August 15, 2022

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Do’s and don’ts to verify your virtual privateness

As Founder and CEO of collaborative creative group Rise Entertainment, Rocky Shi knows the importance...

As Founder and CEO of collaborative creative group Rise Entertainment, Rocky Shi knows the importance of fundamentals in forming a base on which an artistic structure can flourish. In terms of non-fungible tokens (NFTs), the fundamentals underpinning them are the very reasons NFTs are seeing such popularity and the means by which digital artists are enjoying record sales and increased safekeeping of their artwork.

NFT Fundamentals and Their Remarkable Effect on Digital Art

The word “fungible” refers to items so alike they are interchangeable. Rocky Shi notes that right off the bat, the “n” in NFT distinguishes these cryptographic tokens that represent data stored on a blockchain as unique, highly individual creations.

Once registered, or minted by their creator, NFTs can be sold, shared, or consumed but cannot be duplicated. This singularity establishes proof of original ownership and scarcity. Because each NFT has its own signature, it cannot be mistaken for another one; each NFT thus acts as a digital certificate of authenticity for the item it represents.

Kevin McCoy first harnessed true NFT technology with his work, Quantum, created in 2014; his art sold for more than $1.4 million at auction in 2021. Graphic artist Beeple used NFT to mint the third-most-expensive work of art in the world with Everydays, a jpeg collage which sold for $69 million at auction.

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The Floodgates Opened: Digital Art in Demand

At that point, says Rocky Shi, seemingly everyone caught NFT fever, racing to mine digital art and items of all sort—e.g., the very first tweet from Twitter CEO Jack Dorsey converted into a digital NFT and auctioned for $2.9 million; clips of pro basketball game footage; or heavily pixilated cartoon simians. A rogue’s gallery of roughly drawn faces called Cryptopunks, released in batches to underscore their scarcity, became breakout trading stars that took the NFT craze to a fever pitch. Punk sales soared from $350,000 to $500,000, with one selling for nearly $12 million.

Meanwhile, the confluence of technology made it easier for digital artists to display their creations in the virtual marketplace. Built-in security features worked to artists’ advantage, eliminating legal fees to create and enforce copyrights, trademarks, and the hassle of pursuing unpaid royalties.

An Unexpected Bonus: NFTs as Crime Fighters and Watchdogs

The traditional art world has always been fraught with forgeries and false claims of ownership, a common occurrence as works of art changed hands over decades and centuries. Rocky Shi explains that forged art alone is estimated at $6 billion year over year.

In contrast, the security built into NFTs and the blockchain that hosts them crushes any attempts at forgery. The technology also establishes a digital work’s provenance, recording every detail of changes in ownership so no matter how many times an NFT is sold, the original creator will always be recognized and can even be compensated automatically with a royalty upon each sale in perpetuity. The blockchain verifies the transaction took place accurately and completely.

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New Craze, Familiar Behavior

Rocky Shi points out that while the acquisition methods have changed, the current craze to collect NFT digital art is not unlike the enthusiasm people of all ages have long exhibited in the hunt for stamps, sports memorabilia, rare coins, classic cars and other collectibles. Destinations on the blockchain where fans can collect NFT digital art, adopt and raise virtual cats, or buy, build, and bank profits from virtual plots of land are simply another exciting link in the innovation chain.