The dope on everything you ever wanted to know about the million-dollar NFT craze, but were afraid to ask
A handout image, courtesy Christie’s, shows a digital art collage by Beeple. It was sold for $69 million to a buyer named as a crypto asset investor known by the pseudonym “Metakovan. PIC/AFP
What is an NFT?
NFT stands for Non-Fungible Token. It is a token that represents a unique asset, in most cases artwork. The NFT token serves as a verifiable proof that the object in question is authentic and this can be verified using the blockchain network. While NFT is used for digital artwork, there are few instances where it is used to represent the ownership of a physical.
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An artwork created by the columnist on Rarible
Why is it important?
NFT lends authenticity and rarity to digital art, which brings digital art closer to physical artworks. It is also gaining momentum because, recently, Christie’s, a major auction house, became the first to sell purely digital pieces of art by artist Mike Winkelmann, aka Beeple. The collection, called the First 5,000, comprises artworks created by the artist every day for the past 5,000 days. Each artwork from that collection is being sold at upwards of $5,000 right now, with some worth more than others. Kings of Leon also became the first band this week to release an entire music album on NFT. This, according to some experts, is just the beginning of an art revolution.
Beeple, aka Mike Winkleman
Controversies
Like any art, this one comes with its own share of controversies. The biggest one is the environmental impact of crypto art. Bitcoin mining alone generates approximately 37 million tons of CO2 every year just to generate and keep the records of all the coins. The environmental impact for Ethereum (ETH) is also similar and since most crypto uses ETH, the impact is further compounded. There is also the problem of cost related to making NFTs. Gas fees or the transaction costs of transferring cryptos are huge on Ethereum. This can vary from a few dollars to $500-600 which means it may cost artists dearly to get in on this trend. While Ethereum-based NFTs are the most prolific right now, there are newer eco-friendly and cheaper ways to create NFT artworks on the horizon. This would not only allow budding artists to make their mark, but also help justify the validity of the NFT revolution. One such project is KodaDot (nft.kodadot.xyz) which lets users upload and sell their art for free.
How to make your own
The easiest way to make your NFT is by going to Rarible. The site has a menu of options to help you make your first crypto. You do, however, need a crypto wallet—MetaMask (metamask.io) works best and you need some Ethereum, which you will need to buy at an exchange like WazirX (https://bit.ly/smdwazirx) and then transfer to your MetaMask wallet. You need some original artwork that you have created. It can be an animation, a still, or any other form. Register at Rarible. Click on create. Select single or collection, then upload the image, video or animation, set the price, royalties and description. Then, create item. You need approximately $100 worth of Ethereum to create a single token on Rarible. Here is a link to a Non-Fungible Token I created on Rarible (https://bit.ly/smdnft).
What are the chances of making money in digital art?
The chances of making money by selling NFT are slim to none. You need to be a celebrity, an influencer or a real artist to make any sort of money. Lindsey Lohan, Grimes, rapper Azealia Banks and Rick and Morty artist Justin Roiland are some of the celebrities that have had success selling NFTs. While creating might not be the best way to make money with NFTs, you can always invest in the art. The right art piece can increase in value overnight.
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