NFTs and Cryptoart are hot topics this year. Here are 15 questions and answers about blockchain, cryptocurrencies, NFTs, and cryptoart digital marketers should know.
Let’s dive into the most popular questions about how blockchain works, how it contributed to the right of cryptocurrencies and how it is transforming digital arts.
Blockchain is a public electronic ledger built which is part of the peer-to-peer (P2P) online system. Ledgers are openly shared among users in the P2P network so as to create an unchangeable record of transactions. Each transaction or digital record is time stamped and is linked to the previous transaction in the chain. Transactions in the blockchain are called blocks.
Using blockchain, participants of the P2P system can confirm transactions without a need for a central clearing authority. Blockchain is used for fund transfers, settling trades, voting, and many other applications. Cryptocurrencies are another use case of blockchain.
Cryptocurrency is a form of payment like money. It can be exchanged online for goods and services. Cryptocurrencies exist thanks to blockchain. Because of all encryption and distribution, blockchain has the top security when it comes to digital records.
Ethereum is not a cryptocurrency — it’s an open-source platform that uses blockchain technology to create and run decentralized digital applications, or “dapps” that enable users to make agreements and conduct transactions directly with each other to buy, sell and trade goods and services without a middle man. NFT sites like OpenSea are using Ethereum as the technology that powers their marketplace for digital arts.
NFTs or non-fungible tokers are unique crypto tokens that are managed on a blockchain. The blockchain acts as the decentralized ledger which tracks the ownership and transaction history of each NFT. NFTs have unique IDs and also include other metadata, which is impossible to replicate. Attached to a digital file NFTs make these digital files unique, therefore more desirable to own and collect.
Trading with NFTs resembles an action. Since NFTs are mostly run using Ethereum (blockchain technology), a buyer needs a digital wallet with enough funds in the respective cryptocurrency. During an NFT trade, a buyer will pay for a video file or a jpeg on the NFT auction platform like SuperRare or OpenSea and receive in exchange an address confirming the purchase and ownership of the digital file.
Most NFTs are part of the Ethereum blockchain. This blockchain supports these NFTs and stores the extra information that makes them work differently from a crypto coin.
NFTs are a relatively new investment market and we all have to learn a lot about it. With this, it can be difficult to put a price on digital art, which can make NFTs an incredibly risky enterprise.
NFTs are part of the Ethereum blockchain so they are individual tokens with extra information stored in them. This information – unique IDs and metadata – makes any form of art, music, video in the form of JPGS, MP3s, videos, GIFs unique (impossible to replicate).
Here is a good starting point for crypto art creation.
Currently, we see the following approach to Ethereum: investors believe that the only way to make money using Ethereum is by buying Ethereum tokens and waiting for them to increase in value over time. This seems to be a straight-forward method to earn money using Ethereum. But since the cryptocurrency market is so young, we believe there will be more complex use cases to benefit from the technology and the use cases it offers.
SuperRare, a popular NFT site, mentioned [in an interview to Insider] that people buy NFTs because the cryptoart provides a unique connection to the creator that does not exist with any other art form.
What is SuperRare? SuperRare is a marketplace to collect and trade unique, single-edition digital artworks. SuperRare is using blockchain to tokenize crypto-collectible digital items that the platform’s users can buy and sell. SuperRare’s approval process for new artists is very strict, as mentioned by PROHBTD, a rising digital artist from California. Each month thousands of digital artists submit their work for approval and only a handful of them get accepted.
SuperRare says that their platform is where “Instagram meets Christies”.
Here is how it works for new artists on SuperRare:
– Artists need to apply to be accepted to the platform.
– Once accepted, they need to authenticate your work. They sign their work digitally by creating a tokenized certificate.
– Then artists set prices and run auctions. This allows collectors to bid on their art in the digital art marketplace.
Gas fees are payments made by users to pay for the computing energy required to process and validate transactions on the Ethereum blockchain. “Gas limits” refer to the maximum amount of energy that the user is willing to spend on a particular transaction.
Cover image courtesy of PRØHBTD. PROHBTD considers crypto art as liberation, democratizing access and tagging blocks on the chain. Check their digital art portfolio at https://superrare.co/prohbtd.