A term that is being heard more and more in the online world of Digital Art is NFT or Non-Fungible Token, and the general reaction to it, at least initially, is often one of confusion and scepticism. What are NFTs? What do they do? Why are they valuable and how do you buy and sell them? And even when all these questions are answered, you may still be left scratching your head and wondering what all the fuss is about!
In simple terms, NFTs are a way of safeguarding the ownership rights of Digital Art by creating a unique digital signature or certificate using Blockchain technology (the same tech as behind cryptocurrency). This then allows artists to sell their work online to interested buyers and investors in a reliable and trustworthy manner. The artwork has a unique signature, and the ownership is clear and verifiable as the transactions are recorded on the Etherion Blockchain public ledger.
NFTs are not just for visual art. They can also be used for music, videos, games and other projects. Non-fungible simply means that they are unique assets owned by a specific person and not interchangeable. And importantly, the Blockchain is completely decentralized creating great flexibility and opportunities for artists to create and promote their work.
“NFTs are often mistaken as being just jpegs or Digital Art, but this does not do justice to them or the art. Digital Art was around a long time before NFTs, but it is the NFT which creates the commercial values (but not necessarily artistic value) for these art pieces,” says Eddie Au, Cofounder and CEO of ARTsBITE, a newly formed curated Digital Arts platform in Macau. “In the end, NFTs just enhance the ownership of digital assets and hence create a trading ecosystem. It is still the artists who create the art, digital or physical.”
“NFT’s are an amazing, crazy, wonderful step into the future which is so often just not understood. Once people really understand what NFTs can achieve for the future of technology in the world, it’s going to get even more fun,” enthuses Asher Carbonel, an adviser and project manager operating in the ground-breaking world of Web3.0. “In a world where everything is going digital, NFTs have the ability and potential to be more valuable than traditional art. I don’t think they will ever replace traditional art, but they will only become more and more valuable.”
“We think that NFTs are the future. Art doesn’t have to be seen in one place or be physical, these are the possibilities that NFTs give us,” says Digital Artist Ao Chon Hin. “The most important thing about art is to let the public know about it, which is what we have always wanted to do and the NFT craze has made it possible for more people to understand and buy artworks, which is interesting and fun.”
“Personally, I keep an open mind about NFTs because there are a lot of NFT projects coming out every day,” observes Digital Artist Os Wei. “Basically everyone can digitise their own work into an NFT, but the value of NFTs is really in the collective consciousness.”
“I think that NFTs are still a very preliminary concept, but of course there are many well-known artists who have released their NFTs, and this is what is known as the “buzz”, because there is a limited number of them. For example, after 888 pieces have been sold, they will not be released again,” he adds.
Indeed one of the advantages of NFTs is that they can help generate interest in an artist’s work online by creating excitement or “buzz” around a project. The more hype around the release of artwork, the more valuable the NFT for that piece is likely to be.
“For an NFT to be valuable, there needs to be a solid community, fanbase and ecosystem behind it,” explains Asher. “What sort of collaboration or connections are being done around it?”
The value can also be affected by the number of NFTs issued for a project, with many having a limited cap. And some NFTs can also have a utility associated with them like a ticket or pass providing exclusive access to events or brands.
There have been some very notable success stories in the world of NFTs in the past couple of years. The mysterious artist known only as Pak generated US$91.8 million in sales in 2021 with their NFT entitled Merge, becoming one of the most expensive non-fungible tokens. American digital artist Michael Joseph Winkelmann better known as Beeple, gained worldwide fame when his work Everydays: the First 5000 Days was sold as an NFT for US$69 million.
“For the artists, NFTs are a way for them to solidify their name and share their art on a global scale. For the buyers there is the potential to make money easily from selling the NFTs and of course to show without a doubt they are the true proud owner of that piece of art,” says Asher.
“NFTs have opened the door for the trading of Digital Art, and there’s no geographic limitations, which is something Macau artists should try to take advantage of in the long term,” Eddie comments.
“The level of awareness of NFTs in the Macau market is still very low,” notes Os Wei. “But this is definitely a new way for Macau artists to get their work known to a wider audience. It’s like an artist’s business card. It’s a way to let the world know about the different creators in Macau. The biggest advantage of NFTs for artists and collectors is that it is decentralised, so that people can buy without having to go through auctions or galleries and through social media, we can communicate with a large number of people.”
Of course, like any market or investment, there are risks.
“If you are buying an NFT to simply support the artwork or the artist, there is no problem at all. But if it’s a financial investment I would advise caution,” offers Os Wei.
“NFTs are full of risks because 98% currently rely on a successful project for the art itself to do well, and not enough people are appreciating the art itself,” adds Asher.
In other words, like so many things on the Internet and social media, an effective campaign to create hype behind the product is crucial.
The recent crash in the Crypto market also caused some jitters.
“NFTs at this stage are still mostly speculation, and after the recent crash, the short term outlook is rather bleak, but the market will only get healthier. With Web3.0 still expected to explode in a couple of years, we do believe NFTs are potentially valuable,” comments Eddie.
Morons by Bansky
>>> In an effort to help local artists better understand and capitalise on the potential of Digital Art and NFTs, Eddie Lau and Manuel C.S have recently founded ARTsBITE. The stated mission is to promote and develop NFTs as artistic digital assets throught curatorship and marketing.
“With ARTsBITE, we want to create a space to showcase artists’ works and help them trade. We opted to be a curated platform to avoid speculation and also to reinforce the quality of work, but in the long term, we believe with the decentralized nature of Web3.0, users will become educated and experienced enough to take full control,” says co-founder and CEO Eddie Lau.
Co-founder Manuel C.S. explains: “Blockchain works on the web so it opens up much bigger markets that are not limited to Macau. Hopefully local artists here can actually reach out to people and an industry that goes beyond the borders of Macau. That’s maybe the biggest opportunity I see here and I think ARTsBITE can do its best in promoting and creating awareness of the content coming out of Macau.”
The organisation is also collaborating with Oxfam in Macau and Hong Kong in their “NFTs AGAINST POVERTY” project.
The goal is to create an event where the community can come together to help those in need at a moment in time where our lives have been strongly impacted by the COVID 19 pandemic by bringing art and technology together in order to explore new ways to innovate. The project, set to be launched in November this year, starts with 10 charity/poverty stories provided by Oxfam that will serve as inspiration for the artists. A careful curatorship will bring together a group of local artists that can better explore the full potential of the theme and its application to the NFT technology. All artworks will be minted as NFTs and sold on the ARTsBITE platform, with revenues donated to Oxfam.
“I always wanted to do something for charity, and with all the money trading in NFTs, I thought, why not channel some of these into charity. The Oxfam event will only be the beginning of something long term and substantial I hope,” notes Eddie.
