NFTs - A Boon or a Curse for Creators and Designers
NFTs have been making a big splash in the general mainstream
news media for the past year and a half. Be they Beeple’s works or even
LeBron James Clip that have been sold for millions of dollars. NFTs have
flooded the market and have now become a mainstay of the mass market as
compared to their previous status as a niche. This trend of pouring in
huge amounts of money is making big splashes everywhere, be they
traditional news media, or even digital such as social media sites. Many
platforms even have integrated features to make them profile images. At
the start, they were making news but not of the good kind, wherein only
those able to afford it would be players in this emerging market. But
now anyone with sufficient monetary assets can get into this market.
This is especially a boon for creators that have found a new way to
achieve financial freedom by minting their own artworks as trading
tokens.
NFTs or Non-Fungible Tokens in their most basic
form are a unit of data stored in a digital ledger, termed blockchain
that makes sure that these valuable assets remain absolutely unique and
hence non-interchangeable. Think of NFTs as unique pieces of artwork,
like the Mona Lisa, there is just one of its kind and they can be traded
for cryptocurrency. While anyone can have a copy of this NFT or Mona
Lisa, only the original owner of the asset will be provided with proof
of ownership which is even more prestigious than copywrites. </p?
Here are some benefits of NFTs for creators:
(1) Prior to the cryptocurrency era, we weren’t able to own
certain pieces of digital data such as images, videos, audio,
animations, and posters. But with the advent of blockchain and
subsequently, NFTs allow creators to license, sell, or even display
their artworks. This then enables tracking of the original creator of
that asset and provides them with recognition for their work which was
not possible in the pre-cryptocurrency era.
(2) In
addition to this recognition, the technology that enables creators to
mint these tokens also enables them to come out with different editions
of the same artwork with slight deviations. This ensures that the asset
doesn’t get devalued as was the case when copies flooded the market in
the pre-crypto era.
(3) The NFT technology also enables
creators to earn royalties for their work. This works in the way that
whenever the asset changes hands via a sale or transfer, the creator of
those assets receives a certain percentage of the paid amount thus
ensuring that creators receive their due for their work.
As is with the advent of new technologies, NFTs come with their own set of drawbacks, such as:
(1) The main drawback of this new NFT market is that it is based
on the Ethereum blockchain, a digital ledger that uses Etherium as its
currency. The blockchain is extremely volatile, this is mainly due to
the decentralization that is the main feature of cryptocurrencies. While
it is a boon for being untraceable it is this same feature that makes
it unpredictable. This can finally cause the price of the assets to
regularly fluctuate and may cause creators to lose out on money for
their work.
(2) Another limitation of this technology is
yet again related to blockchain technology. This is the inclusion of gas
fees in every transaction that takes place on the blockchain. Since
everything that relates to crypto technology is based in the digital
world, it usually takes a certain amount of computing power to enable
transactions on this network. The network then charges users a certain
amount to enable this transaction, this is what is known as gas fees.
This inclusion of gas fees usually drives away lower-end users of the
blockchain that are daunted by the huge value hence driving away
valuable customers for the creator.
In conclusion, NFTs are a powerful technology that can solve
cases of ownership and royalty fees that are the mainstays of the
traditional art market. But as is with any new technology it comes with
its own set of drawbacks.