The world of art and collectibles has gone the decentralized way, thanks to non-fungible tokens (NFTs) which are making it possible.
A quick glance at the space looks like it is already crowded with a lot of interesting projects, some of which we have featured in a previous post.
I would disagree. In this case, crowded is relative, and we are just at the beginning of this amazing evolution.
In this post, we will look at the world of art and collectibles and how the current NFT space fits right into this culture and how it is likely going to disrupt it – in a big way!
The Art of Art
People who invest in art and collectibles generally look at such investments in two ways:
- A financial investment
- An emotional investment
While an emotional connection supersedes the financial decision, another metric also comes into play – community.
Like anything else that has an emotional connection, the world of art and collectibles has strong communities and this dynamic is seen when you look at art clubs, museums, art conferences etc – this is all art at play.
NFTs offer a lot of possibilities and similarities to this ‘offline world.’ You could almost say, they were ‘the spark’ that was needed to digitize the art and collectibles space in a truly authentic way.
NFTs are helping artists build high-quality collectibles, leverage of community, and connection of experiences through interesting storytelling approaches.
Probably, the only thing that comes even remotely close to this world is gaming.
The Traditional Art World is Ready to Play
For a long time, traditional artists have remained offline when it comes to their artistic expressions and creations – quite understandly so when you consider that digital art can be copied and distributed easily and quite efficiently.
NFTs however are changing this as more established and iconic artists have entered the space and are creating high-worth art pieces, and making money out of it.
The ability to create unique art pieces, enable bidding, and the ability to digitally pay and transfer ownership of these unique art pieces makes it quite attractive to these artists, and as a result, they are ready to play.
Collectors and Art Lovers are Playing
One of the most successful collectibles marketplace so far is the NBA Top Shot – an officially licensed product of the NBA. Users can own a piece of NBA action known as ‘moments’ – an NBA highlight that has become a digital collectible and can be held onto forever.
A moment is essentially an NFT which acts as a digital certificate on the blockchain that gives the asset holder authenticity and ownership over the asset.
Here is a classic example of a moment and its ownership:
What gives a moment value?
A lot of people would probably ask – ‘why would I pay for a digital piece of art that I can make a copy of?’
The above question can be asked in a slightly different way – ‘Why would I buy a sports card that I can print out digitally from my computer?’
The answer lies in what people perceive to be proof of:
These 3 aspects give these digital pieces of art and collectibles value – both digital and physical – and NFTs simply help to set and verify the individuality of each of the art pieces or collectibles.
NBA Top Shot is just one example of what is happening in this space. We have previously highlighted other platforms where you can buy and sell similar art pieces here.
Why it is Still Early
Experiences from art collectors on these platforms are providing a glimpse into the future of this space and where it is so far in the stream of time.
According to Mark Cuban, a savvy entrepreneur and the owner of Dallas Mavericks:
“Old Schoolers say that you need to have something “tangible” in order for there to be value and we will deal with fraud after the fact. If we can touch it, see it or hear it, it is real and can have value. They begrudgingly realized there was value in digital music over CDs.
The New Generation that has grown up in a digital world has known their entire lives that what has been of greatest value to them has been digital.
With digital goods, I still have the same sense of ownership as with a physical good, and again the value is still set by supply and demand, but I have none of the hassles beyond remembering my passwords and dealing with wallets. Both of which are getting easier and easier.
And the funny part, if you’re an old school physical good owner that wants to share what they own with someone else, what do they do? They take a digital picture of the item and send it or the link…..”
– Mark Cuban
One savvy, forward-thinking investor called Jonathan Bales, the co-founder of FantasyLabs – a Mark-Cuban-backed company, recently purchased a piece for $35, 000 as an NFT, and said this:
“There’s something very interesting going on in this space, specifically in regards to art and collectibles.
Why do people believe physical trading cards hold value? I’m interested in sports trading cards from two perspectives: as “fine art” at the high end and as a “player stock market” across the entire industry.
In both cases, when you really dig into it, you inevitably start to ask “Why do these things need to exist in physical form?”
The answer: they don’t. Gold is to Bitcoin as physical trading cards are to NFTs.”
– Co-Founder, FantasyLabs
Jonathan lists 3 questions that everybody should ask if you are looking for the next big thing:
- Wha are kids (high school/college-age) interested in?
- Which things exist physically will move digital?
- How will democratization of ownership change the investment landscape?
The exploding user-base and value of NFTs is a sign that it is still early. The fact that sites like NBA Top Shot are still in beta is evidence of just how early we are in the NFT space.
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