First let's talk about art. What makes art intrinsicly valuable, is it the quality of the work, the size of the artwork, or something almost a little bit random. Simple art can sell for millions, whilst art that might take someone months to produce may be worthless, we can say that art is hard to place a value to, or be accurately substituted for another currency: This is the meaning of Non-Fungible.
NFTs - Non Fungible Tokens, is similar to a cryptocurrency, in that it is a virtual asset, however shares the same property as art in that the value of an NFT is completely non fungible. NFTs actually live on the blockchain, which provides them the property of being "impossible" to duplicate, or even be modified.
OpenSea is a space to view NFTs, the largest marketetplace for NFT, with a huge raising popularity, and a tonne of random art. My favourite being sold is:
Whilst being a site, of completely oversaturated artworks, I can still see why some of these art is valuable. Being able to say you own this exact permutation of a pixel on a white background, holds some value to it. Personally, I would think about purchasing this artwork due to pure entertainment of it.
NFT's provide the first time of, actually being able to own a digital asset, and also digital artists are actually being able to profitise from their artworks, vs just working for commissioned art.
One amazing aspect of NFS is the possibility for digital artists to continue to make profits from their artworks after each sale of art, this is where I see the immense popularity in NFS, if you find a quality piece of art early and cheap, after many years of continuous trading of that piece, can make good profits.
Previously I have seen digital artists, transform their pieces through 3D prints, and even jewelry making to find a unique selling point of their art, which at its core is just generative digital art. Now digital artists are able to spend more of their time, working on their creativity, vs having to find money making opportunities or neccessity to work on commissioned work.
NFTs have transformed the art industry, modernising it. Popular artists are beginning to join the trend, as well as major corporations such as the NBA selling digital figures of their players. NFTs has also been shown to connect the digital verification technology to real life objects, shown with Nike's CryptoKicks, which I thought would have seen much more traction, as can super accurately uniquely identify a piece of item, which I could see could be applied to traditional art world. However, I guess there are other methods to scientifically compare real life objects, that does not cost an immense amount of money or energy costs which I will talk about now.
There are some drawbacks to NFS, costs, energy, saturation, environmental impact. For example, I have attempted to purchase an artwork for 0.1 ETH, which currently goes for £16, however to actually purchase this piece, I would need an additional £35, just for gas prices to perform the calcuations for the transfership of the NFS token. The reason for these prices, is due to the inherent connection to cryptocurrencies and their huge current demand, as well as the evaluation of computation to energy use, waste heat, etc.
Cryptocurrencies are seen to have a large negative impact of the environment, the amount of electricity used for one 10 second NFS purchase, is months of a typical household energy use. I believe cryptocurrency companies have been looking into this, and finding alternative methods of computation (Proof of work -> proof of stake) to reduce inherent environmental impact from the technology. NFS tokens rely on blockchains, and also, the fact that NFS tokens are purchased using blockchain technology also gives them a more exciting market.
We'll see how NFTs further transform the industry, there is already a huge amount of VC recognition, and already a lot of money being spent within this baby industry. Personally, I am all up for supporting digital artists that I love, however: paying an upsurd markup (for essentially delivery costs) puts me off, as well as the huge saturation of blatant copy pasting going on, it's hard for me to know where is the original.
This is also where Certificates of authenticity comes in. This also makes the NFT more valuable, as the token would be created by the artist themselves proving it is their original work. This way, we are able to identify artwork that has just been copied by another artist, as a scammers attempt to sell it as their own. Further putting the creators with more control of their art.