NFT art (aka crypto art) has taken off in the last few months, as creatives in all mediums, including music and sport, look for extra income streams. It's a way for superfans to truly prove their status, but it's not without drawbacks.
If you're an artist or musician that's looking to sell NFT art, or just wondering what NFT stands for, then we've put together a guide to get you up to speed. It's looking like NFT art is here to stay, so if you're looking to enter the market, here are some things you need to know.
What is NFT art?
NFT stands for Non-Fungible Token, which is a way of authenticating originality and ownership. The token is authenticated by blockchain technology, the same technology that drives cryptocurrencies. They've been around for a while, but this year has seen them seriously take off - not just in the art world, but in music and sports collecting as well.
NFT art is a way for artists and fans to establish a more formalised relationship. The blockchain verifies your ownership of a piece of art, and in many cases, it's a 1 of 1 piece that's being sold. While other people might be able to enjoy that art - you're the one that holds the certificate of authenticity. It's a way for digital artists to receive real value for their work, in a way that might not have been previously possible.
How do I create NFT art?
To create an NFT, you first have to set up a wallet to store your crypto/NFTs. There are different websites to do this, like OpenSea, Rarible and Mintable, each with their own benefits. You then need to set up an account, and start minting your NFTs. There are no fees for creating NFTs - it's only when you go to sell them that you'll incur gas (transaction) fees.
Gas fees are a way of creating a contract for your wallet, and they authenticate your presence on the Ethereum blockchain. If you don't have any Ethereum, you'll need to purchase some via a reputable seller, in order to be able to post your NFT for sale. This guide from OpenSea is a great resource if you're looking to get involved.
French Concession, a Sydney-based producer/singer-songwriter, first heard about NFTs in late 2020, after seeing digital artists on Instagram selling their works. She's recently minted her first NFT, Soft Control, and while she says the process was simple, she was surprised by the fee involved.
"When people make an offer on an art piece, they should keep in mind that the artist has already paid a considerable amount to mint their art. Expensive GAS prices may drive up the price of digital art because the artist has to recoup this considerable expense (up to USD100/work to mint). Then there are additional GAS fees for each transaction eg. bidding, selling the work... Hopefully in the long run these fees come down."
Who are some musicians that have been creating NFT art?
Kings Of Leon became one of the first bands to release their album as an NFT. While they've released their new album When You See Yourself on all the traditional platforms, they've also released three types of tokens as part of a series called NFT Yourself.
Speaking to Rolling Stone, people involved in the project explained that there are perks like a special album package, live show perks and audiovisual art up for grabs. They also estimated that the revenue was about $2 million, with $600,000 going to the Crew Nation Fund to support live music crews affected by the pandemic. You can view everything that's up for grabs here.
There's a divide between artists with crypto-savvy audiences and those with more mainstream ones. DJ 3LAU is big in the crypto world, so when he put up 33 NFTs to celebrate the 3rd anniversary of his Ultraviolet album, he raises more than $11 million in 24 hours. Speaking to Forbes, 3LAU had a response to critics, saying, “They’re saying, ‘Why is this digital art going for this much money? I could copy that.’ Well, I could copy the Mona Lisa and put it on my wall. That doesn’t mean I own the original.”
On the other hand, Kings Of Leon experienced some issues with their NFT auctions, saying in a statement, "Breaking new ground is never easy…. if it were, it wouldn’t be groundbreaking. Many fans are first-time NFT buyers and are experiencing a learning curve. WE HEAR YOU and are going to extend the NFT YOURSELF Collection for an additional 24 hours, in hopes that more time allows more fans to participate in this historic offering." Time will tell how different fanbases adapt to the NFT craze.
Other artists that have recently put up NFTs for sale include Flume, Grimes, PNAU and more. Flume recently teamed up with visual artist Jonathan Zawada for the first in a series of drops, which you can view below. The piece, Saccade, is truly mesmerising - which might explain why it ended up going for $51,103.91. It's a 1 of 1 piece, and was accompanied by an ambient track produced by Flume, which the winning bidder (which, as it turns out, is Grimes) received as an MP3 and WAV.
Meanwhile, PNAU recently teamed up with Nicholas Keays for a piece of art, which included "previously unavailable MIDI parts to PNAU’s 4x platinum single Go Bang". Given the amount of content that artists have in the vault, so to speak, there really is no telling how much could be released through the medium of NFT art.
Crypto art community - the countdown is on! Auctions for our genesis #NFT collection w/ @NicholasKeays1 are going live today - 10AM Sunday Feb 28 AEDT / Saturday Feb 27 3PM PST on @makersplaceco 🙌https://t.co/j3eXZQbgp0
— PNAU (@pnau) February 27, 2021
Musicians are seeing the opportunity to team up with digital artists to create NFT art, benefiting them both. At the moment, it appears that bigger artists are much more able to wear the costs associated with minting NFT art, so there definitely is a risk of smaller artists becoming priced out of the market.
Speaking about the future of NFT art for smaller creators, French Concession says that the market won't be going away. "It is really hard to say whether this is sustainable or not, as the digital market is still a new one. I think as the market becomes normalised, the interest might die down a bit, and competition will increase.
It will become harder and harder to stand out from the crowd, so quality and developing a style is key. But it is definitely another income opportunity for artists and the market is here to stay."
But what about the impact on the environment?
Great question. This is where things get murky. Bitcoin mining generates 37 million tonnes of carbon dioxide each year, and it's looking like NFTs might be even worse. Speaking to Gizmodo, artist Joanie Lemercier and other activists recently calculated that Grimes' NFT drop resulted in 122 tons of carbon dioxide. Clearly, something is amiss.
It's not the artists' fault - but rather, the algorithms that blockchain networks use. Proof of Work (PoW) calculators are the way that new blocks are added to blockchains. Around the world, computers compete to solve a puzzle. Whichever computer solves it first completes a transaction (getting some cryptocurrency in the process) while the others essentially waste energy, as they've been running for nothing.
Proof of stake mining is a way to solve this issue, with ETH 2.0 promising a change from proof of work to proof of stake. This would involve a lottery where one computer is selected to solve the puzzle, rather than all of them working at once. The only problem is, this has been promised since 2014 - so naturally, people have become sceptical. There's also the issue of miners who have more coins being given a better shot at getting rewarded, so while the climate effects may be somewhat alleviated, the system may become more unequal, which goes against the philosophy of cryptocurrency.
If you're looking to create NFT art, it's important to be aware of the pros and cons. It's definitely a good marketing opportunity, and there is serious potential for it to create a more even playing field for smaller creators to earn real money from their work.
However, the environmental impact can't be ignored, and the costs involved before a sale is ever made will undoubtedly price smaller artists out of the market. Many of the same issues with cryptocurrency are present in the NFT art world, and only time will tell if these issues are able to be resolved.