist Beeple was the first to make an art auction, and no one expected that it would reach almost $70 million in a few hours. Nevertheless, this was a collection of images sparked other designers and artists.

People see it as any other valuable item with sentimental or social value. So, you can compare it to Mona Lisa or any other painting. Furthermore, it’s straightforward to acquire one, so yours can be the next Mona Lisa if you have the proper exposure. Another exciting thing about it is that you can copy real-world locations or items and make them digital as an NFT.

How to Acquire It?

If you are already familiar with crypto and have invested in trusted bitcoin cloud mining sites or just bought it, you will need to convert it to Ethereum. This is important because the majority is bought and sold in Ethereum, and there are a few reasons for it.

One of the reasons is that it’s very easy to verify the ownership of the token because it’s open to the public. It’s also impossible to steal someone’s NFT once they acquire it. You will only be able to buy it from them. One of the benefits every owner has is that you can sell it independently without using any platform. This may cut any fees you will usually have to pay to make these transactions.

NFT and Music Industry

As soon as people realized that NFT doesn’t have to apply only to art but other digital items, people in the music industry saw the opportunity and took it pretty well. One of the reasons it becomes so appealing is that 90% of the income musicians get on the streaming platforms is going to the top 1% of artists.

So, musicians are now making groups and selling their NFT projects and songs, which provides more income than any platform. This is because they gain profits for every transaction related to their NFT. For example, famous artist Steve Aoki has $4 million in NFTs.

It won’t overtake the platforms because most digital pieces are meant for rare collectible music stored on a digital ledger. They are sold at auction, and there isn’t a limit to the price it can have. That’s why some of them reach millions of dollars.

NFT and Art Industry

NFT art is separated into two groups: non-generative and generative, but most of the online artworks are non-generative. For example, one of the pieces from the most expensive collection is the CryptoPunk $3100 that is sold for more than $7 million. On the other hand, generative type is referred to a specific algorithm.

The algorithm will use data like description, image, color, name, or similar information and create something new based on these elements. Some include Axie Infinity, Crypto Kitties, ChainFaces, and Autoglyphs. The most popular among them is Axie Infinity, a game where you can generate new NFT art and store it.

The art market has changed forever because of these new methods to create art, and it will influence the industry a lot. Large companies are getting involved and pushing the idea of having NFT as a classic piece of art. This means that there will be more opportunities for new artists and a lot of money already being generated.

Storing Art

You will rarely think about how art is preserved in museums and what are you looking at when you visit. Most of the pieces are clones because they don’t want someone to touch them or potentially damage them. That’s why most valuable details are stored in specialized safes with specific lighting, temperature, and humidity to create the perfect ambient to preserve them.

This way of saving items is costly, so digitalizing them is for sure the way of the future. Every single piece can be digitalized and held for far less money than they are spending now. They will have to do this at one point because every single item has its expiration date, even paper. So, they will save money and make more because of new monetization options.

Monetization Opportunity

One of the biggest reasons artists make double their salary with NFT is that they can bypass fees and dealers that would do the job for them. For example, a music artist would cut the costs by up to 90% because they wouldn’t need to pay the platform 50% of what the song makes.

One of the options is to have royalties whenever their work is resold, where they will receive 10% for every sale. It is a way to have passive income if they decide to take this option. It’s also similar to YouTube, where you can follow where the NFT came from and pay them directly.

One of the exciting ways to manage it is to rent it for a set period, giving exclusive rights to it for the next ten years. This is something that the museums will benefit from the most where they will pay for the time it is displayed.

Images Courtesy of DepositPhotos