Welcome to the World of NFTs. Presented by Fabrik Media.

NFTs In The World Of Art: What You Need To Know

No doubt you’ve read about it and heard the talk around town. That tech-savvy friend is constantly rambling about NFTs, and you simply nod your head – but the reality is you aren’t sure how it works.

Since November 2017, a total of $174 million has been spent on NFTs, and as the industry expands, more artists and art buyers will be drawn into this new landscape.

We’ve put together an overview of what you need to know about this elusive new segment of the art world.

What is an NFT?

An NFT, or non-fungible token, is a digital asset associated with physical and non-physical items. An NFT could range from collectible sports cards to digital art and other visual art forms.

What is an NFT?

NFTs cannot be directly swapped with one another, and each NFT holds a unique and specific value. Like a concert ticket, it has a unique barcode or QR code relevant to the person who purchased it – making it impossible for someone else to use it (without a name change of course).

Characteristics of an NFT

NFTs commonly have the following features:

1. Indivisible

NFTs come as a whole product and cannot be divided into separate entities at a lesser value.

2. Indestructible

NFTs exist on the Ethereum platform and are bought and sold under smart contracts. This means each transaction is carefully tracked and accounted for, and you cannot destroy, remove, or replicate NFTs. Unlike buying a movie on YouTube, when you purchase an NFT, you own it outright.

3. Verifiable

NFT digital artwork can always be traced back to the original creator, meaning there is no need for third party authentication. This is a product of the blockchain technology in which the NFT is traded.

How Do NFTs work?

To understand NFTs and how they work, we first must acknowledge the distribution model in which they exist. NFTs are part of the Ethereum system. Ethereum is a cryptocurrency, similar to Bitcoin.

How Do NFTs work?

However, Ethereum distribution channels work differently and are set up to handle NFT transactions. These transactions happen with the help of blockchain technology and allow art to be sold directly to a global audience of buyers without using a gallery or auction house.

Why do they have value?

Much like digital art, visual art, or any asset for that matter – supply and demand drive value. Due to the scarcity of NFTs, people will pay a lot of money to own them.

Will this be similar to art collecting?

When someone buys an NFT, they can feel assured that they are the sole owner of that piece of digital art. Just like physical art, anyone can own a Pollock print, but only one person has the original.

What are the benefits?

Thanks to the digital nature and blockchain technology associated with NFTs, distinguishing information makes them easily verifiable. This renders fakes non-existent.

Fabrik is an evolving independent platform for art world professionals, collectors and individuals who are interested in art. Subscribe to learn more about the world of NFTs and art today.

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