By: Zeynep Güler Tuck, April 13 2022
Is it art, tech, or both? To get behind the emerging NFT art form and explore its potential to break down barriers in the technology and innovation sector, here are Non-Fungible Tokens (NFTs) explained. Find out what’s an NFT, what it’s not, what are NFTs used for, and why you should care.
In its simplest form, NFTs are digital assets, which are items like images, videos, and audio that live in the digital world rather than in the physical world. That description tends to diminish the value of these creations and any NFT art creator who has sold a few of their assets for sizeable amounts of money can tell you that NFTs are a lucrative art form. Just ask Canadian-born Grimes who made millions in 20 minutes when she launched her digital art collection WarNymph in 2021, or U.S.-based Yuga Labs who sold the Bored Ape Yacht Club NFT collection in a Sotheby’s auction for over $24 million the same year. There’s no doubt that NFTs have shifted the way we see digital art, so let’s dive into the world of NFTs, a place where creative expression knows no bounds. While this isn’t the mega crypto F.A.Q. that was compiled by The New York Times, it might give you a few hot points to bring up at the next networking event or watercooler gathering.
What’s an NFT?
We know they are digital assets, and we know they exist virtually rather than in the physical world. NFT stands for Non-Fungible Token, so let’s break it down. Fungible assets, like currency and funds are interchangeable. Each single asset or token can be exchanged with another one. A dollar can be exchanged for, or replaced with, another dollar of the same currency. However, with NFTs, non-fungible means you cannot exchange one of these tokens for another one. Each token, or NFT, that’s created is a unique and original asset. Once an NFT is created, it’s owned exclusively by the creator or collector, and proof of ownership can be traced at all times through this digital technology. Beyond the well-known Bored Ape collection, NFTs come in a range of digital media, including artwork, memes, video clips, and even tweets. These assets live on a blockchain.
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What’s a blockchain?
By now, most people know what a blockchain is, however, there are a few things that make this space unique for NFT storage. Let’s take a bird’s eye look at this world. Most NFTs exist on the Ethereum blockchain. While Ether is the cryptocurrency of this platform, it also supports bitcoin, dogecoin, and NFTs. NFTs in particular house data that make them different from other cryptocurrencies. Now, remember what we said about non-fungible tokens? While bitcoins and most other cryptocurrencies are interchangeable (fungible), NFTs are not, therefore, they are a unique asset in the blockchain.
Are NFTs considered art?
Collecting NFT art is comparable to collecting physical art, in the sense that when you purchase a work of art, say an original Banksy or Kusama, you own the original item that the artist created. While people can purchase prints of it, you’re the sole owner of that unique item. An NFT asset works the same way. Once an asset is minted as an NFT and you purchase it, you are the rightful – and only – owner of the original. Fans are welcome to download it as desktop screensavers or smartphone wallpaper, however, you are still the owner of that unique digital footprint from now until the end of time (or whenever you decide to pass it down to the grandkids or your bulldog, Spencer).
You may be asking, “What’s a minted NFT?” When an NFT is minted, using the OpenSea platform, as an example, it becomes a creative asset that can be monetized by the artist or creator, at which point, it can be sold to the public. This is the moment when a creator can get direct credit for their creation. Elevate’s NFT Residency program, developed together with TD Bank, provides the funding, minting, and support underrepresented creators need to gain access to the fast-paced NFT space.
While some NFT art collectors are aware that the millions of dollars being spent on NFTs might not last forever, some collectors reveal that they aren’t in it for the money, which is exactly the reason why so many believe that NFTs hold a special place in the blockchain. Like priceless art, many collectors may never sell their NFTs, and simply keep adding to their collection. For them, it isn’t about the investment, but rather the enjoyment of this art form.
What makes an NFT a tool for social innovation? In other words, why is it a force for good?
The question about whether or not NFTs will transform the art world is one that has been on our minds for some time. If anyone can be an NFT creator, collector, and benefit from this digital asset, does that mean that NFTs will transform the art world? With the right funding and direction, NFTs can democratize creative work, making it more accessible than spaces like Hollywood and the mainstream art world, which have struggled with deeply-rooted biases toward race, ethnicity, gender, sexual orientation, ability, the list goes on.
NFTs are also great for community-building. Similar to the way people congregate or come together around ideas, works of art, creative endeavours, and tech trends, NFT collectors and enthusiasts unite around NFT tokens. Not only does this create an opportunity for these tokens or assets to gain more exposure in larger communities and circles, but it also serves as a vehicle for amplifying the work of underrepresented creators while ensuring that they get fairly compensated for their work. When Elevate announced the NFT Residency Program, developed together with TD Bank Group, the aim was to provide access to mentorship, capital, and community for 8 underrepresented creators, empowering them to thrive in the fast-paced NFT art space.
What do NFTs have to do with diversity & inclusion?
Underrepresented artists continue to face barriers entering and gaining exposure in the art world. This isn’t surprising since 92% of art professionals in Canada are Caucasian, while less than 4% are from Indigenous communities, and visible minorities are a little more than 4%, according to a 2017 survey by Canadian Art magazine. A recent survey in Fast Company found that the numbers are similar in the U.S. Among the artists who showcase their work in 18 major U.S. museums, 85% are white and 87% are male. However, there’s light at the end of the tunnel, as NFTs present an innovative way for underrepresented creators to break into the largely homogenous art world and gain exposure, says Forbes. Many NFT artists from underrepresented communities can now bypass traditional gatekeepers to share their artwork, and the digital environment allows them to connect with buyers and collectors with ease.
“Underrepresented creators in the NFT art space face a number of barriers to entry. That’s why we designed the NFT Residency Program; to provide the kind of access to community and capital that would ensure that these creatives get a seat at the table,” says Sen Sachi, VP Innovation at Elevate.
Visit our NFT Residency Program to learn more and meet the 8 creators in its inaugural cohort.