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Exploring the World of NFTs: Understanding Cryptocurrency Art



29 Nov, 2021


NFT or non-fungible token is a cryptographic coin based on blockchain technology, the main feature of which is assigned a unique value to each piece and the fact that they are limited in quantity. In other words, each NFT is unique to the rest of the tokens in the chain.

For example, a plane ticket - everyone has the same on the plane - but they are issued in person, or a work of art painted by the artist - each painting may have a different value than the other.

Thus, a typical NFT acts as a unique representation of an asset or good in the form of a virtual token. Through cryptography, they help in verifiable proof of ownership and authenticity of an asset. The tokens are most often created on the Ethereum blockchain platform in the ERC-721 protocol.

As the name suggests, NFTs are not convertible. So, these cannot be converted into traditional or crypto currencies such as USD, ETH or BTC. As a result, these tokens became a use case in the collector's industry, because these facilitate the verification of the authenticity of given assets, such as works of art or trading cards.

Why is NFT becoming popular?

Although NFT as digital asset is not as popular as bitcoin (BTC) or ether (ETH), but its nature is so unique that its generating widespread interest. This is mainly driven by artists such as CGI Beeple or Justin Royland (creator of "Rick and Morti") and NFT marketplace the Nifty Gateway. As a broad understanding of NFT developed in the world of art, more and more famous personalities started joining in, and began selling their works through NFT tokens. This was not only because of the innovations offered by this solution, but also because of the investment returns and earnings that clearly justify NFT as a lucrative financial instrument.

Despite the gamechanger introduction of NFT or non-fungible tokens into the art industry, these tokens owe their popularity primarily to the gaming industry, in which NFT technology flourished. The pioneering example of this trend is the game CryptoKitties.

Thus, parallel to the rise of Non-Fungible Tokens (NFT), NFT marketplace platforms have emerged where they can both be bought and sold. An example of this is OpenSea . Over time, NFTs began to gain more and more popularity, in fact so huge that their price in individual cases reached thousands of dollars. Non-Fungible Tokens not only have a wide range of applications, but also represent various goods, including works of art, blockchain-based games, movies as well as decentralized domains.

NFT as a new dimension of Art

Until now, works of art sold on the market have been static, presented in two-dimensional (2D) form, most often as a drawing on a piece of paper, or a painting on canvas, such as Leonardo da Vinci's Savior of the World, which was sold for $ 450 million. The exception to the rule is various types of sculptures and installations, made not only in three-dimensional (3D) form, but also dynamic, with moving parts like "The Girl with a Balloon" by Banksy, which, framed in a special device, was destroyed, right after selling for $ 4 million.

With the advancement of technology, works of art began to be presented in digital form, without any restrictions such as color, movement or size. Until now, however, digital works have not been on the minds of investors, and the market has not been interested in them due to the limited sales opportunities and the lack of unique value of the work.

This has been changed by NFT tokens and NFT Marketplace platforms, which turn artists' works of art into limited supply tokens, allowing investors to compete for the works. Every day, more and more artists are adopting the NFT concept, earning exorbitant sums on single auctions.

Top NFT Marketplace Platforms

The OpenSea NFT Marketplace

The OpenSea marketplace is the first and largest peer-to-peer platform for crypto collectibles. Active since 2018, it’s the world's most popular NFT marketplace. The platform is user-friendly — all you have to do to add your own NFT is specify a few categories and upload your artwork. The ownership of the token is assigned right after creation, post which you can immediately sell or transfer it on this NFT marketplace. OpenSea is compatible with standard blockchain standards, which means you can create your work on another platform and then list it on OpenSea.

You can do this without paying any listing fees or going through a complicated listing process — though OpenSea gets a cut of 2.5 percent of the NFT's sale price when you sell. The original creator of the NFT can also choose to take a fee on subsequent sales of their artwork by creating a royalty stream for themselves.

The Rarible NFT Marketplace

Rarible  was launched in 2020 but quickly rose in popularity to become one of the largest NFT marketplaces, raking in some $150 million in sales in 18 months. Every type of NFT you can imagine is available for purchase because Rarible allows anyone to buy and auction off digital art. Rarible also has a governance token that enables users to make and vote on proposals around the platform's features and fees.

As a content creator on Rarible, you can decide to sell your NFTs in one of two ways: The Buy Now option or the auction. As a buyer, you can sort and filter the NFTs using a wide range of categories.

The Binance NFT Marketplace

The cryptocurrency exchange Binance created an NFT Marketplace in 2021, launching with artwork by the legendary artists Andy Warhol and Salvador Dali. Binance lists all types of NFTs, including sports and e-sports items, collectibles, entertainment items, and digital art. The NFT marketplace operates on the Binance Smart Chain using BEP-721 tokens. The Binance NFT marketplace also supports NFTs on the Ethereum network.

NFTs created on either Binance Smart Chain or Ethereum are subject to blockchain network fees. In addition to these fees, NFTs made on Binance NFT marketplace are subject to a 1 percent listing fee paid in Binance Coin (BNB). As an artist, you can choose from an auction or fixed-price format, and you can take payment in one of several different cryptocurrencies. Artists receive a 1 percent royalty payment for any subsequent trading of their NFT on the platform. If you transfer in an NFT you own, you can also receive a 1 percent royalty when it’s sold.

Making an NFT on Binance is straightforward. After you enter the basic details about your NFT and the type and length of the sale, the Binance team reviews your submission before listing it.

The NFT technology, as innovative as it may be, is still young and has many skeptics who believe that a work that cannot be physically touched is worth nothing. But this border is also fast blurring, as demonstrated by the below mentioned top most expensive NFT list.

The Most Expensive NFT List

Everydays: The First 5000 Days

The most expensive NFT sold and bought to date is EVERYDAYS: THE FIRST 5000 DAYS, an artwork created by digital artist Mike Winkelmann, also known by his nickname, Beeple. EVERYDAYS is composed of the 5,000 digital pictures that Beeple posted online in a steady stream for 5,000 days. This NFT is notable for being the first piece of purely NFT artwork to be sold by a major auction house — Christie’s. EVERYDAYs sold on March 11, 2021, for an astounding $69.3 million. According to the auction house that sold the NFT, this price makes the piece the third-highest auction price for a living artist, behind artists Jeff Koons and David Hockney.

CryptoPunk #7523

The second most expensive NFT is CryptoPunk #7523, one of several Alien Punks created by Matt Hall and John Watkinson (founders of the studio Larva Labs). The CryptoPunks as a set of 10,000 pixel-art characters are an earliest example of NFTs on Ethereum. This particular CryptoPunk in the set has blue green skin, a small gold earring on his right ear, and a brown beanie cap on his head — as well as a medical mask, which became symbolic of the COVID-19 pandemic. CryptoPunk #7523 was sold for $11.75 million on June 10, 2021, as part of Sotheby’s online auction

CryptoPunk #3100

CryptoPunk #3100 is another CryptoPunk NFT that features an Alien with blue green skin, no hair, and a blue-and-white striped headband. CryptoPunk #3100 sold on March 11, 2021, for $7.58 million, or 4,200 ETH.

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