A simple guide to NFTs for the jargon-free

 

 

Beeple is a digital artist with, we think, quite a cool name. In real life he’s called Mike Winkelmann, and he’s been making digital art for a very long time. He has a massive following on social media for his daily artworks that he has been sharing for fourteen years. Recently, he packaged up his first 5000 pieces into one big digital collage and called it Everydays - The First 5000 Days, then put it up for auction with Christie’s, the world-famous auction house. But this was an auction with a difference. Upon sale, ‘Beeple’ would deliver the artwork directly to the buyer, “accompanied by a unique ‘NFT’, encrypted with the artist’s unforgeable signature and uniquely identified on the blockchain.” In short, a unique JPEG (which we’ll come on to in a minute). He’d done this a few times online without an auction house and it was a great success by anyone’s standards. But even the artist himself was not prepared for the extraordinary sum of money that Everydays fetched.

 

 

Well, for a few reasons really. The art world occasionally has these ‘moments’, where an artist becomes the epicentre of a storm (think Damian Hirst’s controversial artworks, for example) and their desirability subsequently goes through the roof. The work may also have positive associations that increases its value or be an item of such rarity or scarcity that it has higher collectible value. And finally… fans. Beeple had the perfect combination of all these things: selling through Christies gave his work real legitimacy, plus he had built a huge fanbase over the years. But the news storm came through the fact that he was essentially selling an intangible object for a lot of money. There was no shipping, no grand handover. Just $69m worth of JPEG and it’s “unique NFT” transferred to a new owner. For some this constituted shock and outrage, while others simply found it frivolous and a sign of our times. But it was an entirely above-board sale that wouldn’t have raised an eyebrow had the artwork been hanging on a wall, or installed in a gallery. The element of rarity was identical. So, the focus turned to the point of difference – the NFT.

 

It stands for ‘Non-Fungible Token’. Which is almost as bad as the acronym, don’t you think? Back in the old days, an artist would sign their work and perhaps hand it over to a buyer with a letter of thanks, which also served to authenticate the work or provide proof of ownership in the future. More successful and popular artists might be represented by galleries or have their work sold at auction houses, which would provide better, sometimes digital ‘paper trails’ of work bought and sold. But in the past, even these have been destroyed, lost or even forged. An NFT is the equivalent of this proof of ownership, only it can’t be deleted, copied, misfiled or accidentally have coffee spilt on it because it sits on a vast computer network: the blockchain.

 

So, to clarify: every NFT is unique to the digital asset it is created for. And the reason we’re calling it a ‘digital asset’ and not ‘art’? Because you can create a unique NFT and attach it to any digital file – photographs, music… even Instagram posts or Tweets. Twitter CEO Jack Dorsey just sold his first ever Tweet for $2.9m, which he then donated to charity.

 

 

Canon Ambassador and motorsports photographer Frits van Eldik is just one photographer who is looking to NFTs as a way to change the direction of his work. He recommends that before you even contemplate starting, you need to adopt a change of mindset towards your work. “I am talking to some famous Dutch painters and every week they create something, then sell it and never see it back,” he says. “[as a photographer] You have to get used to this idea.” In his world, where you work for commercial clients or media, you receive a fee for your work and sometimes that fee will include the rights to the photography. Other times he sells prints to motorsport enthusiasts, “but I was told to think bigger – and sell only one, with the rights and everything.” Frits views the selling of unique pieces of digital photography as a natural next step to make money as a photographer, especially when the last twelve months have been incredibly tough for many. It represents a new way to get your work out into the market and with the aspect of compromise comes the promise of a higher selling value. He currently spends a lot of time protecting his rights as an image maker (“You’re never fully in control with original images”), so the ability to sell the image and rights wholesale for a higher price is appealing. “It’s a new way of thinking and a new way of living,” he says.

 

This is when you begin to navigate new parts of the internet that might feel unfamiliar and a bit cryptocurrency-ish. So, for the purposes of our very no-frills example, we’ll reference some services you might already have heard of. But there are lots of different service providers and you can easily research which one is right for you (or even better, go by recommendation).

 

 

Sites that let you create an NFT for your digital art only deal in cryptocurrency, so you’ll need to use a site or app such as Coinbase or Metamask to create a ‘wallet’ and add some funds to it. The wallet will contain your currency but is also where you’ll store any NFTs you make until you sell them. Buying cryptocurrency is a really easy process on both Coinbase and Metamask. Just follow their very straightforward instructions.

 

 

Again, lots of places to create and sell exist, but the most popular marketplaces are OpenSea, Mintable.app and Rarible. Each one will take you step-by-step through the process of creating (sometimes called ‘minting’) your first ‘NFT’d image’. This includes setting your price and any other conditions of sale. For example, much like a fine artist in the real world, you might want to add a 10% royalty on any future sales, in case your art is resold. Getting this bit right is really important, as it essentially sets out your terms for buyers. When you hit the ‘complete’ button, your new NFT is put on sale and will sit in your wallet (alongside any remaining funds) until it’s sold.

 

Like creating a limited run print, turning your work into a unique item to sell on these marketplaces is not free. You are likely to run into something called ‘Gas Fees’, which are charged for processing your transactions (they’re called this because they are a bit like a carbon offsetting charge for the energy used to create your NFT). You may also discover hosting fees for your item, although not all marketplaces charge these. All additional costs should be taken into consideration when you set a price for your work, as they affect how much your collectors will pay overall.

 

Another thing that might sound obvious; make sure the image you wish to sell is truly unique and not already published elsewhere. Your preview image on the sale site must also be low-resolution, so it cannot simply be downloaded and used (make this clear in the description, so any potential buyers know that the image they buy is of high-quality resolution).

 

Right now, lots of artists, makers and photographers are experimenting with NFTs, so don’t expect to be as rich as Beeple by tomorrow lunchtime – even he took a while to build up to the big sale. This is where NFTs are very much like the physical art world – you need to build up demand. Having a following or a fanbase, like Frits and Beeple is really important to your sales and reputation as a photographer or digital artist. That said, while rarity sells, so do collectibles. You don’t have to sell ‘one-offs’ all the time – a limited run of NFTs of the same image for your community can also do really well and create loyalty within your fanbase.

 

Finally, remember, you will also be paid for your art in cryptocurrency. Beeple converted the profit from his sale into $69m USD faster than you can say “cold, hard cash”. You’ll no doubt want to do the same.