How digital technology through NFT can bring financial success to artists

The Covid-19 pandemic has allowed us to imagine the future as we experience it. This is the case with blockchain technology, virtual reality, and non-fungible tokens (NFTs). The convergence of reality and the future has offered opportunities to continue disrupting specific industries, including the cultural and creative sector.

NFTs are unique digital assets in the form of photography, music, sports memorabilia, collectibles, virtual terrain, and digital art. This form of ownership is backed by a decentralized digital ledger of recorded transactions that is carried out through a business network known as blockchain technology.

A buyer will receive a verified digital token indicating the authenticity of the artwork. The Ethereum blockchain protocol remains popular due to its sophisticated capabilities, but other protocols are used to mint NFTs, including Polygon, which offers lower transaction costs and considers its effect on the environment by being carbon neutral.

There are several marketplaces where artists can sell, auction, and trade their NFT. These include Momint, Magic Eden, Rarible, SuperRare and The Tree, with the most popular being OpenSea.

Founded by Dan Jordan and Trevor Stuurman, South Africa-based marketplace The Tree offers artists a curated entry into NFT.

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Jordan said it is a “digital storytelling platform for African storytellers to harness the power of blockchain technology to tell and transform their stories into a digital future with a digital legacy behind it.”

The market is also looking to create mixed reality galley experiences for various audiences.

Stuurman that while sales measure an artist’s success, this experience is also “about pioneering a new space and creating new pathways for the consumption and creation of art.”

NFTs have exploded globally, with a market value of over $3 billion. the fusionby Digital Artist Pak, was auctioned for $91.8 million in December last year, beating digital artwork Every day: The first 5,000 days by Mike Winkelmann, which sold for $69.3 million in March 2021.

International corporations are also offering NFT experiences. Visa Inc established an NFT Creators Program that helps artists promote their NFTs. Instagram is creating a gallery experience for NFT owners to showcase their artwork on their profiles, and jewelry company Tiffany’s has created a limited edition of 250 “NFTiffs” for sale.

How are NFTs doing in South Africa?

Finder’s recent online survey estimates that NFT adoption could soon reach 17.8% as people and organizations engage with immersive technologies like Web3.

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Jordan said: “There is no barrier to entry for Africa to compete technologically with the rest of the world because now all I need is a cell phone and a relatively strong internet connection, and I can participate in this NFT. conversation with world-renowned digital artists.”

The first NFT sold in South Africa was by Norman O’Flynn and retailed for $35,000 in April last year. Other artists such as Fhatuwani Mukheli, Jan-Hendrik Viljoen, Phumulani Ntuli, and JP Meyer have also dabbled in NFTs with varying success.

Through the innovative Out of Africa NFT Collection, created by the Invictus NFT Lab, top artists showcased 118 NFT renderings of physical artworks to bridge the gap between physical and digital artworks using OpenSea as their NFT marketplace.

While artists could sell their physical artwork, the innovation stems from the NFT collection built on Ethereum, allowing the creation and ownership of the digital artwork to be verified. The buyer’s ability to purchase both physical and digital artwork shows the importance of bridging the two worlds.

Printmaker and contemporary artist Lerato Lodi said: “The opportunity of the Out of Africa collection has opened up my realm of possibilities as an artist. Being featured in the collection among other established artists gave me the confidence to know that I was participating in something unique and interesting.”

Photographer and artist Musa N Nxumalo said: “It’s almost like another world and I feel that over time, as it grows and makes more sense to the common man, then one might think so.” [purchasing the NFT]. The collection was focused on the artist and what I enjoyed about the process was that the buyer will also get the physical art, which is a plus for me as it is what the artist has physically created.”

Although NFTs are sold at auction, Nxumalo said, “As their prices increase, we signed an agreement where artists will be paid royalties as NFTs are resold, which, if you think about it, in the world of normal and secondary art. market, once I sell my work and if it goes to the secondary market, any art that is sold to the artist is out of the picture, which is an issue for artists from a financial sustainability perspective.”

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The process of selling art by connecting artists with the public, rather than working through an art gallery, has its advantages. In the case of NFTs, the benefits are through the creation of “smart contracts” with instructions where every time the NFT is sold, a percentage of the sale in the form of royalties goes to the artist who created the work.

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The NFT market in South Africa is in its infancy and opportunities to sell NFTs are limited.

Lodi said that while he has not been able to sell his NFT artwork, The meeting, experience has shown him the potential of NFTs. Mukheli shared similar sentiments: “It’s an exciting new platform, and the sooner it starts, the better the financials. It’s being able to have my work on a platform that is the future and have it accessible to anyone who understands the NFT space.”

But there are some caveats. Given the lack of interoperability between different blockchain protocols and NFT markets, the convergence of reality and the future has led to the creation of physical and legal contracts as backup if smart contract instructions are not followed.

Furthermore, the current volatility in the NFT space has created opportunistic opportunities for market manipulation, hence the need for a progressive regulatory framework for the application of smart contracts, the establishment of standards and norms, the defense of intellectual property rights of the artists and the reduction of the risks of fraud.

Lockdown regulations and social distancing have forced artists to be more intentional in curating their artwork using social media platforms like Instagram, Twitter, and Pinterest for audience development and potential business. Great potential could be realized by ensuring that artists’ copyrights are protected and that the means of profiting from art is realized in a unique way that might once not have been considered five or 10 years ago.

As the NFT market matures, it is critical to understand that NFT is not art, but rather a potential conduit toward democratizing the art experience for artists and their audiences. Art reflects the times, and the maturity of NFTs will depend on the adoption of immersive technologies and improved social commentary.

Digital art as a form of disruptive innovation and how it is packaged will fundamentally change the way we see and experience the arts sector.

This article was produced as part of a partnership between the mail and guardian and the Goethe-Institut, focusing on sustainability and the arts.

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