We have the invention and evolution of technology to thank for some of humanity’s most significant advances. The invention of the aeroplane in 1903, the computer in 1937, and the internet in 1974 all completely changed how we live our everyday lives. As technology advances, how can the likes of Web3, the metaverse, blockchain and DeFi change the future of fintech?
Bringing this month’s focus on innovative technologies to a close, The Fintech Times is looking into non-fungible tokens (NFTs). We asked a number of industry experts how NFTs have altered the relationship between artists and their art.
‘The relationship between artists, collectors, and admirers will never be the same’
Colin Johnson is the CEO and co-founder of Freeport, a platform bringing fine art investment on-chain. Johnson explains how NFTs have drastically altered the relationship of art ownership.
“The relationship between artists, collectors, and admirers will never be the same. NFTs allow for a few important benefits to living artists, including the ability to generate a provably limited number of editions, to programmatically receive ongoing payments when art is resold, and to identify past customers instantly.
“That means you can, for example, only allow fans who purchased one piece of art to purchase another. Or to airdrop a limited edition piece to those same persistent collectors. Or even to gate access to a community discussion based upon someone holding one of your NFTs.
“Now compare that to classic art sales, where the art effectively enters a black hole after the initial purchase. Artists have far more control over the lifecycle of their art and how the community engages with it, while also gaining the ability to connect with their collectors like never before.
“Collectors, on the other hand, get to flex their ownership in a verifiable way. The best example is that Twitter now allows users to post verified NFTs as their profile pictures, immediately providing social clout to the owner.”
‘We have yet to figure out NFTs’ influence on the ownership of physical art’
Jack Lu is the CEO and founder of Bounce.Finance, a Pantera-backed decentralised auction platform built on Ethereum that enables users to buy and sell various crypto assets through interactive auctions. Lu discusses the difference between owning physical and digital art.
“When it comes to art, it’s important to differentiate between digital art and traditional physical art. While owning a piece of digital art is like holding money in a bank account, owning physical art is like having a handful of cash.
“This is because, thanks to the nature of blockchain technology, NFT ownership is provable on-chain, so that, much in the same way that you can log into a banking app and see how much money you have in your account, you can look in your blockchain wallet and see the pieces of digital art you own. Even if someone stole them, you could prove that you have ownership rights over them.
“But when it comes to physical art, this record of ownership is less clear. You need to store it physically, just like cash. And in the same way you can prove that you have $100 dollars in cash, but if someone takes it from you, you no longer own it. A bank account cannot track or enhance your ownership of cash. It can only prove that you deposited or withdrew from it.
“Therefore, it means that we have yet to figure out NFTs’ influence on the ownership of physical art. But in the meantime, we know that NFTs can facilitate the transfer of ownership for physical art, especially in auction settings, thanks to the contingency and automatic execution features of smart contracts.
‘This mechanism of digital ownership is a long-term win for all’
Nick Rose Ntertsas is the CEO and co-founder of Ethernity (ethernity.io), a marketplace for fully licensed NFTs from globally recognised brands and iconic figures. He explains how NFTs have significantly altered the digital ownership of art in a positive way:
“NFTs have created access to art ownership that the broader public didn’t have in the pre-NFT era. It has significantly expanded the pool of potential buyers and opportunities for profit for artists on all ends of the spectrum.
“Blockchain technology also offers a more secure avenue for authenticating artwork than traditional methods. This mechanism of digital ownership is a long-term win for all.”
‘NFTs have revolutionised the relationship of art ownership’
Alex Fleseriu, CEO and co-founder at digital art marketplace Exchange.Art, concludes by breaking down the different ways in which NFTs have had an impact on the ownership of digital art.
“Verifiable ownership: NFTs allow for a verifiable and secure way of proving ownership of digital artwork. This is done through blockchain technology, which makes it possible to trace the history of ownership and prevent fraud or unauthorised reproductions.
“Decentralised ownership: NFTs enable decentralised ownership, meaning that anyone with an internet connection can purchase and own a piece of digital art. This eliminates the need for intermediaries like galleries or auction houses and allows artists to sell directly to their audience.
“Increased value: NFTs have the potential to increase the value of digital art by adding scarcity and uniqueness to it. This is because each NFT is one-of-a-kind and cannot be replicated, which makes it more valuable and collectable.
“Royalties: NFTs can also include royalty mechanisms: this means that the artist earns a percentage of the resale price each time someone resells the artwork. This also creates a more sustainable and equitable model of ownership, where artists can continue to benefit from their work even after it has been sold.
“Overall, NFTs have revolutionised the relationship of art ownership by making it more transparent, decentralised, and equitable for artists and collectors alike.”
‘NFTs have made it possible for everyone to own original work’
Eduardo Ibañez is the CEO of LIFE Rewards, an online booking platform that recently launched, offering hotel reservations and experiences that can be digitized and converted into tradable, collectable NFTs. Ibañez discusses how NFTs have made art more accessible and easier for artists to share.
“Art ownership was previously reserved to a select group of people with both money and access, but NFTs have made it possible for everyone to own original work. This extends to works that are too costly for most people to afford individually, as buyers can fractionally invest in creators’ pieces.
“Being digital assets, NFTs also enable owners to share their works easily on social media and even carry them in their wallets. This helps to legitimise digital art and offers new artists an easy way to share their inspiration.”