Irreplaceable symbols have opened the door to a potentially lucrative new world for artists in developing economies
Ryk Alila Like many other artists, his career was turned upside down by the pandemic. The Nairobi-based photographer quickly ran out of revenue during Kenya’s partial collapse in 2020. He tried alternatives – affiliate marketing and YouTube videos – none of which worked. Then a friend introduced him to “non-replaceable digits” (NFT’sAlila described it: “It completely changed my life and gave me the freedom to recreate without constantly thinking about producing artwork to get money and pay bills.”
Unlike physical money and cryptocurrencies, non-swingable tokens cannot be exchanged. They’re like collectibles of real collectors of artwork, videos and music clips – except they’re digital. These icons swept the world of art and collectibles. Now, crypto-millionaires who own an Ethereum balance that they can spend can invest directly in these non-swingable tokens while keeping their money within the crypto-currency ecosystem. The rapid rise in prices and the potential for a large return contributed to this boom.
The trading volume of non-negotiable tokens reached $ 17.6 billion last year, according to a report released by the company Nonfungible.com Specialized in non-replaceable symbol data. This figure exceeds $ 40 billion, according to the company’s estimate Chain analysis.
These prices can reach surprising levels. Last year, a sign from Crypto Banks (CryptoPunks) issued by Larva Labs – a group of 10,000 non-recurring “punk” characters created and produced by two creative technology experts – for a whopping $ 23.7 million to the CEO of Chain, a blockchain-based technology company . Blockchain). Initially, anyone with a digital Ethereum wallet could get free cryptocurrencies, which are usually credited with starting a passion for non-swingable tokens. Just four years later, the cheapest token from this pool is 60.95 ETH (about $ 128K on May 14).
But for creators like Alila, the rise in popularity of non-swingable characters is that they solve a centuries-old problem: how to earn digital artwork. For artists, photographers, animators and others, doors are opening up for potentially lucrative opportunities – especially in developing economies, where content creators have previously struggled to market and sell in the multi-billion dollar traditional art market.
revolution in the art world
When a person generates or “mint” a non-replaceable sign, they execute code stored in smart contracts that identify ownership through a unique identifier and unique metadata. Because the information is recorded in the “blockchain” – a publicly distributed digital ledger – it is easy to verify ownership. Thus, although the irreplaceable sign may be copied or falsified, the ownership of the metadata associated with the work in question may not be copied or falsified. It is a concept that is gaining radical importance.
Before the advent of blockchain technology, digital artists struggled to prove that they were the original creators of artwork. This changed with the advent of non-fungal tokens, which brought about a radical change in the business model of trade shows that traditionally took the bulk of the art market’s profits. Artists now trade directly on the internet, usually through marketplaces such as OpenSea or Gorgeous Gateway, without the need for an intermediary. Instead of sacrificing a hefty 40% -50% earned by the gallery owner, the artists pay a small transaction fee.
It is significant that the so-called “flipping” has become a widespread phenomenon, in contrast to what is happening in the traditional art world. By selecting collectors and intermediaries, art galleries prevent the “flipping” of artworks, which is a totally unacceptable practice in the sector. As for non-swingable tokens, anyone can buy them, often anonymously, which encourages investors to resell them quickly for a profit rather than keep them like real collectors do.
Osinachi, Nigeria’s highest earning digital artist who creates his work with software. do not think Microsoft Word, that it’s so bad; “In the world of traditional art, the artist is often unaware that ownership of the work has changed,” he says. “In the space of non-fungal symbols, you get your payout immediately while the resale and flips take place.”
Non-swinging signs allow artists to take a share of any future sales, giving them a degree of financial security that most traditional artists do not have. When artists sell works using blockchain technology, they sign a self-performing contract with the buyer that guarantees them a return – often between 10% and 30%. “It’s a very large amount” for artists, Osinachi says. Even at death, if a family member has access to your crypto-wallet, they can receive the proceeds from your business. “
Non-swinging signs allow artists to take a share of any future sales, giving them a degree of financial security that most traditional artists do not have.
Non-swinging signs, however, are not without challenges. Cryptocurrencies have poor environmental performance, not to mention fraudulent practices are high tide four with their use. The most notorious practice in this regard is the so-called “back pull”, where the creators of the token are in a hurry to withdraw funds after they, who apparently launched a real crypto project, then flee with the investors’ money. According to a report issued by the company Chain analysisInvestors in cryptocurrencies lost more than $ 2.8 billion in “pullback” operations last year. Cybercrime also poses a real danger, from account takeovers to fake markets.
Alila was concerned about security when he wrote his first work, and he appeals to those who are thinking of entering this world to explore it for themselves and look for a crypto-society. He believes that there are still a small number of African artists in the world of non-fungal tokens – given the disability that comes with their complexity, difficulty finding followers, and gas fees (the transaction costs on the blockchain). However, he remains optimistic and has big ambitions for the future. In addition to digitizing his work, he currently runs a company that works with 157 artists across Africa to “revolutionize the digital African space”, as he puts it. He also says: “We want to generate $ 2 million to $ 5 million in sales this year, just to prove to people that it is possible.”
The views expressed in these articles and other published material are those of their authors, and do not necessarily reflect the policies of the International Monetary Fund.