What’s hot in the digital finance world? Cryptoart, that’s what!
Crypto art is digital art in its own right and is very different from the traditional art you may be used to. Cryptoart is considered highly futuristic and provides artists with the opportunity to be more creative without limitations. This medium of art hasn’t been entirely understood or appreciated before.
Crypto art is a viable art form for both the creator and investor and as the digital landscape changes, more and more people are becoming aware of its value.
Investment News has been featuring crypto art in recent months but in reality, it’s been around since 2011. Anyone can create crypto art including corporations, businesses, authors, art advocates, videographers, influencers, and entrepreneurs. There’s no need for the creator to have experience or specific qualifications. All the owner must prove is that they legally own the content – if this is the case, they can mint an NFT.
This brief overview seeks to tell you everything you need to know about cryptoart, what an NFT is, and how it’s linked to crypt art in a nutshell. It also touches on unique IDs in the digital art world, what makes NFTs valuable, and where to store them.
What is Crypto Art?
If you’re new to the world of digital assets, you may find yourself wondering what cryptoart is and how you can benefit from it.
In short, crypto art is a form of digital art treated similarly to physical art collections – but at the same time, they are entirely different. Systems to collect paintings and sculptures (physical art) exist in the art world, but what’s never been possible until now is a way to collect digital art. Crypto art and NFTs now allow art enthusiasts to collect digital artwork.
There are several forms of crypto art that investors can purchase. Some of these art forms include the following:
- VR dreamscapes
- Programmable art
- Digital graphics
Digital scarcity is the driving force behind the crypto art market, enabling people to collect digital art and buy and sell it, too, much like physical goods. How does it work? Well, when someone invests in crypto art, there’s a limited quantity available. The buyer is purchasing the rights to the royalties and reproduction of that particular piece of art.
It’s important to note that crypto art can be digital artwork or physical art. It’s tracked in a cryptosystem called a blockchain. Blockchain technology makes it possible to verify the ownership of digital files and ensures that authentic digital art can be differentiated from forgeries, serving both the investor and digital artist.
With cryptoart, the artwork cannot be replicated, and that’s because the art is linked to a non-fungible token (NFT). This is a unique ID linked to each piece of artwork. When a unique, indelible signature is added to a digital file in cryptoart, it is called “minting” or “tokenising.”
Interestingly, the cryptoart world is pioneering new aesthetics with fascinating art concepts. Let’s take CryptoKitties and CryptoPunks offering collectable characters, and also Beeple offering interesting artworks to add to your collection into consideration.
If you’re wondering about the value of crypto art, one only needs to consider that Grimes sold $6 million worth of NFTs in a sale in 2021. The Nyan Cat GIF created by Chris Torres sold for around $690,000.
What is an NFT (non-fungible token)?
NFTs or non-fungible tokens are what make the crypto art world possible. But, what is an NFT? An NFT is a digital asset such as a virtual asset, gaming art, and collectables that are exchanged over a blockchain platform. Blockchain platforms and NFT marketplaces include Ethereum, Axie Infinity, KnowOrigin, Foundation, OpenSea, Larva Lab, Rarible, and SuperRare.
NFTs are often bought and sold by celebrities and businesses – they use them to generate revenue through collections and to commercialise their brands.
NFTs are, generally speaking, digital assets that are traded online. An NFT is first generated and traded in cryptocurrency with a unique key. Essentially, an NFT enables users to store, protect and control information relating to their identity. One of the leading driving forces behind NFTs is royalties. Many NFT creatives can receive royalties on future sales.
An NFT can transform digital artwork and collectables into unique, verifiable digital files, Jpegs, GIFS, or similar that are then considered one of a kind. These assets can be traded using blockchain technology or the NFT market. NFTs typically include their unique information, detailing ownership and transaction details with the option for creators to include secure links to files and their unique identity.
Users must have a digital NFT wallet if they wish to invest in NFTs. This should be a cryptocurrency wallet enabled to support blockchain protocols. The cryptocurrencies most often used for cryptoart exchanges include Dogecoin, Ethereum, and Bitcoin.
