Why getting into the NFT art game could be strategic?
NFTs have caused a stir. One that has made the world turn its attention towards blockchain and Web3. Non-Fungible Tokens (NFTs) have created, for the very first time, the concept of online scarcity. The ability to actually own something, plus the art involved, have allowed for this scarcity to come about. What truly matters is the token, a certificate of ownership. That’s why NFTs are quite the revolutionary phenomenon. Art, being the main sector that is affected by this technology, is what’s driving NFTs forward. Specifically, visual arts.
NFTs revolutionize what one thinks about property. Digital property used to be a lot more abstract. With NFTs, not anymore. This is why it could be such a strategic investment, as owning property is a good way to build wealth. So as society becomes more digitalized, and with the appearance, this could become a way to build and protect wealth. Entering early could just mean that you dip your toes in Web3 and the metaverse, to start understanding the underlying economy. What better way do it in the key driver of NFT growth: digital art.
There are projections that predict that the NFT market will grow $147 billion in the period between 2022-2026, with a yearly growth of just over 30%. The size and potential of the market, plus understanding it’s key forces for growth are very important things to keep in mind. And they just highlight the strategic importance that art NFTs have and will continue to have.
What this new frontier brings is another disruption that empowers people. NFT Art brings the possibility of forging a closer connection with an artist. That creator, all of a sudden, can charge fees for every transaction of his or her art. Traditional gatekeepers are not as vital, although one could argue that new ones always emerge.
The possibility of forging a closer connection with the creator of the artwork has also opened up possibilities for brands. They now have realized that they can create a more fulfilling brand engagement experience, and have a more personal connection with customers. Many NFT market pundits and analysts do say that it is artists and brands which will push growth for NFTs.
Videogames, which requires artistic input, are already being revolutionized by NFTs. Because people can now engage in what is called P2E gaming (play-to-earn). Your NFT can be used inside a videogame, and as you play that blockchain-based videogame you get rewarded in tokens. Those tokens can be exchanged within the Ethereum blockchain, so it’s actual money what you are earning.
Generally speaking, the creative industry has found a powerful ally to protect it’s property rights, as well as be able to get more money from that intellectual property. Not only that, but those who buy into the project can actually make some money from their initial investment. Something that was quite hard to do in Web 2.0. It is no wonder then, that the creative industry —especially the arts— have taken ownership of this first stage of NFT growth and the inception of Web3.
So what now?
It is still quite early in this ecosystem. And getting in early is quite a strategic thing to do in anything that holds promise to change so much at a fundamental level.
There will be a time when NFTs are no longer primarily used as art. Indeed, some of the projected uses are tokenization of videos and music, contracts, health records, documents, IDs, votes and certificates of authenticity. This could be a time where everyone that got in early reaps great rewards.
Whatever happens with the speculative environment that has enveloped Web3, it’s quite clear that NFTs are here to stay. After the dot-com bubble burst, it left those that were truly delivering value. So if you are thinking of making an NFT investment, think of the dot-com bubble precedent. Lots of promise that has to be separated from the speculation. That’s the way to go about this. So if you are able to separate speculation from value, and commit to an investment for the long-term, you’ll be alright.
Doing your own research (DYOR) is very important in this space, so that you do not get into a project or collection that you don’t fully understand. Sometimes the NFT space looks to induce FOMO (Fear Of Missing Out), and investing under this feeling is not advisable at all. Always make sure you understand the value proposition of the NFT or, at the very least, that you like the art. A good way to start is to look at NFT art galleries, like SOPRG, who sell artwork by real artists who have looked to venture into the NFT space.
Investing in digital assets today means, almost exclusively, investing in NFT art. If you are smart about it, there could a wide array of possibilities to create value —even revenue— around that art. As it is, experiences can be created through NFTs. Licensing can be arranged through smart contracts. All while the metaverse is inching closer and closer. Which is when things will start to be appreciated in a purely digital way.
Something as simple as attaching a token to a JPG file has completely revolutionized art, and the way people think of property. It’s up to the people to decide what can be done with this new technology.