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How are NFTs set to change the traditional art market?

How are NFTs set to change the traditional art market?

On the whole, NFTs have made a positive impact on the art market, diversifying and modifying the way the trade of art takes place once and for all. Although NFTs are not a new art form, they have been utilised as a financial instrument to facilitate the transaction of digital art. The NFT marketplace can be seen as an evolution of the traditional art market, making up for what the art market has always lacked in terms of transparency, accessibility and artist benefits. This article will detail the ways in which NFTs are shaking up the traditional art market and the benefits of NFTs over physical art.

 

Firstly, to understand what an NFT is. 

An NFT is a unique digital asset that can be traded and authenticated on the blockchain. NFTs bring authenticity with certified ownership as the  blockchain makes it easy to verify ownership of an NFT, making them an extremely useful way for artists, influencers, and musicians to sell versions of their work to a large base of consumers online. 

Additionally, the NFT contracts can have a built-in feature which automatically attribute original creators with royalties off the continued resale of their works, an area the traditional art market has historically not catered for. There is no need for artists to go through galleries, dealers and auction houses to sell their works as the online platform has low barriers for entry meaning anyone can create and sell their own works. Many believe that NFTs have the potential to transform the art market in not only the way art is bought and sold, but in the way it is viewed, stored and appreciated through decentralisation to the traditional norms of the market. 

NFTs draw on the collectibles market as each NFT represents ownership of one particular digital item (be that a photo, original art or sound file). They are non-fungible, so each NFT is different, however,  NFTs can still be minted in “limited editions” allowing one digital asset to be “owned” by numerous collectors. 

The NFT marketplace can be seen as an evolution of the traditional art marketplace, shifting the balance of power to benefit artists and creators in a market which has traditionally been known for its lack of transparency leading to corruption and elitism. Artists themselves have access to a global market, increased knowledge and transparency of their own deals and attributed royalties on all their creations and resales. Moreover, buyers can verify the authenticity of sellers and compare prices with ease, a simple process often complicated in the trade of art traditionally. 

The combination of ownership, scarcity and artists’ greater control of their assets has seen digital art be collected and traded like non-digital artworks.

The development of NFTs creates promise of the art market falling in line and becoming more transparent. NFTs can be seen as just another type of art commodity being brought to the market and therefore are an expansion and evolution of the art market, opening the door for art  to move across to the digital stage. 

All this considered, this is not to say there is no crossover between the traditional art market and the NFT marketplace…

Artists can also mint physical works of art as NFTs by processes as simple as taking a photograph. Creating both a physical and digital version of the work to be traded separately or together. It’s to create a digital bundle of secure data about that work, including a record of its ownership, instructions about its care and display, and speculation about how much money should go to the artist when it is resold. Alternatively, it allows artists to retain a copy of their work in the form of an NFT if they do sell the physical piece. 

The move to NFTs does not have to involve a full scale shift from the physical. There are many examples of artists such as Damien Hirst, Beeple and singer Grimes who take advantage of both the physical and online versions of the art market. Learning from their examples, artists can see NFTs as a means to expand the reach of their art to a global, online market and gaining monetary benefits whilst still physically creating pieces they love. Transitioning to digital art is not as final or scary as it may seem. For peace of mind and ease, artists can also go through an NFT agency to avoid scams and other issues newcomers to the market could be unaware of. 

These are just a few of the differences between the NFT market and the art market which are set to impact the way art is traded forever. Bringing art into the digital age has decentralised the power of the traditional market back to the creators allowing for ease and safety of transactions and trade. 

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