Industry News

What Are NFTs Anyway? A Photographer’s Guide to the Digital Art Craze

March 17, 2021

By Hillary K. Grigonis

© Mundissima

Confused by what NFT stands for? A non-fungible token is encrypted with an artist's signature on a blockchain, or digital ledger, that is the backbone of cryptocurrencies like Bitcoin and Ethereum and allows buyers and sellers to verify authenticity and ownership. An NFT representing artist Beeple's "Everydays: The First 5000 Days" collage art" (seen here on a smartphone screen) as a single JPEG digital file (with no physical copy involved) was sold for $69.3 million at Christie's auction house on March 11, the highest price paid for an NFT and the third-most expensive work by a living artist.

Thanks to forgeries, art is regularly authenticated to verify its value—but what about when that art exists only in digital form? Enter the NFT, or non-fungible token. NFTs use blockchain technology to sell limited-edition digital files.

“Non-fungible” means it cannot be exchanged for something of similar value. It is, by definition, one of a kind.

While NFTs have been used for years in everything from owning an original NBA game highlight to yes, Cryptokitties, the technology is booming in the art world after the first NFT ever sold by a major art gallery fetched $69.3 million dollars for a single JPEG file.

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Last week, artist Mike Winkelmann (also known as “Beeple”) sold a collage called “Everydays: The First 5000 Days” at an online auction by Christie’s. The single JPEG file collaged together 5,000 images, and the sum it sold for is a major one even for the art world.

Winklemann, a graphic designer, says that the project took 13 years to complete. While art has been sold in NFT before, CNN says that his piece was the first sold by a large traditional art auction house.

nft everydays: the first 5000 days by mike winkelmann artist beeple
Beeple’s “Everydays: The First 5000 Days” collage of 5,000 images.
© Beeple/Christie’s

Wondering how a single digital file that doesn’t come in physical form can fetch millions? “Everydays” started with a minimum bid of just $100, but perhaps driven in part by the fact that it was the first NFT to come from a major art auction house, it drew bids from more than 350 people.

[Read: 9 Things You Need to Develop a Signature Photography Style & Aesthetic]

An NFT uses blockchain to verify the originality of a work much like Bitcoin uses blockchain to verify who owns how much cryptocurrency. Blockchain, at its simplest, means that the record of that artwork is repeated on multiple servers. That repetition makes hacking the records considered nearly impossible. As a result, NFTs have a sort of digital certificate of authenticity that guarantees it hasn’t be copied or replicated. It is an original file.

While NFTs may not exist in physical form, the blockchain keeps a number of traditional art practices intact. The artist still owns the copyright to the image, as photographer Lindsay Adler explains. Buying an NFT is owning an authenticated, original file, not the copyright itself. Owners of the NFT can sell the single piece of artwork much like selling a painting that hangs on the wall. Like physical art, NFTs can be created in limited editions of the artist’s choosing, whether that’s one or ten. The technology is growing after a year where physical, in-person galleries have been cancelled or limited.

Someone could take a screenshot of an NFT artwork, sure, and others could still view and enjoy the work, but NFTs establish both ownership and authenticity. Winkelmann’s “Everyday,” for example, was a collage of 5,000 images that the artist had already shared online. But, just like you can view an image at a museum without buying it, viewing a photo online and owning it in digital format are not one and the same. The technology is also being used for things like music, original memes and digital collectibles. Twitter creator Jack Dorsey is even using NFTs to sell Twitter’s first ever Tweet.

Choosing to sell a work of art—or another digital item—as NFT doesn’t change the process of creating that art. But, of course, the process of selling that piece is drastically different. Ollie Leech of Coindesk explains that artists will need to choose a blockchain, such as Ethereum, and will need some cryptocurrency and a crypto wallet to get started. Artists then choose which NFT marketplace to use.

One artist’s $69.3 million success story, however, shouldn’t encourage every artist to blindly jump feet first into the world of NFT. As Business Insider warns, fees for buying and selling could mean netting a loss. Fees are not always clear. The gas fee to pay for the blockchain process itself, for example, fluctuates based on how many people are using the blockchain at that time. Artists interested in selling work as NFTs should read the fine print, research diligently and proceed with caution.