NFTs are Taking Over the Digital Art Space and Here’s What You Need to Know About Them
Author: Kanessha Rama Krishnan
Editor: Vijayabalan Krishnan
What in the world is an NFT? The questions keep coming as more and more influential people get their hands on their favorite pieces of art that are selling hotcakes today. Jay Z’s clear admiration for the CryptoPunk NFT has been making NFTs once again the subject of discussion. The abbreviation NFT stands for Non-Fungible Token, which might not be as helpful, but will be laid out in plain terms as we discuss further. The Non-Fungible in ‘Non-Fungible Token’ here refers to the inability to interchange the value of a particular object to another to replace its value. NFTs are usually purchased using various cryptocurrencies, where the prominent cryptocurrency used to purchase most NFTs would be Ethereum.
To put it in simpler terms, a ten ringgit bill can be interchanged with two bills of 5 ringgit as it brings the same value, which is fungible. A non-fungible item on the other hand could be a painting, as painting has a very subjective store of value, in addition to the fact that everyone values art differently, and the value from one painting is not interchangeable with another, hence Non-Fungible. When we add the word ‘Token’ to a Non-Fungible item, it just means that the item and all of its transactions have been embedded into a blockchain network, meaning that unlike a physical product and its proof of transaction, the product and all of its transactions cannot be erased or manipulated by anyone, as each NFTs have their uniqueness which is then stored on the blockchain for everyone to see.
The NFT Scene in Malaysia
Though many in the art scene aren’t aware of it, the NFT scene exists in Malaysia, mostly among design, multimedia studies, 3D and motion graphics, animation, engineering, programming, and architecture students. Ronald Ong, a Penang-based medical student who’s found massive success in selling his digital artworks as NFTs. While an NFT can be minted for both digital and physical art objects, many NFTs at the moment are digital artworks whose creators, like Ronald, see art more as a hobby than a career. Malaysian NFT enthusiasts are also avid NFT collectors, one being the famous first-ever tweet on Twitter in 2006, ‘just setting up my twttr’ by Jack Dorsey, whose founder was sold to a Malaysia-based buyer, Sina Estavi for 2.9 million US dollars. This goes to show that NFTs are well-appreciated in the nation as well.
What does minting mean? Minting an NFT is how your digital art becomes a part of the Ethereum blockchain which is a public ledger that is unchangeable and tamper-proof. Similar to the way that metal coins are minted and added into circulation, NFTs are also tokens that get “minted” once they are created and uploaded into an NFT-minting platform. Your digital artwork is represented as an NFT so it can then be purchased and traded in the market and digitally tracked as it is resold or collected again in the future.
What happens after minting is that NFT creators will have to approve ‘gas fees’, which are fees to ensure that the NFT can be minted and transactions on the NFT can be made on the Ethereum blockchain network. “Gas” refers to the fee required to successfully conduct a transaction on Ethereum. This fee goes directly to Ethereum miners who provide the computing power that's necessary to verify transactions and keep the network running; Foundation does not receive a percentage. You’ll need to have some ETH in your wallet so that you can pay for the gas fees each time you mint an NFT, update a reserve price, or list a piece for auction. Sometimes gas can be expensive when the Ethereum network is congested, but developers are actively working on solutions to bring gas fees down. Two things determine the price of gas: how quickly you want the transaction to be completed and how busy the network is at the time of your transaction. If gas prices are too high at the moment, you can wait until gas goes down in price. You can also submit your ideal price and wait until the network processes it.
What Makes NFTs Unique?
After minting, just like the artist of a painting, you will get to sign your NFT transaction, which then makes it unique and cannot be exchanged for any other NFT’s either, as there would only be the one artwork produced originally by you. Selling of NFTs would become easier and more lucrative as you have a bigger fanbase. For example, an NFT with a painting of Paris Hilton’s cat was auctioned off for 40 ETH, which could be equated to 17 thousand dollars at the time, for a painting of a cat? That’s what having a fan base and good network can get you when it comes to the selling of NFTs. However, there also have been creators who do not go through the fan base route, and instead, use their creativity to produce some beautiful crypto art as well as build networks among NFT creators and collectors.
‘But can’t they just download the file and have copies of it?’ Of course, they can just like any physical art, replicas can be made, but there will only be one real file and proof of ownership of the file will be in the block chain network forever, indestructible. Most minting platforms require you to have some amount of Ethereum as well as a cryptocurrency wallet before you can start minting your artwork on minting platforms as purchases would usually be done using cryptocurrency as well as to facilitate gas fees.
Despite mixed feelings on NFTs by artists that produce works of art in more traditional ways, NFTs are here to stay as the number of creators and collectors are surging in Malaysia, ready to make NFTs the next big thing that everyone wants to be a part of.