What is Selling Art as an NFT
NFTs are the hot topic in the art news realm these days. So, let’s take a deeper look at what is selling art as an NFT and answer some key questions.
Let’s start at the very beginning…
NFT is an acronym for a Non Fungible Token, a unique digital asset that cannot be copied or substituted and is recorded on a blockchain, a sort of digital ledger, which acts as a certification of authenticity and proof of ownership. NFTs can only be purchased using cryptocurrencies.
All of that still sounds like gobbledeegook so here’s what it might look like for an artist;
The artist produces a digital artwork and offers it for sale on an NFT marketplace, more on that later. The buyer of the artwork then pays for it in cryptocurrency and receives the digital file. This exchange gives the buyer full ownership of the file but not the copyright or distribution rights of the artwork. This allows the artist to use the image to print on items of clothing or publish it as an illustration in a book for instance but they can’t replicate the file to sell as another NFT
First you must have a wallet on an NFT platform like OpenSea and you must purchase an amount of Cryptocurrency so that you can essential pay for listing the artwork on the platform in order to sell it.
Next you must ‘Mint’ the artwork. In other words, upload the file to the site and pay the ‘Gas’ fee which is akin to a foreign exchange fee. During this Minting stage you will set up the metadata for the file, set the price of the NFT and also set your royalty rate which is usually 5-10% of the resale price. Royalties will be received if the work is resold by the original buyer and on any sales that follow.
Once this is all complete, you can list the NFT for sale. When sold, your chosen platform will take a fee for the sale, approx. 2.5% of the selling price.
In this hypothetical, your NFT is now for sale with the potential to continue generating revenue each time it is resold while you maintain copyright and distribution rights over the image to with as you please…except for minting an identical NFT using the same image. Sounds great, right!?
Right but… Resales are dependent on demand and hype which is how NFTs like Beeple’s go viral and make large amounts of money. Also, while there are protections in place as part of the NFT ecosystem the market is still very new and unregulated. This along with the volatile nature of cryptocurrencies makes it risk heavy and partial to scams just like the early inception of the online art market back in the early 2000s.
In a genuine transaction, there is little on the line except the outlay to list the art for sale but in a scam offer you could have money stolen, images stolen or even your identity stolen.
It’s these scam offers that you have most likely come across recently as there seems to be a significant influx of them.
In short, these scammers will contact you by email or via comments/messages on social platforms with a messages that reads something like this;
“Hi! Your work is wonderful. I am really interested in purchasing a number of your works as NFTs. I will pay €6,000 per artwork.”
They might even specify particular artworks and will help you to understand how to mint the artworks, even sending links to NFT sites.
It’s best to resist the temptation to respond to the initial query and NEVER click a link sent to you by someone you don’t know.
Take the time to learn the market so that you fully understand how it works and how to make it work for you
Mint your artworks independently, not in response to a cold, unsolicited enquiry
When converting physical artworks to NFTs be sure to understand how that changes the future exhibition and sales opportunities for the original artwork. From my research, this seems like a bit of a grey area.
Be familiar enough with the market to be able to price your work appropriately to see the best returns.
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