- 1 What is the meaning of the acronym NFT?
- 2 What does fungible mean?
- 3 What are tokens?
- 4 How do NFTs and crypto-art relate to blockchain technology and why is this technology so secure?
- 5 How are NFT digital files created and why is it called crypto-art?
- 6 Why do people buy NFTs and crypto-art?
- 7 What is the ethereum network?
- 8 Are NFTs and crypto-art harmful to the environment or do they have no environmental impact?
- 9 Which are the most expensive or most famous NFTs in the world?
- 10 Which are the best NFT?
- 11 Is it possible to find free NFT Examples?
- 12 What is the future of NFT and crypto-art? Are we facing a bubble?
What is the meaning of the acronym NFT?
NFTs and crypto-art stand for these three words: Non Fungible Token.
What does fungible mean?
The term fungible comes from the Latin fungi, to spend, and -ble, that is, that which is consumed with use.
Fungible goods are not only those that by nature are consumed but can be legally replaced by another of equal quality or value. For example, money. Or for example, a bottle of conyac. Unless the bottle is a unique edition of the particular brand that produces it, you can go down to the supermarket or the gas station next to your house and in 10 minutes you will have another one.
Non-fungible goods, on the other hand, have no equivalent exchange and cannot be consumed. They are unique and unrepeatable.
Works of art fit into this category of goods because they are original pieces that someone has made, regardless of whether they have done it with wood, bronze or gold, what is valuable is that they have done it with their own hands and it is different from the work that some other artist can do, or even from the work that the same artist can do any other day.
The original work is NOT replaceable and will never be like a bottle of conyac, which is mass-produced and industrially and usually does not have the least originality. Art has its own characteristics that make each piece unique.
What are tokens?
Tokens are units of value that are assigned to a business model, such as cryptocurrencies or casino chips.
Casino tokens could be considered tokens, since they have value to the people who are playing and to those who monitor and pay out. But what is the problem with casino tokens? They can be counterfeited, and in fact there are numerous cases of casino token counterfeiting.
Some of the features of tokens based on blockchain technology inherited from cryptocurrencies are their security, traceability and exemption from counterfeiting.
How do NFTs and crypto-art relate to blockchain technology and why is this technology so secure?
The authenticity that NFTs and crypto-art claim to be able to offer is based on Blockchain technology, a technology distributed by nodes or blocks where each of these blocks has a copy of the chain. It is a system that makes it very difficult to hack because, even if one of the blocks is attacked, the information is decentralized and remains anyway in the other blocks. In addition, it is a system that allows a consensual traceability or record, since all blocks share the same information and thus ensure their integrity.
As each block added to the chain makes the previous one unalterable, the information stored with this technology cannot be modified, lost or deleted.
Each node or block certifies and verifies the information, thus validating the transactions and data stored in the blockchain.
How are NFT digital files created and why is it called crypto-art?
NFT is based on blockchain technology, just like cryptocurrencies.
NFTs and crypto-art are created using a decentralized computer network, with blocks or nodes linked and secured using cryptography. Each block links to a previous block, as well as a date and transaction data, and by design, since as we have said each new block makes the previous one unalterable, they are resistant to data modification.
When an NFT is created, it is assigned a digital certificate of authenticity, a series of metadata that cannot be modified and verifies its identity. In addition, this system records both the amount of the first sale and all subsequent acquisitions and their value, as well as the authors or owners through whom the piece has passed.
An important detail in this new art buying and selling system is that the artists, for each new transaction made in the secondary market, charge a 10% commission. This rule is something that usually does not usually occur in physical works of art.
But returning to the issue of authenticity and the nature of these files, by the very effort to create a unique file, authenticated and certified by a chain of metadata, generates a new kind of assets in digital artworks, since these now have nothing to do with jpeg files, Tiff files or any other bitmap file that can be multiplied to infinity. Thus, NFT and crypto-art solve the problem that digital art had from the beginning: it did not have original works.
Why do people buy NFTs and crypto-art?
While many people who buy NFTs and crypto-art come from the Bitcoin investment sector, I’d like to think there will be many who like art as well. I think right now people buy NFTs for three reasons:
1- Future business opportunity. The boom in 2021 of NFTs and crypto art as a possible fruitful investment after the auction of Beeple’s painting for $69 million. This is surely the most compelling reason. They are in fashion, they are talked about and you have to be there.
2- The addiction of collecting. And seeing some of the series of works that are sold in the marketplaces makes you want to start acquiring and being part of some of these series.
3- The love of art and being able to participate in the art ecosystem. A third reason, which I personally would love to be the main one.
What is the ethereum network?
Ethereum is a decentralized open source platform that operates on Block Chain technology. Most NFTs or tokens are issued with the Ethereum network. Although, as we commented above, what they issue are unique works.
Are NFTs and crypto-art harmful to the environment or do they have no environmental impact?
