NFTs are going viral! Back in 2017, CryptoKitties launched as a digital trading game where you can breed your own unique cats on the cryptocurrency platform Ethereum and was one of the first NFTs. Fast forward to 2021, an NFT of a collage of 5,000 photos by artist Beeple sold for $69 million!
The popularity of cryptocurrencies has spiked as more blockchain uses have become available, and NFTs are an exciting new way for digital artists to monetize their content. So let’s take a look at what an NFT is, how it works, and what this means beyond the world of cryptocurrency.
What Does NFT Mean?
NFT is an acronym for Non-fungible Token. First of all, what does it mean to be non-fungible?
Most cryptocurrencies are fungible, meaning you can exchange one with another identical one with the same value. It’s very similar to physical currency systems. A one-dollar bill in the United States has the same value as every other one-dollar bill.
Being non-fungible means that each piece is unique and has its own value, meaning that no two NFTs are the same and you can’t trade it for another of the same. Think of it like sports trading cards or Pokemon cards. An NFT might be one-of-a-kind, or it might be like a trading card where a limited number were produced. However, NFTs are still linked to the blockchain, just like other cryptocurrencies, so there is a record of the purchase.
What Is an NFT?
Now that we understand what non-fungible means, let’s talk about the token part. A Non-fungible Token points to a unique piece of digital content, and when you buy one, the NFT acts as a certificate of authenticity for that content. This includes videos, GIFs, tweets, art, photographs, video games, virtual real estate, and more. Some popular pieces of content that have become NFTs are the Nyan Cat GIF that sold for about $590,000, a photo from Muhammad Ali’s “Fight of the Century”, and Jack Dorsey’s (the CEO of Twitter’s) first tweet with bids as high as $2.5 million.
But people copy art online all the time, and someone can post the Nyan Cat GIF without buying the NFT, so what’s the point? It gets a bit tricky here, but the difference is that while the artist may keep copyright and reproduction rights, you have a token that certifies your purchase of the NFT. For example, you can get your hands on a copy of Picasso’s “The Old Guitarist,” but having a token for it has a much higher value than the copy.
What Do NFTs Mean to the Art World?
If you’re an artist, this is a new way for you to get your art out into the (digital) world and potentially make a profit — but we’ll have more on that later. If you’re a buyer, an NFT is another way to support the artists you like or start a new collection. Some popular NFTs have sold for a shocking amount of money, but there’s limited research on everyday artists and how much you can expect to spend.
Now that you know what an NFT is, are you wondering how to get started? Stay tuned for our next article, where we discuss how to make and sell your own NFTs. In the meantime, check out Bankrate’s quick NFT guide that provides readers with information on NFTs, how to buy them, and the risks to keep in mind.
Ring says:
As a long-time customer who loves everything about Daz Studio, I am disappointed to see this article and I’m asking you to rethink publishing content that encourages artists to sell their work as NFTs.
Beyond the environmental concerns (which appear to be easy for people to talk themselves out of taking seriously), in its current form this is an exploitative business model that makes the massive success and income of established artists look easy while glossing over the need to invest significant money up front for no guaranteed return. There’s a very good chance a smaller artist will end up in the red after paying unpredictable fees to mint their work and failing to sell.
Additionally, it is a completely unregulated field and scammers are finding new ways to exploit it, affecting people who buy and sell NFTs as well as those of us who want nothing to do with it.
It’s possible something like NFTs could be great for artists in the future. I kept an open mind when I first saw it. But in its current form this is irresponsible and unsustainable. A few people are going to cash out big, and more will end up with nothing.
If you go all in on this I can’t ask people to give your software a chance. I would have to make a lot of hard choices about my own support. Please reconsider.
The Admin says:
These are all completely valid points to bring up! We agree that there need to be more regulations to prevent scams like this — and this only scratches the surface — from happening. And if cryptocurrencies and blockchain uses grow even more, the environmental impact is terrifying if nothing is done to minimize its impact. This article is simply an introduction to NFTs and what the hype is all about, and we plan to publish articles that are informative and help others to decide if this is something they want to take part in.
Nath says:
How can I protect my artworks in the DAZ Gallery from having NFTs sold for them by someone who isn’t me (assuming anyone would want to LOL) ? As an artist, I have no way to do so as far as I understand NFTs. Anyone can monetize anyone’s work, and the artist is in essence scr*wed.
