Learn the differences between NFT Art and NFT Art with utility so you can make informed and wise investments with these digital assets.
Cryptocurrency has been around for a while. Since its inception in 2008, via Satoshi Nakamoto’s influential manifesto titled Bitcoin: A Peer-to-Peer Electronic Cash System, the technology has come a long way.
Many investors have made significant money from this alternative financial system whose main selling point is doing away with centralized regulation. That means no central banks and governments to contend with. You can acquire wealth on the down-low, and do it fast, too. At least if the whims of the crypto market stay in your favor.
A testament to cryptocurrency’s considerable progress over the years is the fact that these days, there are a hundred digital monies on the blockchain you can invest in, all inspired by the trailblazing Bitcoin. The technology has even branched out from mere monetary digits to art through NFTs.
Like Bitcoin, NFT Art is a digital asset. It can be in the guise of a painting, article, or even music. The only difference between an NFT version of a record and an actual vinyl is how the latter is something you can hold. The latter, meanwhile, exists solely in the digital space.
NFT stands for non-fungible tokens. To understand what it is, it’s best to start with what fungible tokens refer to. Your $20 bill is fungible. You can break it into 20 pieces of $1 bills and get the same value for your money. Non-fungible tokens, on the other hand, do not operate under the same rule. A 10-second TikTok video, for instance, can be worth nothing more than $5 production-wise and sell for $500,000.
Anyone can turn their artwork into NFTs through a process called minting. If you have an old sketch of artsy landscape, for example, and you have a reliable computer, even a refurbished MacBook Pro M1, you’re already a possible candidate for NFT creator. All you need is a crypto wallet with enough funds to pay a marketplace to host your creation.
Once your artwork is in the blockchain, all you have to do is wait for another user to consider your product valuable enough to purchase it. This should come as no surprise, but NFTs are typically brought using cryptocurrency.
You may even assign a commission value on the NFT file you upload to the blockchain. That means every time the product is sold, you get royalties.
Basically, there are two ways to earn from NFTs. Either you become a creator and sell stuff, or an investor and acquire stuff you deem has the potential to inflate in value. As to what dictates the latter, only time will tell.
NFT Art with Utility
One of the oft-parroted criticisms against NFT art is how they are not real. They are merely digital representations of things that already exist in the real world. This is where NFT art with utility comes in. The concept seeks to address the all-too valid concern of cynics—that NFTs are, at best, useless, and at worst, a scam.
Utility NFTs boast valuable and practical applications. You do not just get digital ownership of a popular meme or a drawing made by a fifth-grader. Utility NFTs offer opportunities and access beyond the digital realm.
One noteworthy example of utility NFT is the Coca-Cola NFT jacket. Those who purchased them received the all-too-familiar classic Coca-Cola retro fridge made in Italy. Here, it’s evident that there’s a tangible value to what has been sold and bought. The seller did not just sell something exclusive to the blockchain, and the buyer did not just buy something they can only stare at on their computer screen.
The possibilities for utility NFTs are endless. For example, a band may sell NFT concert posters that allow buyers a backstage pass during the concert, among other benefits. A painter may sell NFT art that privileges a buyer an afternoon visit to their studio. Utility, in this case, is synonymous with redeemability. The idea is to transform digital ownership into physical value.
The Future of Art and Finance
NFT art has what it takes to transform the creative industry the way Bitcoin transformed the financial sector. For starters, it will break down the walls traditionally built by gatekeepers in the art world. So long as you have an internet connection and a passion for the arts, you will not be excluded, no matter where you hail from or the social class you belong to.
You can make, acquire, and trade creations based on what you deem are valuable. On top of that, NFT art with utility will allow you to possess something from the blockchain which affords you real-life value. If you think those are great propositions, learn more about how NFTs work so you can come up with an informed decision as to whether the idea is something you can get behind.