NFT: Digital crypto art… what is it?! NFT Exchanges, Examples & Co – Interview

NFT or “Digital Crypto Art” – More and more people are talking about it. But what does this term mean and what is behind it? Today we met with Stephan Czaja, as an entrepreneur he writes more often about financial topics, whether cryptocurrency, real estate as an investment or currency trading. On the side, he himself has published his first, small NFT “real estate” collection. Today, he will give us a rough explanation of what digital art is all about! Do NFTs make sense? How can you buy, sell? What marketplaces are there?

The Interview: “Digital Art” NFTs

Thank you for taking time for us today, on a busy Monday morning. Most people who search the internet for the word “NFT” certainly still know very little. Could you perhaps summarize briefly and quickly….

What are NFTs, explained very simply?

Stephan Czaja: With pleasure! I also try to keep out as many technical terms as possible. But you have to have heard a few.

NFT means “Non-fungible Token”. Simply explained, a token is a digital object that can contain additional information. This is also how we get to the NFT. “Non-fungible” means “not replaceable.” Here, simply put, every transaction is recorded. Meaning: I publish a GIF in a NFT marketplace, someone buys this GIF and sells it. Every transaction is documented. So even the 2nd, 3rd and 4th buyer knows that it is the original.

Simply translated, a digital file whose ownership is documented.

The big advantage is this: Suppose someone makes digital art and publishes it. No matter if it’s a picture or a video, it can be copied easily and nobody has the reference to the original file anymore. Through documentation (blockchain), you can trace individual files. So you can see who published a file, who bought it and who sold it. Through this transparent trade, values can be measured to individual digital objects, whether image, video or other.

Just like in the “real” art world.

Mona Lisa at the Louvre, Justin Bieber NFT, … Comparison

I always like to explain it with the Mona Lisa. There are thousands of copies, millions of photos, but only one original. We know that it is the original because its history is precisely documented and it hangs in the Louvre today. In principle, the picture is worth no more than the material from which it is made. The value only arises through supply and demand.

Suppose Justin Bieber makes an NFT. Many fans would want to own it, knowing that this object (whether physical or digital art) is from him.

So the big question now is how will the demand side develop? Will digital art establish itself, will it remain a niche product?

Personally, I think there’s just as big a market for digital art as there is for psychic art. Of course, it will take another five years, ten years, for me to solidify the structure, from capital investors and investors, to auction houses – sort of away from “nerds”.

Can you give us a successful example?

Successful examples of NFT art now abound.

Spectacular! 69 million $ for 1 picture

69 million for 1 artwork – The most spectacular sale was the digital work “5,000 Days”. The international auction house Christie’s wanted to integrate the hype about NFT art into their own portfolio. So they looked for artists who were already making digital art. They then found a New York artist who had already been making a digital painting for 15 years, every single day. Perfect! They put the 5,000 photos together and made it into one big, single piece of art.

Artist (Beeple) after the sale:

The artwork was then sold for 69 million dollars. This made the artist the 3rd richest living artist in the world overnight. This shows the potential of digital art.

CryptoPunks and Bored Ape: Successful Collections

CryptoPunks – Especially popular are collections, which are compilations of computer-generated images. Let’s say 1,000 different cats, each with 50 different hats, glasses, hairstyles, which are compiled individually. Among the most successful projects are the “CryptoPunks”.

Here also to see in the marketplace:

• CryptoPunks

Bored Ape Yacht Club – However, the “Bored Ape Yacht Club” collection was also extremely successful.

Here also to see in the marketplace:

• Bored Ape Yacht Club

What does such a top NFT cost?

Prices for these special, very successful collections are high.

The most successful CryptoPunks work would currently have to be around 120 ETH (Ethereum), which is round about $360,000.

At Bored Ape Yacht Club, the most expensive pieces are currently at 100 ETH, or $300,000, at the current rate.

What can be an NFT?

In principle, any digital object can be an NFT. Primarily, it is about giving a digital object additional information, e.g. sales history or a smart contract.

This is how artists earn (more) money!

This smart contract is particularly interesting for artists. In the normal art market, they profit once when they sell. With NFTs, artists get a percentage for each subsequent sale. The percentage is determined in the Smart Contract itself and is usually between 1% and 10% of the sales price.