Some top examples of NFTs include the following:
- “Everyday’s: The First 5000 Days”
Beeple sold this NFT at Christie’s, which is a major auction house, for $69 million!
- “Grimes WarNymph”
Grimes (singer-songwriter) sold 10 NFTs for $5.8 million in a collection.
- Glenfiddich Whiskey
Fifteen bottles of 46-year old Glen Fiddich Whisky were sold by William Grant & Son (distillers). Each bottle was assigned its own NFT impression, which allows the owner to show off their collection along with a certificate of ownership that is counterfeit-proof.
Can crypto art be copied?
Many new investors have a big question about whether or not crypto art can be copied. Once you’ve bought a digital asset or have started your digital art collection, you may wonder what’s stopping someone else in the crypto art world from copying the jpeg, GIF, memes, video or any other type of digital asset you have bought. The truth is that crypto art is a digital file that can be copied, just like traditional art. Think of famous paintings such as Starry Night done by Van Gogh. Thousands (maybe even millions) of copies or replicas have been printed and sold legally and illegally. Copying and reproduction are easy, but you are the only owner when you own the NFT to crypto art of digital assets. No one else owns the digital art, and in some cases, owners can purchase the reproduction rights too.
You need to know several things about the rights you get when you purchase NFTs. First, ensure that what you are getting is stipulated in your agreement. Below is a brief list of pointers you need to know about the limited rights of your digital asset. This makes clearer what it means to own NFTs:
- When you purchase an NFT from the creator on NFT marketplaces, you get ownership of the digital asset – in short; it becomes your property. You will receive a digital certificate of ownership, which is minted with a unique ID representing the purchase of the crypto art. Once you have completed the purchases, the details of which will be traceable on the blockchain.
- In most instances, the buyer of crypto art will not own all the rights to the digital asset, so it’s important to be aware of that. This means you may not have the right to reproduce or adapt the digital artwork. You would need to purchase these rights specifically, which ensures you’re legally allowed to do what you wish with the artwork.
- Ownership of NFT in the art world is similar to owning traditional art. For instance, if you buy a collectable artwork, it doesn’t mean that you can display it publicly for profit. It also doesn’t mean that you can start printing the art on t-shirts and mugs unless you have purchased those specific rights, which needs to be signed over to you by the owner (and you must have evidence of such). It’s much the same with NFTs.
How do you buy crypto art?
If you’re interested in getting started with NFTs and crypto art, you might wonder where to begin. How do you buy crypto artworks for the first time? The truth is that purchasing digital art is easier than you think. You can use the Ethereum blockchain and cryptocurrency (Bitcoin, Ether, and other cryptocurrencies) to own NFTs.
In fact, there are several platforms you can use, including SuperRare, Rarible, OpenSea, or Nifty Gateway, to name a few. There are two main blockchains recommended when buying crypto art for the first time: Ethereum blockchain and Solana blockchain.
The basic process to buy crypto art is detailed in the steps below (using Metamask, OpenSea and Ethereum for this example):
- Set up a cryptocurrency wallet. For the sake of this example, set up a Metamask wallet. Once set up, the wallet will sit in the browser of your computer. You can send cryptocurrency to this wallet which you can use to buy NFT art. Send Ethereum to your Metamask wallet.
- Head over to OpenSea. Once on the site, it will request that you connect your wallet. Click on the wallet icon on the top right of your screen and select “Metamask.” You will need to confirm that you want to connect your wallet with the OpenSea exchange.
- Explore the various NFTs on offer and select those you are interested in buying. Purchase the NFT using your Metamask wallet balance (follow the prompts), and once purchased, you can click on “profile” and see all of your purchased NFTs.
The process to purchase NFTs on the Solana blockchain is similar, except you will need a Phantom cryptocurrency wallet and use Solanart to find the digital assets you wish to purchase.
What makes crypto art valuable?
For those unaware of the value of crypto art, there may be a few questions surrounding the value thereof. Is crypto art genuinely valuable, and are people investing in it? While not everyone knows about NFTs and crypto art, it is a lucrative industry that offers immense value. The proof is seen in the sales statistics over the past number of years.
