How will NFTs bring about significant changes in the art field?

This article is from Crypto Valley Live.

NFTs, or non-fungible tokens, are one of the current innovations based on tokens and digital assets, attracting attention from the media and tech communities. NFTs are unique digital assets on the blockchain. They can represent art, digital collectibles, or even real-world items. Just like baseball cards and comic books, their value does not come from the underlying materials but from rarity, aesthetics, and the creator.

A relevant example today is NBA Top Shot, a collection of digital assets that has generated $230 million in transactions since its launch in October 2020. Fans can now collect "NBA Top Shot," which features moments "officially licensed by the NBA and minted in limited quantities on the blockchain."

This week, we explained what NFTs are and their potential broad impact on media, fashion, sports, art, and fans.

We recommend starting with Mitchell Clark's excellent introduction and FAQ guide on NFTs. In the following sections, we will delve into why NFTs are beneficial for both sellers and buyers. For those interested in exploring this field further, here are several marketplaces to browse: OpenSea, Rarible, SuperRare, Nifty Gateway, NBA Top Shot, and Hashmasks.

Erica Matsumoto highlights the advantages of NFTs, as Scott Belsky, the founder of Behance, recently purchased "Furry Lisa" for approximately $20,000 worth of Ethereum. In his in-depth study of crypto art, he claimed that the NFT art world will "likely be the greatest opportunity for artists to be liberated in over a century. This is not a suboptimal or marginal version of the real-world art economy, but a significant improvement."

Why is it called a "significant improvement"? Belsky believes that crypto art has many advantages: it cannot be forged, it is transparently scarce, portable, and provides artistic opportunities. Clark from The Verge agrees with this viewpoint.

"You might be interested in NFTs because they provide you with a way to sell your work that might not have a market otherwise. If you come up with a really cool digital sticker idea, what would you do? Sell it in the iMessage app store? Not possible. Additionally, NFTs have a feature where every time an NFT is sold or transferred, you receive a percentage of the fee, ensuring that if your work becomes very popular and its value skyrockets, you will see some of those profits."

WaPo's Vice President of Business Jarrod Dicker takes it a step further in his article, stating that the ownership economy—"through decentralized autonomous organizations, or DAOs + non-fungible tokens"—is a revolution in the creator economy.

"This new media structure will be entirely owned by creators, operators, and consumers themselves…. These media companies can be seen as collectives, with their own identities, incentivizing creators and consumers to flow interdependently within each collective."

Sports and fashion NFTs are shining brightly, thanks to Dapper Labs, the creators of CryptoKitties, whose NBA Top Shot marketplace has generated over $230 million in total sales. Top Shot is a collection of NFT basketball clips that combines the nostalgia of collectible memorabilia with the fresh concept of digital ownership, along with a hint of art collecting.

Returning to Dicker's point, NFTs draw from both the traditional economy and the maker economy—a correct blend of new and old, resulting in great success.

While CryptoKitties saw a sales peak in 2017, the hype died down a few months later (though it certainly did not vanish). This attempt felt quite marginalized even in 2019. But now, sports websites are filled with Top Shot works and feedback from sports fans who have invested thousands of dollars in NFTs. An entrepreneur purchased a LeBron James NFT for $208,000. Here’s his reasoning:

"I believe LeBron James is the greatest athlete of all time…. And from an investment perspective, I really think he is undervalued. I think the value of something like Top Shot, with prices changing so rapidly, really needs to be compared across different 'moments'….. If [LeBron] retires tomorrow, that card will go up. If Zion [Williamson] gets injured tomorrow and has to stop playing, that’s it. Then he won’t even reach one percent of LeBron’s career. So, it’s a value game. I think it’s undervalued…… even though it’s the highest purchase ever. I think it’s already worth seven figures."

And in 2019, a digital dress sold for as much as $9,000! We were surprised by this. It made us think of digital fashion. "Iridescence" (shown below) was produced by The Fabricant—whose co-founder had been discussing digital fashion years before it became popular—and Dapper Labs.

In 2019, the market for digital assets—and digital fashion—was limited. Now, the NFT market is more accessible (media hype has also played a role), and digital fashion is thriving. Digital sneaker and collectible company RTFKT recently sold virtual sneakers worth $3.1 million in collaboration with artist FEWOCiOUS.

The new era of digital art and ownership Mitchell Clark summarizes the appeal of NFTs: "Anyone can buy a print of Monet, but only one person can own the original."

Take Beeple's artwork as an example. While you can freely download Beeple's "CROSSROAD #1/1" to your desktop, the new owner of the NFT paid $6.6 million to own this unique "original."

The story goes that an MBA from Columbia University bought the original from Beeple for $67,000, and then it was modified to reflect the election results… and appreciated 100 times.

Another example: A few weeks ago, Nyan Cat's creator Chris Torres auctioned a remastered version of this iconic GIF on its 10th anniversary. Torres received 300 ETH, or about $473,000 (at the time of writing), from an anonymous bidder for the digital artwork.

Other creators are leveraging their existing influence to sell rare digital assets: Logan Paul made $1 million selling NFTs in 30 minutes, while Grimes has sold $6 million worth of digital art.

Creators are not just making one-time sales: many are selling dozens, hundreds, or thousands of copies. This is not unprecedented—as Bloomberg points out, just like digital art, photographs can be copied countless times as needed. "However, despite this replicability, not all prints have corresponding prices."

Ansel Adams made at least 1,300 copies of his 1941 photograph "Moonrise, Hernandez, New Mexico." "If you look at the auction catalog, they will carefully analyze which are 'better' works: which were printed by Adams himself, which were signed by Adams, and which were made for portfolios."

This is what Jarrod Dicker is trying to convey in his in-depth study of the ownership economy: "NFTs provide a new monetization channel for digital media without limiting development by placing content behind paywalls. It also revitalizes business models that were profitable in the print era but lost in the digital age."

A historic week in business history: March 3, 1923: The first issue of Time magazine is published

24-year-old Henry Luce and 25-year-old Briton Hadden jointly published the first edition of this iconic magazine. The cover featured the now-obscure Joseph G. Cannon (former Speaker of the House). The entire magazine was only 32 pages, including the cover and back cover. You can read the full issue here.