NFT / Digital art: what is it? Meaning, Marketplaces, Prices - Crypto Art

NFT – Digital Art, a new phenomenon. Here you will learn everything: What is an NFT? How do you buy NFTs? What marketplaces are there and how is the art market developing for investors. Meanwhile, higher prices are being achieved in the digital art market than in the physical one. Collections like“CryptoPunks” ,“Bored Ape Yacht Club” are just two of the most famous works of digital art. The work “5,000 Days” made the artist overnight the 3rd richest living artist (sold at the price of $69 million at Christies). Buy, sell, collections and picture frames for digital art. Welcome to the world of NFT.

Key Facts -

NFT 2024: What is it?

Let’s start step by step. In this article you will learn the basics.

NFT simply explained: Digital art.

The abbreviation NFT stands for “Non-fungible Token” or translated as “not replaceable token”. It is this “non-substitutable” token that makes digital art possible.

Why and why, you learn here!

Enjoy the 360° virtual exhibition! Discover now:

Lukinski NFT Gallery

What has so far distinguished the digital art market from the physical market for works of art is that digital works (images, videos, etc.) could be reproduced infinitely without being able to trace back later which of the images is the original. A comparison: The Mona Lisa in the Louvre has also been copied thousands of times. The original hangs in the Louvre, we know that because the history of this one work of art is verifiable. NFT are digital works whose history is documented. This makes them unique and increasing, a value investment for many investors, even larger hedge funds.

Example: “Bored Ape Yacht Club”.

Collections are often popular, creating 1,000 variations in one collection.

The collection “Bored Ape Yacht Club” is one of the top 5 commercially successful NFT projects.

Here are 3 examples:

What does NFT mean?

What can be an NFT? Anything digital: pictures, videos, music, even accessories, for example for new worlds, like the metaverse. What are the types of NFTs?

Collectibles
Art
Gaming
Music
Additions / Entry
Domains

Let us now clarify the term NFT. NFT = Non-fungible token, if you translate it 1:1. Put a little more nicely.

NFTs are digital, unique, protected objects

So they are unique, something one-of-a-kind. The sales history of an object is precisely documented(blockchain). Thus, a work is unique.

Now two technical terms. Please do not get out of the car! That was all of them already.

Blockchain: transaction history

Everything is documented in a blockchain, currently mostly in Ethereum. Every single transaction that is executed in this decentralized network is documented. In this way, all transactions can be traced, from the creator (producer of the content / artist) to all buyers / sellers.

Brief description:

Blockchain (umbrella term) = distributed, public database
Ethereum = Blockchain Network
Token = Is an asset and uses an existing blockchain and can contain additional information (Smart Contract > NFT).

PS for those already trading cryptocurrencies, Ether is the coin, Ethereum is the network.

What makes the Mona Lisa valuable?

Example Mona Lisa: There are also millions of photos of the Mona Lisa, pictures, digital and analog. Nevertheless, there is only 1 original, which hangs in the Louvre and is exactly documented by the sales history.

So the only sticking point is understanding that a digital object is accurately documented. So it becomes rare and when supply meets demand, a market is created.

Market = supply (1) and demand (x)
Traceable history of the object

Traded on NTF marketplaces such as OpenSea, Binance, SuperRare, and many more. Whether from smartphone, tablet, notebook or smart TV in the browser or app.

Who buys NFT? Establishment in the art market: the example of Christie’s “5,000 Days

The coup of Christies shows how important digital art has become for established auction houses. Quickly explained: Christies has snatched an artist (Beeple) who has already made digital images for over 15 years, more precisely 1 digital image per day. The problem (at the time), digital art was never worth anything because it could be infinitely reproduced. The transaction history of NFTs solves this problem. So Christies combined its collection into one work, “5,000 Days.” The auction raised a whopping $69 million.

Sold for $69,346,250

With the sale, Beeple (artist) became the 3rd richest living artist in the world overnight.

So NFTs are valuable because we attach value to them. Expensive art is bought, almost always, to indicate: “I can afford it”. Just like a Ferrari, just like a Rolex.

What is the cost of 1 NFT?

The price of each NFT varies. Many start at a few dollars. The price is set upon release by the creators, the artists themselves, in hopes that they will realize the asking price. Buyers of NFTs can resell their NFTs at any time. In this case, the sellers of the item set the price.

