Crypto art is a new form of digital art that uses blockchain technology to prove ownership.
Crypto art, as a sub-ecosystem within the world of cryptocurrencies, aims to preserve immutable versions of digital art such as music albums, paintings, awards, and a wide range of memorabilia.
Crypto art, can have its authenticity verified using a non-fungible token (NFT). The work's one-of-a-kindness makes it valuable, unlike traditional digital art, which can often be replicated.
Crypto art is stored on the blockchain as non-fungible tokens, or NFTs, and is usually associated with a monetary value. The value of crypto art or NFTs, like traditional art forms, is heavily influenced by the creator's credibility, the art's rarity, visual appeal, and its demand in the collector's market.
NFTs can be used to publicly verify digital art forms for authenticity, and ownership history, as collectables. Let's take a deeper look at the world of crypto art.
Given the transparency around ownership and price history, some of these new pieces can now trace their increase in value from creation, to current values in the hundreds of thousands of dollars an item.
Who are the crypto artists?
The artists who create/recreate pieces to be stored on the blockchain are the primary drivers of the crypto art landscape. Although NFTs can represent many aspects of the digital world, the first step is still creating the actual digital artwork (image or song for example).
Digital art in GIF, JPEG, videos, 3D images, and similar art forms can be made using readily available software.
While digital art can be replicated and distributed via the internet, crypto artists must certify and mint a nonfungible token linked to the authenticity of the art created. After it has been certified, the artwork can be uploaded to various marketplaces and marketed to potential buyers.
It is important to note that copyright laws apply to crypto art, and artists are expected to create, mint, and sell unique NFTs while respecting the ownership of other artworks.
What makes crypto art possible
Metaverse
Neal Stephenson, the author of the science fiction novel Snow Crash, coined the term "metaverse" in 1992. This was the first time anyone imagined a fully interactive virtual world with human avatars and 3D digital objects.
The most popular implementation of crypto art or NFTs is Metaverse, which uses digital art to represent objects in a fully functional virtual world. Users can create, purchase, and sell virtual versions of shoes, clothes, property, and other belongings in the Metaverse.
A metaverse can also represent social communities where people worldwide can meet online for conferences, meetings, and parties. Users in a typical metaverse setting can interact with one another and participate in virtual reality (VR) events such as group dancing to music or yoga classes.
Metaverses have also found applications in the gaming industry, where developers create open-world games based on the growing digital ecosystem. Metaverses can be transformed into interactive virtual worlds explorable via user-created avatars by incorporating gamification.
Given the untapped potential of metaverse possibilities, major social media and tech corporations continue to investigate various use cases aimed primarily at improving customer engagement. For example, Facebook renamed itself "Meta" to better align with the development of a metaverse. Following suit, numerous tech behemoths investigate metaverse capabilities to identify new revenue streams and customer engagement services.
Non-fungible tokens (NFT)
Crypto art is made possible by non-fungible tokens. While NFT baseed art seems similar to any other type of digital image, including JPEG, GIF, and 3D images, uniquely, they contain metadata that can be used to prove their value and ownership on a public blockchain.
NFTs have evolved to represent real-world objects in metaverses, and other virtual worlds can use the limitless possibilities provided by digitalisation. Online virtual stores make buying digital clothes, shoes, real estate, and other assets and merchandise easier.
The actual market value of NFTs is determined by the rarity and public demand for a specific collection or entity. Examples of mainstream NFT adoption include the release of music albums and the distribution of awards and fan tokens at various sporting events.
Artists use this emerging landscape to create art and market it to potential buyers worldwide, representing real-world aspects. This also allows enthusiasts to recreate popular paintings and offer collectors a piece of priceless history.
So how much does it cost to hang crypto art on your wall?
While crypto art can be replicated and copied by simply downloading the image or taking a screenshot, this method excludes the most important feature of the art, namely the metadata or proof of its uniqueness.
Before it can be called NFT and have monetary value, each digital art must be assigned a unique ID.
As a result, the NFT's unique ID is what distinguishes each piece, confirming the legitimacy of the art's value and ownership. Depending on the service provider and the blockchain host, the cost of minting an NFT can range from as little as $1.00 to an average of $900. However, these higher gas prices can increase the NFT minting costs.
An NFT artwork's unique ID can be cross-checked across a network of public blockchains. When a piece of crypto art is sold or transferred to a new owner, the metadata is timestamped on the blockchain network. An NFT can range from a few dollars to millions of dollars, depending on the piece's rarity and collector demand.
Many NFT marketplaces now assist creators in converting digital art into a non-fungible token.
Native blockchain cryptocurrency wallets and cryptocurrency payments are typically used in the process. Creators must pay transaction fees or gas fees to update the blockchain with metadata about the crypto art in question, as determined by the blockchain network and the blockchain's stress or current transactional capacity.
Contrary to popular belief, copying crypto art is technically impossible.
It is not as simple as saving a copy of an image or video locally on a computing device. When a user attempts to "save" a crypto art, for example, the user saves an identical copy of the image but fails to capture the information that makes the NFT component of any digital art.
In many cases, the artist may elect to retain copyright ownership of an NFT, allowing them to create and sell, and get paid for, multiple copies of the same work. However, metadata distinguishes the right of similar-looking NFTs and ensures the creator's credibility.
A glimpse of the future of NFTs, the metaverse, and crypto art
The credibility, and volume of people who believe in the ecosystem and its level of mainstream adoption will determine the future of crypto art. The participation of well-known artists, musicians, athletes, and celebrities, has helpped crypto art attract many people eager to buy, sell, and collect art in the form of NFTs.
The crypto art ecosystem's current use cases include art and interactive virtual worlds.
With increased adoption, in areas such as art, NFTs are now also entering other traditional asset classes, such as purchasing super cars and real estate.
While the world of cryptocurrencies, particularly crypto art, has yet to be totally explored, emerging technology has already changed how we now view valuable collections and digital art in a virtual setting.
Bottom line on what is Crypto Art
Crypto art may appear surreal and even a little futuristic at first glance, but it is here to stay. It's a novel way for a wide range of artists to maintain scarcity while bringing their work directly to their audience. Crypto art is undoubtedly the next step forward in a constantly evolving industry.
Now that you've discovered the impact of NFTs on art why not find out if NFTs eliminate Death Duty, Real Estate Fees or Capital Gains Tax.
Send any questions to hello@globalinvestorgroup.co.uk or follow us on Twitter, and we’ll be happy to share what we know.