A Quick Guide to Investing in NFT Art
Collecting Art NFT's are an easy way to learn about investing in Cryptocurrencies
Greetings 👋🏽 new digital art collectors!
If you are new to investing in cryptocurrencies and would like an easy way to learn about investing, collecting digital or crypto art is a great way to get into the space.
🖼 Collecting NFT Art may seem daunting when you are starting your digital art collection, but you can get in the game and start to build your collection of Art on the Blockchain (in digital collectible marketplaces) with little commitment.
NFTs (Non-Fungible Tokens ERC-721’s) are unique tokens that represent something that is distinct and not mutually interchangeable. These tokens can’t be swapped or replicated, because no two NFTs are alike. In contrast, Bitcoin, just like pennies, gold coins, and New York Yankees hats are all fungible. Each and every Bitcoin, penny, gold coin, Yankee hat is identical, if something were to happen to it, it could be replaced. NFTs, however, are not like this at all.
Since the early days of the world wide web, Digital Artists have had a hard time protecting the copyrights of their works online. NFTs have essentially solved this problem by allowing artists to safely sell their works with smart contracts. The blockchain helps digital artists to create digital scarcity in the marketplace because their works are minted/issued in limited numbers with a unique ledger for each token. This means that the transaction history of each piece of NFT art is unique to each NFT even if it was minted in a set with other identical pieces of art.
There are many applications and social communities that allow digital artists to mint NFT collectibles. NFTs are created on Ethereum based platforms. There has been a flurry of protocols and experiments that have created a marketplace to display and sell these digital collectibles. Rarible, Super Rare, Nifty Gateway, Open Sea, Known Origin, Ephimera, and Mintbase are just a few of the Ethereum based liquidity platforms that have a solid footing.
NFT’s are amazing intellectual property assets because they are a store of value. When the Ethereum stock prices increase, so does the value of your NFT. You can choose to hold, barter, or trade your assets with other collectors. Additionally, you also have the option of taking your gains and investing in DEFI and/or other coins to establish your crypto portfolio and to leverage NFT art as collateral to access loans. NFTfi, a decentralized finance platform, has supported over 60K in collateral-backed loans since its launch in May 2020.
How do I start collecting?
👛Download a wallet: This is a crypto wallet where you will store your Art. Many of the wallets that allow users to buy and store art also allow users to keep their additional cryptocurrecies in their wallets so that all of their digital assets are in one central location. To get started, you should put at least $50 -$100 USD into your Ethereum wallet. Check out our quick guide here to learn more about different NFT wallets. “Pick a NFT Wallet”
⛽️Consider Gas/Costs: These are known as Ethereum transaction fees. Keep this in mind when you are buying art. If the fees are too high at any given point, you may want to wait to purchase art until the price goes down to make your purchase as affordable as possible.
The gas is what you need to complete your transactions or to mint your art. It is essentially a brokerage fee that is paid to send your art across the blockchain and into your crypto wallet; similar to a delivery fee on UberEats or Postmates.
🧑🎨Learn about Artists: Look for artists that communicate their philosophy and put time into crafting their image and establishing strong narratives around their works. Check their social media engagement and their discord to learn about their creations. Another great place to learn about new artists on different platforms is by using the Discord channels that each auction site has available. There are a plethora of resources for those coming into the community in these discord servers that allow users to keep up with the platform directly. I’ll have a link to these channels below.
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Art valuation in the traditional art market is based on four factors; demand, liquidity, market data, & intermediaries. The final valuation of digital art however is subjective.
If you compare crypto art to traditional art you will quickly assess that it is difficult to determine the varying levels of quality. This disparity in quality certainly influences the value of NFTs.
Traditional artists that are well known are able to smoothly transition to digital art because traditional art has critics to determine what is deemed to be good. For example, artists like Nina Chanel Abney, have a much easier time creating demand for their digital works than artists that exclusively do NFTArt.
There are digital artists that have made a name for themselves and are native to the crypto art environment. You can check out platforms like Known Origin or Super Rare to learn about some of these digital artists. Until the NFT Community establishes more curation and art critics to help to determine the best work in the market, it’s best to learn as much as you can about the artist your collecting and trust your intuition and your taste.
Don’t Be Scared! Buy Some Art: Login to some of the platforms with your Metamask or whatever your preferred wallet is on your laptop, desktop, or phone and start collecting from artists that you like!! Connect with other collectors to learn about up-and-coming artists and drops.
Don’t know where to start? We recommend dropping a tweet and hashtagging it with #NFTArt #NFTArtCollection #NFTArtists and asking for recommendations of artists in the space to start collecting.
🤑Sell on the Secondary Market: Once you collect some NFT Art, you may have the option to re-sell your pieces on the secondary markets. This is dependent upon the platform that you are using to purchase your art and the terms that are set in the smart contract by either the artist or the platform.
🖼Display Art in Smart digital frames: You can display your art in smart digital frames in your home and/or office. Here is an explanation of what a digital frame is and how it works.
This is a quick and easy way to support artists, especially those who are marginalized in the NFT Artspace. Additionally NFT art allows you to build a store of value on the blockchain. I hope this article helps new collectors to have a little more confidence in building a portfolio of amazing art on the blockchain.
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Cheers!!
Aina Moyé
Inna Dominus