The Admin says:
Great question. There are several articles on the subject, most of which involve using copyright laws. It’s a developing conversation, so here’s one article on the subject that says:
Nelson M. Rosario, an American copyright attorney who has already begun to field work in the NFT world, said that under US copyright law there is “recourse for a person who feels their work has been NFT’d without their permission,” but that “the intellectual property considerations get very complex very quickly.”
Chaosophia says:
OK, so clicking on one of these “NTFs” The price is upwards around(.01) which gives a $513 buy in. Seriously. You expect hobby artists to pay $513 for a copy of an image? Maybe I missed something here, but can you explain this?
The Admin says:
For sure. NFTs are more for collectors, some of which are willing to pay that much or more for NFT art. Artists can choose to sell their own NFTs and use it as another avenue for their work, but it does require an initial investment if they don’t already own cryptocurrency.
H says:
Please clarify how this relates to DAZ software and content. Are you saying people can create an image with DAZ and sell it on the blockchain? (I still don’t understand why this works….), or does it mean that there will be limited copies of Victoria 9, so there will be a bidding war to purchase her?
The Admin says:
Daz has NFTs available on OpenSea, but it doesn’t affect the assets in our Daz Store. So don’t worry, you’ll have access to all of the new assets without fear of scarcity.
Tsarist says:
I think Ring makes some good points, but I see this somewhat differently.
I had been seeking out information on NFTs for about a month after hearing about them on NPR (National Public Radio). I found information, but really didn’t trust or even understand the various marketplaces that existed.
Now, if Daz is getting behind this, I’m en couraged & excited. Well, cautiously excited.
I really did take to heart what Ring was saying. How some will cash out big & others left in the red. When they were closing down a lot of our good TV & Radio jobs, they told us there would be all this work for us on the Internet & being trained pros with experience, we’d be able to write our own ticket. What we found were scams & unworkable situation like YouTube, Patreon and a host of other schemes that only work if you’re rich or famous or lucky enough to go “viral.” What I want is a step by step “how to do it” guide. ABCD, etc. What to do on Monday,Tuesday, etc. How do I make a living doing this? I don’t need to make millions, but just enough to make the bills. I will back this 1000% if I can get myself & other artists I know in “real life” out of the dead end existence and creating on a daily basis. I want “Bread & Butter” solutions, not fuzzy thinking. It’s finally time to make the promise of internet a reality.
The Admin says:
As with all new ventures, we encourage everyone to do their own research and decide if it’s worth it for them!
jaxprog says:
There are no guarantees in life. There are consequences to decisions and actions. Just because human beings can’t escape risk, doesn’t mean NFT’s should be banned, regulated or forced into egalitarian square where everyone should win and no one loses. That’s not how life works. Life is messy.
What can be done, is to allow NFT’s to flourish, and allow the system to grow, develop, learn and put in place its own safeguards as opposed to allowing people who have no idea what this new system is and what it does or how the system benefits those who use it, to come in and ransack it with regulations and self imposed righteousness resulting in loss of value, wealth and opportunity.
I say Live and Let Live. Let NFT system show us it merits and we can decide for ourselves as individuals if it’s something worth doing.
Missy Reno Smith says:
https://ethereum.org/en/nft/#environmental-impact-nfts
Concerning the environmental issues, here is a link to Ethereum’s article about their carbon footprint and their plans to reduce it drastically in the next few years by introducing staking into the process (they made the first steps toward this in December). I am in no way an expert on this subject, just providing a link that may help others. I personally found the comparison to Visa enlightening (be sure to read the footnotes, just click “more on energy estimates”). I wonder if companies like Visa are doing as much as Ethereum to reduce the carbon footprint related to their transactions. We will of course need to wait and see what actually happens with Ethereum’s changes once they are fully implemented.
Security of the NFTs is one of my other concerns as I was just reading an article, https://www.theverge.com/2021/3/15/22331818/nifty-gateway-hack-steal-nfts-credit-card , about some people that had their wallets hacked, their NFTs were sold and there was apparently no recourse for them. Nifty Gateway stated that the users that were hacked had not set up the secondary security features for signing into their accounts. This is surely a good reminder to always do this but it is unacceptable to me that there should be no way to fix the situation. It’s important to find the most secure wallet if you have a very valuable collection of NFTs I suppose so I’m currently reading about the options for more secure wallets including hardware wallets like D’CENT Wallet.
