The Authenticity of Virtual Art: Non-Fungible Tokens

Non-fungible tokens to verify the authenticity of virtual art is gaining shape with Christies launching its first such auction.

Non-fungible tokens or NFTs have been around for a few years now. It is a crypto token run on blockchains to represent an asset like art. The concept behind NFTs is to provide a form of evidence of the art’s authenticity. This includes that it is easily verifiable, who owns it and the comfort that everyone can recognize this ownership. NFTs are on the blockchain and just like bitcoin you cannot copy or replace it, that’s where “non-fungible” comes from.

The News

NFTs have come to the attention of a wider audience in the art space. Christies launched on the 25th February its first online auction to offer a stand-alone non-fungible token work of art (NFT). Bids jumped to $1M within 1 hour. The work sold is called Everydays, the first 5000 days made by digital artist Beeple.

During these physically distanced times we have been unable to share and express who we are with objects. Things like cars, art, clothes. This is something we humans do and like doing. Despite tools and communities like the Tapgaze App exist and leverages augmented reality technology to bring virtual art to people’s physical space, connect with artists and to fill this void, we need more. Previewing and creating presence of an illustration in your physical space with augmented reality is just the beginning. This constrain has contributed to trigger a wider adoption of shared online experiences and claim authenticity online through NFTs. The recent rally in crypto of course further fuels the appetite for NFTs.

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The NFT Platforms

NFTs provide an opportunity for creators to by-pass the traditional dealers. This is because artists can mint their NFTs themselves. And buyers like the idea that when they buy NFTs they know they are directly supporting those creators. As NFTs and their platforms evolve, the plethora of cuarting services will increase.

The most popular platforms are Rarible and Open sea, possibly Rarible being the first community-owned NFT marketplace it is also the most popular. Other platforms like Nifty gateway and Superrare tend to be more selective. There are also other NFT platforms that cover niche artwork such as Wax Atomichub that for instance sell trade cards, like old school magic cards that are now insanely valuable. Wax Atomichub does not exclusively trade cards but there is a wide variety of artwork.

The NFT Creation Process

These platforms generally require an artist to have a crypto-currency wallet to pay for transaction fees when creating the NFT. Ineed it is not the easiest of processes to create NFTs yet. To create the NFT, an artist uploads a digital image. In addition provides a name, number of editions to make available, a starting price and then pay gas fees. There is also a verification process of the artist as proof of authenticity. Gas fee is the cost to mint an NFT artwork. To get a transaction through you need to go through a line of blocks. By paying a higher gas fee you can step up the queue. Gas fees fluctuate from $5 and up to $300 as NFTs become more popular. Artists will often wait to mint the NFT at a lower fee. We will not enter the discussion about the environmental implications. However we note that NFTs carry a significant carbon print. This is because the computer has to run a calculation each time you mint.

Smart Contracts

The artwork itself does not get stored in the Etherium blockchain when an artwork is uploaded to create an NFT. Rather an entry in the blockchain ledger is created with the help of smart contracts. Smart contracts consist of a few lines of code and meta-data. It holds data such as the name of the image, url and description. The contract also includes other terms. For example and in the case of Rarible, an artist can choose to use Rarible tokens or create its own. The latter option would generally make sense when an artist is creating the NFTs for a collection of similar artwork. The artist can also establish a royalty payable to the artist when an artwork is resold, currently standardized at 10%.

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    Growing Demand

    There is of course still a lot of work to be done but NFTs have captured people’s attention. At the beginning of 2020 a secondary market started to develop and these days it often exhibits aggressive bids. Sales quadrupled in 2020 to $450M. Nyan Cat uploaded in April 2011 recently sold for $560M. CryptoPunks, a block chain based market for pixelated headshots, was released in June 2017. It was one of the first non-fungible token (NFT) on the Ethereum blockchain. It had over $15M in sales in a single day. NBA Top Shots most popular sold over $200M in the past month. Banksy-style NFTs netted 900K on the open sea marketplace, a peer-to-peer market place for rare digital items and crypto collectibles.

    There are different views about the buyers persona. One may argue the majority of people that buy NFTs are those that also buy crypto-currency. NFTs is really a bet in digital property. Indeed this may justify why Christies will accept Ether as a form of payment for the auction of Beeple’s work.

     

    Sharing Your Digital Art In Augmented Reality

    If you are an exhibitor like a gallery or a museum, or an artist and have physical or digital wall art you want to share with the Tapgaze community we encourage you to sign up and download the app. You can create your frame in 3D and attach the image to this 3D model in a few easy steps with Tapgaze Creator. This will generate the digital twin of your canvas art. At the click of a button, you upload your 3D artwork to your catalogue for everyone to interact with it.

    Tapgaze is a SaaS mobile app and runs in most iOS devices. It is for artists and galleries to display their art in augmented reality. Any Tapgaze member can visualize, display and interact with your 3D digital twin in their physical space and in augmented reality.

    If you are undecided, let’s chat and clear your questions 🙂

    Our Blog Your Blog

    If you have been reading our blog, you know we tend to write about augmented reality, 3D art and the Tapgaze App. Writing about NFTs is a bit outside this remit. However we consider Tapgaze an art community that pioneers the use of new technologies to enjoy art and connect with like-minded members. We think NFTs can be a driver to the growth of digital art experiences and we can benefit from these discussions. We write this blog to keep an open dialogue with our community and we are always keen to hear your thoughts, would you rather we should focus writing mainly on AR?