Blockchain technology is continuously shining light on what it has to offer the world. From the highly talked about cryptocurrencies such as Bitcoin (BTC) to the booming decentralized finance (DeFi) sector, blockchain has stamped its authority in modern society thanks to some of the solutions it offers, like immutable storage.
You may be wondering what is crypto or digital art? It can be viewed as the new kid on the block as this sector is gaining traction because art pieces are being stored in distributed or decentralized ledgers.
Digital artists are embracing blockchain technology in the storage of their art pieces because it avails scarcity and transparency. They are adopting NFT marketplaces like Nifty Gateway or OpenSea to boost their crypto artworks. For example, a digital artist called Beeple recently sold crypto art worth more than one million USD and sales had skyrocketed to $582,000 in the first five minutes of trading.
Other crypto art platforms are also welcoming blockchain to share and store cryptographic certificates of provenance and origin. Therefore, making the art pieces trustworthy and tamper-proof.
How is crypto art different from the traditional one?
Crypto art is revolutionizing the art market given that it embraces tokenization compared to the conventional art. Tokenization utilizes blockchain technology in the issuance of a unique set of numbers called a digital token, which serves as a digital representation for a physical asset. These digital tokens are unique for they cannot be forged and copied and the most commonly used in crypto art are non-fungible tokens (NFTs).
An NFT is different from a typical crypto token because of fungibility. A fungible token can be exchanged for another, whereas a non-fungible token (NFT) cannot be based on its finite nature. NFTs are also exceptional as they are non-divisible because they have to be bought in their entirety. For cryptocurrencies like Bitcoin, you can buy a fraction of them, but this is impossible with an NFT.
This sounds interesting, right? The engine behind NFTs is distributed ledger technology (DLT), which boosts the integrity and authenticity of crypto art pieces. Ethereum’s ERC-721 protocol is highly favored in the issuance, possession, and trading of unique digital tokens, and the crypto art field is not an exemption when adopting them.
This cutting-edge technology gives crypto art an upper hand compared to traditional art because intermediaries are eliminated. Furthermore, digital artists are guaranteed ownership of their artwork based on the unique digital tokens issued. Tokenization is, therefore, a game-changer in crypto art as this might be the norm in the near future as this sector continues to mature and go mainstream.
Crypto art is being viewed as a safe-haven asset
The coronavirus (Covid-19) pandemic has wreaked havoc across the globe, and in the process, made an economic turmoil inevitable. You may have heard that governments are printing more money as a way to bail out their citizens.
This initiative is a double-sided sword because it makes paper money or fiat currency lose its value. As a result, investors have been made to pursue assets that are hedges against inflation. Crypto art is being embraced as a safe-haven based on its store of value capabilities explaining why this field is gaining traction.
For instance, crypto art being traded as ERC-721 non-fungible tokens (NFT) is making airwaves based on the record-smashing sales. September 2020 set the ball rolling after a crypto art piece dubbed “Matt Kane’s Right Place & Right Time” on Async.art was sold for more than $100,000.
Later on, the sale of a second crypto art piece in November 2020 served as the icing on the cake as it bagged more than $140,000.
DappRadar, a decentralized app tracking platform, reported at the time: “Now, under three months later, a second piece has raised over $140,000. A programmable version of a scene depicting Vitalik Buterin of Ethereum dressed like a medieval harlequin leaning against a velvet chair made records this weekend when an NFT representation sold for 260 ETH or over $141,000 at the time of writing.”
We can all attest that the amount paid for the two crypto art pieces is substantial. So by now, we may be asking are investors getting value for money?
It looks like investors are willing to pay an arm and a leg to get their hands on these unique crypto artworks. For instance, “Matt Kane’s Right Place & Right Time” bought for at least $100,000, consists of 24 programmable layers synchronized with Bitcoin’s price volatility in the last 24 hours. Furthermore, a new image is produced daily.
The second art piece costing more than $140,000 uses a programmable technology called layering, and it remakes itself daily. So next time you intend to purchase an artwork, consider getting a crypto art piece because its authenticity is guaranteed by blockchain technology.