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Tuesday, January 31, 2023

What Is Cryptoart?

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The cryptoart market is projected to be worth over $7 billion by 2028.

Unless you’ve been living under a rock for the past few years, you’ve probably heard a lot about cryptoart and the wild prices that NFTs are fetching. That doesn’t necessarily mean that you know what cryptoart or NFTs are, however.

For many people, digital art is a confusing subject, especially when such large valuations have suddenly been put on some types of art. Fortunately, that’s what we’re here to clear up in this post.

Today, we’re going to give you a thorough guide on what cryptoart is and why it’s such a big deal. Along the way, we’ll go over the rise of NFTs, and how you can take advantage of them both as a collector and an artist.

The world of art has always been shrouded in a bit of mystery and cryptoart is no different. Keep reading, and we’ll try and clear some of the most important things up.

What Is Cryptoart?

The short explanation is that cryptoart is any form of digital art that uses blockchain technology to confirm ownership. It could be a JPEG, GIF, MP4, or WAV file, and the authentication is issued through non-fungible tokens, which prove ownership over the piece and prevent unauthorized replication.

It’s not all that different from the art world, where a Picasso or Malevich might go up for auction and fetch millions of dollars. Whoever buys the piece will want to have it authenticated and given a provenance to prove that the piece is really what it claims to be.

The concept behind crypto art, as well as the fine art market, is scarcity. It’s being able to acquire something that no one else in the world can have. How much that’s worth is dictated by how much consumers will pay, which turns out to be a lot.

A New World for Digital Artists

Previous to the explosion of NFTs, digital artists could have their work replicated countless times by people all over the world. The number of forgeries and the inability to determine which piece of digital art is authentic renders it all worthless.

With NFTs, digital artists have the opportunity to make money with their artwork and people are happy to pay for exclusive rights to the work. There are countless examples of massive cryptoart sales over the last few years.

Beeple, for instance, is the pseudonym of the American digital artist Mike Winklemann. In early 2021, Beeple’s “Everydays: The First 5000 Days” sold as an NFT for $69 million. Before NFTs, Winklemann claimed he’d never sold a print for more than $100.

Later in 2021, an artist called Pak sold a piece called “The Merge” for $91 million. 30,000 NFT collectors put their Ethereum together for this record-setting number. No artist before has been able to make this kind of money on their work.

In many ways, cryptoart is the natural progression of art throughout the 1900s into the 20th century. The only difference now is that these digital artists are better equipped to monetize their work with NFTs.

What Are NFTs?

The term “non-fungible” means that the thing in question is completely unique and can’t be replaced with another thing. Whereas Ethereum or Bitcoin is a type of currency that can be traded one-for-one, digital art is unique and can’t be represented by anything else.

That’s not to say that NFTs can’t be bought, traded, and sold on marketplaces with cryptocurrency. Most NFTs belong to the Ethereum blockchain, but other blockchains have started coming out with their own version of NFTs.

Blockchains are ways to record transactions without placing responsibility on a single entity for security or accuracy. It’s very complex, but you can find thorough breakdowns online explaining blockchain technology as it relates to cryptocurrency and NFTs.

So, NFTs are tokens that have important information stored on them. This information would include the digital art file that was purchased, as well as data validating one’s ownership.

Getting Set Up

If you’re interested in investing in digital art, you’ll need to start by purchasing Ethereum. You can do this by signing up for a crypto exchange account, like eToro or Coinbase.

You’ll then need to set up and send your crypto to your wallet in an NFT marketplace. There are several different marketplaces available, each of which does things a little bit differently. Each one has its own distinct art collection, so choose the one that has art that catches your eye.

How to Buy NFTs

After you’ve set up your wallet in the marketplace, buying NFTs is incredibly easy. Most of the big marketplaces operate like auction houses, so you’ll have to place a bid on the NFT you want.

Once you’ve made a purchase, the key to your NFT will appear in your crypto wallet. It’s worth noting that you can store the contents of your crypto wallet offline to make it more secure. The token ID (or “key”) that you have in your crypto wallet is what gives you access to where the NFT is really stored.

The beauty of the NFT marketplace is that you can effectively become a digital art collector. Part of owning a digital art collection is the ability to trade and sell your NFTs as well. Many NFT values skyrocket immediately after the auction, so you can flip them and make a considerable amount of money.

Start Investing in Cryptoart

Now that you understand a little bit more about the nature of cryptoart and NFTs, it’s time to test the waters. Buy yourself some Ethereum and start surfing the NFT marketplace for digital art that moves you. NFTs make investing more exciting and allow you to support artists along the way.

Did you find this post interesting? Come back and visit us again for more on cryptocurrency, investing, and technology.

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