According to this article in eldiario.es, the digital transactions – such as bidding or registering a sale – required to mint a single NFT consume 340 kwh of energy, which is equivalent to :
- The average consumption of a European in a month
- A two-hour flight
- The fuel needed to drive 1000 km in a car
- Boiling water in a kettle 4,500 times
- Using a laptop computer for 3 years or a desktop computer for 10 months.
According to NFT marketplace Binance, anything hosted via blockchain energy emits carbon:
“To issue NFTs and crypto-art requires large amounts of energy (considerable amount of heat, which equals carbon emissions) to carry out complex calculations through the use of advanced computers and specialized mining hardware.”
However, continuing the same argument made in Binance, many NFTs are created in a blockchain model that is not as energy intensive, the Proof-of-Stake (PoS) type, which apparently requires a more limited number of powerful nodes to run the network.
Ethereum 2.0 bets on energy efficiency
This Professional Review article discusses that the Open Source platform or software from which NFTs and crypto-art are issued, Ethereum, is evolving into a 2.0 phase in which expensive and power-hungry hardware is being left behind and consumption is being reduced to a minimal portion of current consumption through a consensus shift. We will now move to a simplified Proof of Stake system with validator nodes randomly assigned to create blocks.
If we add to the latter, which looks set to be implemented by the end of this year, the fact that we have not yet made a precise calculation of the cost of painting paintings in the traditional way, perhaps in ecological terms, even in the short term, the balance will shift towards crypto-art.
I say this last point because, every time we paint a picture, we have to count all the minerals extracted to create the oils, the plastics, the metals and the paints required for the tubes of the oils themselves, as well as the oils, turpentine or solvents, the trees for the brushes and the wood for the frames, not to mention the carbon footprint of shipping paintings to other provinces or other countries or, in the most notorious case, the carbon footprint of transporting many large works to international exhibitions.
Although the data exposed by eldiario.es are a bit disturbing, if this Ethereum technology improves I doubt that it will exceed the ecological impact of painting in oil or acrylic regularly on canvas and frame in large format and making frequent shipments and exhibitions by national and international territory. In general, we are looking to get better, not worse. So surely NFTs and cryptoart will overcome this stumbling block.
Which are the most expensive or most famous NFTs in the world?
According to this Blockchain Observatory article, artist Beeple (Mike Winklemann) has not only sold the most expensive NFT to date ($69 million) but three of the most expensive sales of NFTs on this list of ten are also by him.
He is an artist sensitive to the environment and social causes who has been chipping away at stone for many years, as he spent 13 years making a digital artwork daily.
Cryptopunks by Larva Labs
Among this list of the top ten best-selling NFTs we also found several images from the Cryptopunks series, from Matt Hall and John Watkinson’s Larva Labs studio. A series of 10,000 computer-generated characters or avatars based on templates. They are very simple graphics, with very few pixels, characterizing anti-systems, apes, zombies or even aliens.
Which are the best NFT?
Here there will be opinions for all tastes, as always in the art world, but as always I look at the artistic quality and what the works convey to me.
So, taking a look at the different platforms or marketplaces, some of the works that caught my attention at first sight were the Singularity and Explosion of Color series by the artist or Studio AIIV (opensea.io), milkformycoconut (makersplace.com), whom I already had under control on Instagram, the Artificial Organisms series by Zhestkov (superrare.com) or Machine Hallucinations by Refik Anadol (Nifty Gateway).
Is it possible to find free NFT Examples?
On the rarity.tools website you can find trending NFT projects. Some experts advise to follow these projects via Twitter, Discord or Reddit, and wait for NFT giveaways to be announced.
What is the future of NFT and crypto-art? Are we facing a bubble?
No one knows, but it is true that this year, after the sale of Beeple’s work for 69 million euros, many eyes have been interested in this new and shiny art sector.
According to this article from businessinsider, trading volumes of Non-fungible tokens reached over €9 billion in the third quarter of 2021, an increase of 704% over the previous 3 months, according to DappRadar in turn.
What is clear is that right now this market is completely booming.
I have been in the art world all my life and I am totally convinced that NFTs and crypto-art are here to stay, even if this trend will slow down a bit in the near future. It is the logical evolution of everything and, moreover, some of the work that can be seen on these platforms has quality and is very innovative.
However, I disagree with some of the discourses that are being heard lately, such as when it is said that all this means the democratization of art. It is true that it is very good that digital artists can sell original works and also charge 10% for each new sale that is made, but even if now there was a very strong boom and many artists have made money this year, nature and history tells us that in a short time, if it is not already happening, a few will live very well, a few others will live quite well, and a majority will live badly. That’s the way art is, it’s best to assume it.
Something interesting happening here is that the new buyers of NFTs and crypto-art come from the cryptocurrency world to some extent. That, on the one hand, may imply a lesser background or journey through the art world and a rather speculative interest. At the same time, it can be a very good thing in that it is an approach to a world that enlarges the soul and brings us closer to the spirit and the transcendent.
In other words, I hope that many people who approach art with an interest in investing will end up developing an artistic sensibility.
If you liked this article about NFTs and cryptoart and you want to start creating them in a crazy way, in this article I explain almost everything about the world of the graphic tablet.