This article looks at two of the key differences between traditional art and digital NFT art collections.
“NFTs are a scam and will cease to exist in a few years” – traditional art collectors
Let’s start off by saying, I understand why people who have not looked into NFTs could think they are a scam. There have been scams and there will be more in the future. This is a normal problem for any marketplace. This is caused by bad people looking to take advantage of good people.
There are NFT scams, but you need to try to separate the problem.
(A) Scammers within a market (2) The whole market being a scam.
NFTs as Digital Art
NFTs are amazing. NFTs are one of the most transformational things to happen in our lifetime and I urge you to research them further to see what is happening in the NFT space. They will allow artists to connect directly with their communities, they will disrupt hedge funds, music labels, Spotify, Netflix and so much more!! NFTs will allow “the people” to own everything and do anything.
This is because artists will be able to fund their art collections by going straight to their fans. They will not need to go through a business to launch their album – that will take 80% of their revenue – this is going to shake up the music industry and art industry forever! Artists will have more control, freedom and more independence.
For this article, we want to only think of an NFT as a digital piece of art. To help traditional artists understand the value of digital artwork and the importance of verified ownership. NFTs are so much more, but let’s keep it simple to start because there is a lot to unpack.
NFTs are young. The NFT industry is young. 95% of developers and artists are new to this space, and the space is so new that the infrastructure is being built before our eyes. There is a large opportunity for artists / developers / brands to get ahead of their competition by stepping into the NFT arena.
There are 12-year-olds making more money than most people in the world. This is because NFTs are an emerging technology and there are developers / artists spending all of their time and resources on building digital art. It’s not a flex to buy a Lamborghini anymore, its a flex to have a CryptoPunk or a CyberKong. How many people can see you flexing your Lambo, a few hundred a day? Well, millions of people can see your NFT daily and know that you are the owner.
You are not late. If you are reading this before 2023 then you are likely still pretty early to NFTs.
NFTs are still risky, but for other reasons. You need to do research, make sure the project you buy is verified, join communities, talk to the artists or teams behind the projects to get to understand what you are buying. So please, do your own research before purchasing NFTs.
NFT art is a new idea to traditional collectors (and everyone) while traditional art collectors might find it harder to understand that an NFT holds value when they have been trading physical pieces of art forever. This is because physical art pieces can have a history of sales value, a standardization of cost and return on investments over time. A physical art piece offers a buyer a physical item that gives them a sense of value. Being able to put your hands on something is a powerful thing. We are tactile creatures after all.
1. 100% VERIFIABLE ART WORK
One key difference with traditional artwork and NFTs is that it is 100% verifiable who the owner is, and 100% verifiable who the original artist is. This can become harder in the traditional art world due to forgeries and many years of time since the artwork was created.
2. REVENUE FOR ARTISTS
A second difference between traditional art and NFTs, is that NFTs are allowing artists to create revenue in two ways. (a) From the initial sales of artwork (b) Secondary sales (NEW)
a. From the initial sales of artwork
Making money from selling something you own has always been the case. This is the classic case of supply and demand. Trading goods or services with someone for something else that has similar value.
The issue with this model for an artist can be answered by some questions an artist might ask themselves. Especially unestablished artists.
“what if I undervalue my work”, “what if I become famous over time”, “what if I want to stay connected with my art collectors – But I don’t have the financial incentive to keep improving my collection and community over the years to come”.
b. Secondary Sales (NEW)
Artists can now make money forever in the secondary market. This has not been the case before. NFTs changes the dynamic of the artist and the collectors.
NFTs keep the artist connected to their work, and more connected to their community because they are financially incentivised forever. If they do not build their community, their art value may decrease, if they give extra value like easter eggs and benefits to their collectors then their value should increase.
Traditional Art Example
If I sell my painting to Mark = I make money
If Mark then sells my painting to Ruairi = Mark makes money
NFT Art Example
If I sell my painting to Mark = I make money
If Mark then sells my painting to Ruairi = Mark makes money, and I can also choose to make a % of the sale.
This is extremely powerful. It means I can make more money over the future sales of my art, which means I am incentivised to provide a better art project, with more value, and I can work to build a community of collectors if I choose to.
Think of Leonardo da Vinci. Leonardo sold his artwork for money in 1480. He would have made money in 1480, but his children and his children’s children would not have received any commission from any sales over the following 500+ years. NFT changes that.