What is common between superstar Amitabh Bachchan and a 20-year-old artist couple. No, it’s not just that they like the movies. It’s not even that they hope to make a living from their profession. This is because artists, young and old, now think that NFTs or non-fungible tokens will help them better monetize their talent.
NFTs became a rage earlier this year after a digital artist named Beeple sold his art for $ 69 million. They have continued to earn change ever since.
The fundamental purpose of an NFT is to present proof of ownership by floating creative work on a blockchain ledger. Also called tokenization, the process creates a transaction log, which makes it easier to transfer or resell the NFT. Ethereum is currently the most popular blockchain for NFT minting due to its smart contract capabilities.
In recent months, NFTs have gained the attention of creators, whether in the art world or in the film and sports communities.
Bachchan, for example, will be auctioning NFTs that include artwork around him and his life in November. He will also be auctioning NFTs of him reciting poems by his father Harivansh Rai Bachchan on Beyondlife.club.
It’s not just well-known artists like Bachchan who are turning to NFTs.
Virti Jain, 20, and Ninad Lokhandkar, 21, stumbled upon the idea of an NFT in early February 2021. The Mumbai-based duo did not fully understand how a blockchain works, but several successful NFT sales by young artists encouraged them to give it a go. The Internet has served as a level playing field for them to compete with better-known artists.
After some research, the duo decided to take the first step and register with an Indian crypto exchange.
The first three designs that were sold barely made them a few dollars. However, it slowly picked up and the duo eventually managed to sell a piece called ‘Nandi – The divinity who gives’ for $ 225. While those numbers may seem small compared to Beeple’s $ 69 million, it doesn’t hurt to have a little extra cash to spend.
“We’re students, so it’s not a full time for us,” they told BloombergQuint. “But it gives us a great opportunity to try new things, to explore and gradually find our place in the industry.”
Previously, art galleries, exhibitions or social media ads were often the only way to get noticed, the duo said. However, third-party markets are drastically changing that and making it easier for collectors to discover us, they added.
Star artist Karan Kalra has also failed to sell all of his creations. But his “Organized chaos: Delhi” went under the hammer for $ 2,010 (around Rs 1.48 lakh).
Karan is now convinced and said that NFTs can be a lasting solution for artists.
Create value from scratch
The NFTs also help to push the definition of art a little further. From fine art and digital art to music, sound and sports, everything has the potential to become a valuable NFT.
Amrit Pal Singh, a 31-year-old 3D illustrator and art director from New Delhi, sold two works of art for $ 24,000 (around Rs 18 lakh) in February. Both pieces featured a toy face inspired by electronic music duo Daft Punk. It has sold many more toy faces as NFT on Foundation, a marketplace where auctions are held, and payment is mostly made in Ether, the currency of the Ethereum blockchain.
“It is essential to have something unique in your work so that it has inherent value. Therefore, I have focused on collectibles such as an entire ‘Toy Faces’ collection containing 26 avatars” , did he declare.
What size? How sustainable?
There is little information on the size of the NFT segment in India.
According to WazirX, whose platform is currently the most used for NFTs, it has over 300 creators listed with more than 3,200 NFTs created. The creator-to-collector ratio is 1.49, which means there are currently more people selling NFTs than they are buying.
It doesn’t take much to create an NFT. The cost is only $ 1 on the platform, compared to Ethereum’s fee which rose to almost $ 60 in mid-September. WazirX is expected to launch a secondary market soon, where resale will be possible and artists will be able to get a share of each sale.
At the moment, the market is thin.
“There are only a handful of creators available in markets like WazirX. That’s because they haven’t established a secondary market for resale yet,” Singh said. The WazirX platform, he said, is not based on the Ethereum blockchain and this becomes a limiting factor for creators wishing to reach a global audience.
The NFT space is also still controlled by “pinball machines”. Reversal is the process of actively trading NFTs to make quick money using intraday strategies or buy today, sell tomorrow (BTST).
In addition, the lack of regulation around cryptocurrencies, more broadly, remains a challenge.
“The law is not very clear. We don’t know if Bitcoin can be accepted as a legal payment method in the country, and if someone buys an NFT abroad, it is technically considered an export,” said Indrajit Chatterjee, curator of Mumbai-based auction house and gallery, Prinseps. “Additionally, cryptocurrencies are extremely volatile, making it difficult to assess a coin’s value in real time.”
Chatterjee said that until regulatory hurdles are removed, the auction house will accept fiat money payments and then mint the coin in NFT. He explained that NFTs simply use a blockchain’s smart contract system, and transactions can be settled in traditional currencies.
Whether NFTs turn out to be a bubble or lasting change, Chatterjee suggests that creators focus on what they do best: creating. Beeple has been making art for two decades, and that’s what got him a record-breaking bid, he said. “NFTs are just a new means of distribution.”