So, Why do NFTs Matter?
Now, the whole fuss these days is not so much on the tech behind NFTs, but more so on the revolution it’s stirring up in the art world. You see, creatives have started to create digital “art” as NFTs, which are then sold much like traditional art but with a twist! Effectively, NFTs can be bought first-hand from an artist and then second-hand from marketplaces, all through the blockchain (which is a public domain) – allowing authenticity and ownership to be clearly tracked. This solves for the issue of replicas floating around – after all, we hear the Mona Lisa on display at the Louvre isn’t the real thing, but who can prove it?! Oh, and by the way – these days, even art auction houses (like Sotheby’s) that used to only sell traditional art, sell NFTs.
Another important aspect by which NFTs are shaking up the art industry is that unlike the way art has been traded thus far, creatives that produce NFTs can continue to earn royalties on their creations whenever they’re resold. Any passive income believers out there?
You see, thus far, as art is passed down from one owner to the next, the current owners have no obligation to share any portion of the appreciation of the value with the previous owner(s). This is all made possible because the creators (and subsequent owners) can be tracked through the same blockchain on which these NFTs are created – pretty clever, right?! In turn, this brings financial sustainability within the art community that has traditionally been perceived as a low-income generating professional field that relied on funding and donations from patrons to stay alive. And what about those patrons? Well, they see NFTs as just another investment – a new asset class that can go up in value over time and give them a financial return.
Lastly, as the blockchain is accessible globally, the creatives that are creating NFTs can tap into potential buyers internationally that can readily purchase these tokens (well, granted they have some Ethereum cryptocurrency storied in a digital wallet!) with no intermediaries taking a cut here or there. Ultimately, that means: more wins for creatives.