I don’t know if NFTs are right for me, the jury is still out on this but I am exploring the option.
Tamara says:
So….on the NFTs available from Daz & the Shudu ones, what does the unlock feature get you? Some include an OBJ file or a MD file or extra Daz assets used to make the image. Does that mean you get some sort of license to use those files? How do we know which assets in particular are included?
The Admin says:
The product description on OpenSea will tell you what the unlockable content is.
H says:
If, as I understand it, NFTs are original works of art with only one copy available, I would think that the major money making would be in the reselling over and over of the NFT. The original artist would only earn from selling the original the first time. Most of the profit making would be between collectors without the artist involved at all anymore. Do I have this right?
The Admin says:
NFT marketplaces allow you to set a royalty percentage so you’ll receive a portion of what it sells for every time it’s passed from collector to collector.
H says:
That’s great!
ArkadySkies says:
Not quite. The artwork isn’t on the blockchain. It is merely a pointer to an artwork – basically like an email receipt with a hyperlink to digital content, except blockchain’s nature means the environmental toll of processing the transactions is extreme and at any moment the image may no longer be hosted at that location (examples: someone shuts down their website or decides to free up space by deleting files of no use to them anymore, or someone deletes their artwork because a scammer used it for NFTs). The TOKEN is unique, but anyone can copy or download the image and redistribute it, or create new “unique” tokens like that twitter bot did. It may not even be illegal since the art itself is never technically sold. The pointer goes one way: you can’t move the artwork from it’s location without breaking the token’s link (though, unless you own the location it’s hosted, you can’t move it anyway, just copy or download it). If you download the image, your token doesn’t point to your copy.
If I’ve learned anything in my years online: all links die in the end.
Ingrid says:
I am very interested to see how it goes, I think they need to work out the environment issues before I can get all the way behind it. Most things starting out are not efficient though, I suspect blockchain will evolve if it’s truly useful, as it seems to be.
Cm says:
A much better description of what you are selling here would be appreciated. No interest in anything related to cryptocurrency.
The Admin says:
We’re working on additional posts to explain just that! No worries if it’s not your cup of tea.
Thom says:
I continue to research the NFT realm on a daily basis. I have tested out various top marketplaces and find a couple more to my liking in user-experience etc. Yes on all the concerns above especially security and copyright issues. Though on the © front, nearly all any of us can do is put our watermark/siggy © somewhere and hope it keeps the honest… honest. Nearly all of us digital-doodlers have images all over the place on social media, pinterest, or blogs that dinshonest peeps could grab and somehow attempt to call there own. I do like the NFT idea, and will continue to research and tread carefully.
Joel Lovell says:
Just hope all this NFT effort stays out of the way of what I come here for, 3D content. Hard enough to navigate through all the games your discounting and sales makes you go through, now the site has ads we cant disable for these weird NFT “art”, that I have absolutely no interest in. Please stay focused on 3D assets, especially the things the Epic Megagrant helps us do, and if you really want to make money for DAZ and your content creators find a way to expose the content to Unity and Unreal markets.
The Admin says:
This in no way interferes with our 3D content. Not only do we have our own store, but we also have assets in the Unity store and are working to make our assets even more accessible in other places.
mario schmidt says:
“NFT marketplaces allow you to set a royalty percentage so you’ll receive a portion of what it sells for every time it’s passed from collector to collector.”
could you write a detailed article about it ? i found out about it in the first place because it went viral that a child with his nft collection also earns a percentage on later sales of his work.
this child created his collections using python programming (the pictures). now where exactly can you set that as a
artist and creator can also earn a percentage of the
participate financially in further sales ?
a) do you have to implement it yourself in the respective smart contract ?
b) is this option offered by every trading platform if you have an nft?
or a whole collection minted (uploaded) on the blockchain ? and what are the possible percentages ? the child i mean gets 2,5% for each resale. is this the highest percentage ? or is more possible ?
The Admin says:
These are all great questions! I’ll take this back to the team and see if we can write up an in-depth article or at least offer you some resources to answer your questions.