Understanding NFT, Blockchain And The Metaverse
In March 2021, a work by an American artist known only as “Beeple” sold for a staggering $70 million, making it one of the most expensive works by a living artist. The sales price alone made this transaction remarkable but there was something more. This unprecedented price left many in the conventional art world bewildered. How could a JPEG file created by an obscure artist without significant gallery representation or museum shows sell for millions of dollars? And what Christie's had sold was not typical of digital artwork. This record-breaking transaction was for the purchase of a non-fungible token (NFT).
No surprise, that shortly after the Beeple sale, an increasing number of artists began to contact me, asking, "I am a painter. Is this of interest to me? And if yes, how can I tap into these new income streams? What about resale royalties? Are NFTs here to stay or merely a money-making scheme? And what exactly are NFTs, the blockchain, and cryptocurrencies?”
I know that most of this can be overwhelming to many. And the NFT market crash didn’t help to convince artists that NFTs are useful for their work. Yet, I think that all artists need to know how NFTs have the potential to transform how their works are purchased. Here are some benefits for artists:
Total control
NFTs have flipped the script. If you have ever wondered if there was a better way of doing things than having to always go through art galleries and dealers to connect with and sell to your audience, here it is. Creators can now run the show and enjoy more control over the determination of value.
Royalties forever
This is the real game changer. Artists can now create NFTs that are coded to allow them to receive royalties, meaning that all future resales, not just the first sale, will push a portion of the price back to the creator. Thus, if you sell a painting of art for $10,000 and ten years later it reappears on the market with an asking price of $10 million (hallelujah!), you will earn a direct benefit of that increase in value. Actual numbers show this is happening. According to an analysis in 2021, NFTs paid out $174,000 per creator, while Facebook and Instagram paid out $0.10 per user, Spotify paid out $636 per artist, and YouTube paid out $2.47 per channel.
Eco-friendly options
You may be aware of concerns regarding the amount of energy consumed by bitcoin mining and cryptocurrencies in general, which is a problem in today’s energy- and emissions-conscious world. These concerns are valid, but eco-friendly options exist and new options have appeared. Blockchains such as Solana, Polygon and Avalanche require far less energy and, thus, leave a smaller environmental footprint. Even Ethereum has moved to a greener proof-of-stake option, reducing their energy needs by 99%.
Cryptocurrency, NFTs, Ethereum, Web3, blockchain, tokens, the metaverse—a lot of words have been flying around in the past couple of months. In this online class I explain the basic concepts of these—using simple words and examples that you can relate to.
To be clear, as an artist, you don’t need to shift your practice from working with galleries, networking with curators and smooching with your existing buyers to only creating NFTs. As has always been the case in the world of art, it takes explorers, visionaries and inventors on the fringes to create and discover new ways to create and operate. But even in the art world, there is also fear, mistrust and apprehension of the unknown when those boundaries are pushed.
I believe that a comprehensive understanding of NFTs and the Metaverse, still in an early phase of their development, will put you in a commanding position to capitalize on opportunities as they arise. I encourage you to sign up to my online class where I constantly add new videos about this topic and interview the leading thinkers in the space, for example just recently with Justin Aversano who started as a photographer with almost no sales and is now selling for millions of dollars - within less than 24 months. If you would like to finally understand how you can apply these new technologies to your work, sign up now to gain this know-how, easier than anywhere else.
Best, Magnus
P.s. My online class helps artists to sell more artworks. It’s based on my teaching at Ivy League Universities and 20 years of experience in the art market. And the best art market experts contributed to the class. The class has helped thousands of artists around the world, in every medium and age group. Find out more and sign up to my free masterclass by clickling on the link below.