Artists earn money:

• Physical art: 1. When sold
• Digital art (NFT): 1st sale + each subsequent sale (pro rata).

NFT types at a glance

Artists can then publish various forms, images, videos, but also accessories for the metaverse in the future. There are already games that work with this, which means that NFTs are also a topic in gaming. Of course, the principle of the classic trading cards can also be easily transferred to the digital world, with a certificate of authenticity.

• NFT images
• NFT videos
• NFT Games
• NFT Collectibles
• NFT Music
• …

Why buy NFT? What do you do with NFT art?

As mentioned before, in the end it is not different from the Mona Lisa or other famous works of art like “Fillette a la corbeille fleurie” by Picasso, “The Scream” by Edvard Munch or even “Adele Bloch-Bauer I” by Maria Altmann. When enough people attach value to an object, but this object is scarce or unique as in this case of artworks, the price increases.

If no one is interested in an object, it has no price, well maybe the material value.

Anyone who buys NFT art assumes that it will increase in value in the future. Accordingly, NFT art is an investment, like many other things, whether Rolex watch or real estate.

What is the cost of 1 NFT?

There are millions of works of art that you can buy, images, videos, many for very small amounts. If you consider that a single collection, of an artist, can already contain 10,000 individual works. Payment is often made in Ethereum, a cryptocurrency. Currently, one unit is worth about $3,000. Some things can be bought for as little as 0.001 Ethereum, which is about $3. So the initial amount is relatively small.

Caution. Take transaction costs into account

Here’s another tip for those who are buying for the first time: Pay attention to the transaction costs when transferring. Without any further settings, the transaction costs can be as high as $70 for some providers. You can always find the settings at the end of the purchase. The faster the NFT is to be transferred (entry in the blockchain), the more expensive, so $70 maximum, approximately.

NFTs from well-known artists are then already more expensive, even new releases can cost several $1,000 here.

How to get NFT?

You can buy, sell and trade such digital art via NFT marketplaces or NFT exchanges. Currently there are about 20 providers, which I have also listed on my website: NFT Marketplaces.

In principle, you can imagine the platforms as well as ebay.

Providers are among others OpenSea, Binance, there are many. Here you can buy an NFT, sell an NFT or even hold it in your wallet, which is a digital wallet. A wallet is a small app, nothing more. Sellers, or artists, put their works online at a fixed price or even an offer price, with duration from 7 days to 6 months.

What are the advantages / disadvantages of NFTs?

If someone actually wants to invest their money in NFTs, they should always keep in mind that they can only resell their artwork if they find a buyer. Ultimately, like the stock market. The only advantage is the potential increase in value, comparable to the first Bitcoins, which were relatively cheap at the beginning.

Be careful though, NFTs are individual objects (tokens) and not exchangeable like shares or cryptocurrency

So remember:

You can only sell if someone wants to buy!

Those who are risk-averse and have “play money,” money that he or she can invest:

• Potential increase in value

For artists in addition, the previously mentioned share, of each additional sale.

What are the disadvantages of NFTs?

As mentioned earlier, there are tens of millions of NFTs. Each one has an individual value. Anyone investing should be well versed and knowledgeable about the art market in general. Buying NFTs is not as “easy” as cryptocurrency, for example.

• Risk of losing money – 1 NFT out of 1.000.000 has success

Wow! Thank you for the detailed interview.

If you want to learn even more about NFTs, including coins, tokens and the blockchain, read more on Stephan Czaja’s website here.

NFT: Blockcain, Coin, Token, Marketplace – Step by Step

NFT – Digital Art, a new phenomenon. Here you will learn everything: What is an NFT? How do you buy NFTs? What marketplaces are there and how is the art market developing for investors. Meanwhile, higher prices are being achieved in the digital art market than in the physical one. Collections like “CryptoPunks” , “Bored Ape Yacht Club” are just two of the most famous works of digital art. The work “5,000 Days” made the artist overnight the 3rd richest living artist (sold at the price of $69 million at Christies). Buy, sell, collections and picture frames for digital art. Welcome to the world of NFT.

• NFT: Digital Art – external