According to Statista, the total sales from non-fungible tokens fluctuated greatly from April 2021 to February 2022. On the Ethereum blockchain on 12 April 2021, total sales from crypto art from the prior 30 days amounted to around $64 million. On 15 February 2022, the sales from the prior 30 days came to around $87 million.
As it turns out, many people are willing to invest millions in digital works. For instance, a piece of art on Christie’s, a digital collage by a USA artist called Beeple, sold for a whopping $69.3 million.
What makes crypto art so valuable is the NFT it is linked to. Because NFTs are non-fungible, it means ownership lies with one person. This alone makes each crypto art piece unique (one of a kind). Take, for instance, the Mona Lisa or similarly world-renowned fine art into consideration. There may be millions of digital copies out there, but there is only one original piece. As a result, the original Mona Lisa is incredibly valuable. It’s much the same with crypto art.
NFTs are a major investment tool because they are not fungible. By definition, fungible means “replaceable by another identical item; mutually interchangeable.” This is what sets NFTs apart from cryptocurrency. Cryptocurrency can be used to exchange for products or other cryptocurrencies of the same value, so they are fungible. NFTs can’t be used the same as each NFT has a differing value. This makes them non-fungible but also makes them more valuable. Various other things make crypto art or NFTs more valuable, and these include:
- Future value
- Buyer perception
- Liquidity premium
- Ownership history
- Underlying value
- Utility (usefulness, profitability)
Where do I store my NFTs?
One of the first things newbies to the cryptocurrency and crypto art world want to know is where they can store their NFTs once they have purchased them. Where will they be safest? Unfortunately, cryptocurrency and, of course, crypto art by association has risk involved.
Platforms and crypto accounts have been hacked in the past, and this may make people fear the worst when investing in NFTs. As such, safe and secure storage is absolutely essential in the process of NFT or crypto art investing.
The good news is that there are several NFT storage options to choose from, and users can select the storage option that best suits their needs and requirements. Secure storage of NFTs with the highest level of security possible is essential, and the three main options for secure storage are detailed briefly below:
While software cryptocurrency wallets are a popular choice for both collectors and investors, they tend to come with the lowest level of security. While they include passwords, encryption and 12-24 word seed phrases to promote security, they are still the easiest targets for hackers. Software wallets must be accessed by means of a cloud service or online browser.
InterPlanetary File System
An InterPlanetary File System is a type of storage option that offers less risk of a cyber attack or hack attacks. InterPlanetary File Systems store NFTs off-chain and use content identifiers (CID) which in turn provides additional security. This option is more secure because it stores CID data hashes on your computer (locally) and not online. However, keep in mind that this type of storage is not 100% as your computer can still be hacked, leaving your NFTs vulnerable.
Cold Storage Hardware Wallets
Cold storage wallets are the safest way to store and protect your NFTs if you’re serious about security. This is because all investors’ data is stored offline and password-protected at the same time – this provides an increased level of security. In addition, cold storage hardware cryptocurrency wallets come with various features that provide more functionality to investors, such as restoring data should they lose their device or have their device malfunction.
NFT wallets to investigate
Choosing NFT wallets requires you to consider your options – do research into each potential wallet to ensure that their security offerings are of a good standard. The following wallets are recommended:
- Phantom Wallet
- Math Wallet
- Coinbase Wallet
- Trust Wallet
It doesn’t matter which wallet you choose to store your NFTs; there are some steps you can take to ensure that you’re storing your digital assets securely. Below are a few tips for storing your NFTs safely on any platform or in any wallet:
- Create complex passwords to protect your account.
- Never share your cryptocurrency or crypto art login credentials with anyone. You might think it is safe to send an email or instant message to a friend or partner with these details, but it’s not.
- Never share, email, or message your 12-24 seed phrase provided with anyone.
- Install high-qualify virus and spyware protection on your computer/device to protect yourself from hackers.
- Store passwords and credentials offline – this is far safer than saving passwords on a device that may be vulnerable to theft, malfunction, or hacking.
- Store your non-fungible tokens offline in a cold storage hardware wallet – this is the safest option for your NFTs.