Vee Finance, a decentralized finance platform, has officially confirmed its hack on Avalanche. On September 20, the hacker managed to transfer funds worth $35 million. In terms of assets, it was 8804.7 ETH (around $26 million) and 213.93 BTC (around $9 million). According to the report, the stablecoin was left untouched. As for the hacker, the report confirms that they have not yet transferred or processed the funds. The team is working to provide more details of the incident. Further,…
The evolution of the blockchain world has been phenomenal, showing no signs of slowing down. An interesting testament to this is the Non-Fungible token. Also known as NFT, it merges decentralization and unique rarity forms to produce a one-of-a-kind token. On the other hand, art is an expression of human creativity and imagination whose value is purely based on viewer opinion rather than the value of inputs used.
It’s rare to have any aspect of cutting-edge technology being heavily dedicated to or even being depicted as art. NFTs appear to usher a change in this.
A Brief on NFTs
A Non-Fungible Token is a cryptographic asset on a blockchain that contains a distinct identification code and metadata. It is therefore distinguishable from any other NFT.
The distinct and unique identification code means it cannot exchange it at parity with any other piece of a token like one would an ETH with another ETH. ETH would be the opposite of NFTs, hence a Fungible asset. This makes Fungible digital assets conducive as a medium of payment and a good measure of wealth thanks to their ease of exchange.
NFTs evolved from the ERC-721 standard in the Ethereum blockchain. They are also extensible, which means two NFTs can be combined to create a third unique NFT, different from its parents.
Why is NFTs Popularity in the Art Industry?
Unlike other blockchain tokens, NFTs have been quite complimentary with the art industry. There are various reasons behind this;
Good Digital Representations of Artwork
Thanks to their unique codes and metadata, they are perfectly suited as digital representations of pieces of artwork. Art, just like NFTs, is unique and distinct from each other.
For instance, there can only be one Mona Lisa painting by Leonardo Da Vinci. It can not be replaced by something else that can be deemed as an exact similar piece. With NFTs having a similar uniqueness, a certain piece of NFT can be the best digital representation of the Mona Lisa painting by its current holder. So if Anyone purchases that specific NFT, they would be in turn purchasing the Mona Lisa painting.
Could Help Tackle Counterfeit Issues.
Thanks to NFTs’, one can’t easily be duped into purchasing a counterfeit piece of art. It is possible thanks to two key reasons.
First, the metadata and identification code of the counterfeit’s NFT won’t be the same as that of the representative of the original art piece. Therefore, one can easily identify the original piece of art by checking its NFTs identification data, even if the counterfeit seems very similar.
Second, NFTs are part of the blockchain technology, hence benefit from the 51% attack rule. This makes them practically immune to forgery. Anyone wishing to change their counterfeit identification code and metadata to become the original has their work cut out. They must have the processing power of more than 50% of all the nodes in the blockchain, which could be up to millions of computers. That’s cryptographically improbable.
Simplifies Art Transactions
Art transactions often require lengthy planning on the best venue, getting the perfect art audience, and contracting an art auctioneer. These take a lot of time and costs to pull off.
NFTs share the same key characteristic of their fungible cryptocurrencies cousins in the blockchain world, decentralization. An artist would thus pull off a trade much easier through NFTs since they remove all intermediaries.
Artists can get to auction their pieces in the digital space on a peer-to-peer basis to their customers. They can also make the trade anytime they feel like, and at the comfort of their homes.
Link Artists With New Markets
Using the current status quo, an artist making an auction in an art gallery in a city like New York only has the clientele to get to the gallery. This is usually a more or less fixed market.
NFTs, on the other hand, do have a global reach and footprint thanks to their digital nature. The call for a bid on an NFT representing a piece of art gets to reach a much wider client base of art enthusiasts. At the same time, technological enthusiasts interested in the decentralized blockchain space also get to be other possible clients. Investors looking to acquire digital assets and expand their wealth portfolio are also an added new market base.
Enable Artists to Continue Benefiting From Art Value Gains
Normally, an artist gets to make one-time earnings from a piece of art they spend painstaking hours or days to make. If the new owner resells the artwork for up to 10 times its value, they have no obligation to pass any of the gains onto the original creator.
An artist using an NFT as a digital representation of their artwork can change this issue. They get to attach stimulation on the NFT, ensuring they receive proceeds anytime the NFT (hence art piece) is resold. Since resells are almost always at a higher price, they continue benefiting from value gains in their work.
The dawn of NFTs has been quite a good thing for artists. The characteristics of NFTs make them quite complementary to the various activities in the art industry.
Their unique digital footprint makes them almost perfect representatives of artwork. At the same time, the underlying blockchain technology creates an almost foolproof system, simplifies transactions while also expanding markets and earnings to users. Such a combination of benefits makes them quite popular in the art industry.
As blockchain adoption continues picking up, NFTs promise to revolutionize the art industry, making it one of the many positives of blockchain technology.