Offer prices are determined by:

Publication: Price by Creator (Artist)
In case of resale: price by seller

Buyers can also make offers in most platforms.

What are NFTs simply explained?

Let’s summarize once again:

NFT = Digital Art (images, videos, music, etc.)
Everything is documented in a blockchain, often Ethereum
Trading on NFT platforms such as OpenSea, Binance, SuperRare, and many more.
For purchase, cryptocurrency must be purchased (Ether), via Coinbase, MetaMask, and more.

More and more investors are discovering NFTs for themselves. In the following we go deeper into the matter: How does a token / NFT work?

Lukinski's

How does a token / NFT work?

That’s the basics for now. Now let’s go one step deeper into the matter of NFT.

Difference: Coin, Token and Non-fungible Token

As already learned, NFTs (Non-fungible Tokens) document the history of a digital object (all transactions). For this purpose, you use existing structures, such as Ether, which record all transactions in their blockchain. Payment is then made with coins.

Coin
Token
NFT

Coin

BitCoin, Ethereum, are used as payment units. They each have their own blockchain structure.

Coins are means of payment and have their own blockchain structure

Coin briefly explained:

Payment unit
Own blockchain

Token = Interchangeable

Difference: Tokens build on existing structures (like Ether [Ethereum]). Only those who own a valid token are authorized to execute a transaction on the associated blockchain.

Tokens are means of payment built on an existing blockchain structure

Token briefly explained:

Asset
No blockchain of their own, build on existing structures (Ether / Ethereum)
Token enables broad field of application

So the difference is:

Coins are a means of payment, tokens have broader functionalities

Non-fungible token = One time

The broader functionality ensures that further information can be stored in a token. For example, a “smart contract” that makes a token a unique, non-fungible token.

Asset
No blockchain of its own, builds on existing structures
Enables wide field of application
Contains “Smart Contract

Ideal for works of art whose valuation always depends on their provable history.

Such an NFT is created by depositing a smart contract.

Is the artwork the original? Such an NFT makes it easily recognizable (often using Ethereum Blockchain).

Smart Contract turns token into NFT

NFT use smart contracts. A programmed contract that has been deposited. This can contain various things, for example, when was bought, sold, who bought, sold (history of transactions), but also the link to the original file.

Also – and this is where it gets interesting for artists – the Creator can attach a percentage to the Smart Contract that he or she will receive on every (yes every) future transaction. Mostly < 10%. An enormous advantage to the regular, physical art market, in that the creator profits only once, on the first sale. With NFTs, the creator receives the share on every transaction.

Thanks to history in the blockchain: Traceable and verifiable

Conclusion NFT / digital art act

An NFT shows what the original is through the transaction history. So you can identify the unique owner. Just like in the real world. Even with physical artwork, it’s all about checking the artwork with owner history, back to minting (publishing the NFT).

After the basics NFT, now to buy, sell and co.

NFT trade: buy and sell

To trade digital art, you need a wallet, the right marketplace for digital art, but also knowledge about the collections and artists behind the digital artworks. As with physical art, it’s all about the artist behind the projects. The more you know, the more you can survey the market of tens of millions of works. Even individual collections sometimes contain 1,000 or 10,000 individual digital images or content.

Read the whole tutorial here, step by step:

Buy and sell NFT

Marketplaces for NFTs: List

There are now relatively many NFT marketplaces and platforms. Binance, Crypto.com, OpenSea, GameStop, Rarible are just a few of the most important names. Fewer are not coming, as digital art is gaining in importance. Larger investors, even hedge funds are also investing in digital art.

Here you get a good overview of the most important marketplaces for NFTs.

NFT Marketplace

NFT picture frame

What would art be if no one saw it? People buy art for one main reason: I can afford it. With NFT picture frames, digital artwork can be physically displayed, whether in the living room, foyer or gallery.

NFT picture frame

NFT Collection

NFT collections and artists – if you want to buy NFT for the first time, you have to get to know the world of NFT & digital art first. Because unlike physical art, there are also entire collections of hundreds and even thousands of individual objects. Here is a small insight into a few examples of successful NFT collections: The “CryptoPunks” and the “Bored Ape Yacht Club”.

For example, known are these collections: