Over the last few years, the term NFT has ricocheted throughout the art world, quickly gaining momentum, growing into a powerful sector of the industry. However, it wasn’t long ago that the digital universe of NFTs was unknown to most. There are many who continue to question its legitimacy and others who seek advice as to how to enter the lucrative and expanding market. Our specialists worked with Verisart, an NFT minting and blockchain certification platform, to compile a guide to NFTs for galleries and artists.
All quotations throughout the article have been provided by our partner, Verisart.
So, what exactly are NFTs and how do they work?
Jake Elwes, O(a)k Computer, 2021, NFT. Certified by Verisart. Courtesy of the artist and Verisart.
NFTs are unique cryptographic tokens. Over the last few years, they quickly became associated with works of art, but they can also be used to trade digital, collectible items. There is a common misconception that one must be well-versed in coding and technological development in order to make an NFT. In fact, this is far from the truth, as there are several, user-friendly, online platforms that allow anyone to turn digital files into NFTs. And you might wonder, what does this have to do with Blockchain?
“Blockchain is the technology underlying NFTs. Blockchain is a shared, open, immutable, and distributed database made up of a list of records, or blocks. NFTs, short for ‘Non-Fungible Tokens’, are unique cryptographic tokens stored on blockchains. “Non-fungible” means each token is unique and cannot be replaced by another. This makes it easy to track the provenance and ownership of NFTs."
"NFTs represent unique digital files by capturing additional metadata relating to a file. In the case of digital artworks, this typically includes details relating to the artwork, the creator, and its owners. You can think about NFT functioning a little bit like a deed, in the sense that it represents the thing you own and ascribes ownership. A deed to a house details which house it refers to and who owns it. Similarly, an NFT will be owned by a specific person and point to a digital file. When you ‘mint’ or create an NFT, you are associating a cryptographic token with a digital file and additional information.”
A booming industry
Universal Everything, Nature Always Wins - Airport, 2021, NFT. Certified by Verisart. Courtesy of the artist and Verisart.
The success of the NFT sector is widespread throughout the entire art market.
“The rise of NFTs has been meteoric. In 2020, NFTs sales totaled less than $100 million, and the following year, by 2021, it exceeded $20 billion.”
In short, the industry's value increased 200 times in one year! When looking at the history of the traditional art market, it has never before experienced a financial growth of this magnitude. And it’s only the beginning.
The NFT market had a historic year of breakthroughs in 2021. This included the auction sector, a consistently traditional player in the art field. In fact, to much surprise, the auction industry embraced the digital artform. Following the sale of Beeple’s Everydays: The First 5,000 Days, major houses such as Christie’s and Sotheby’s exceeded $100 million in revenue from NFT sales in 2021.
Why is there so much buzz?
William Wegman, Wait, Wait (still), NFT, 2022, minted on Verisart, courtesy of the artist and Verisart.
“Beyond the excitement of a new aesthetic and art form, there are two key factors at play. The first is technology. NFTs give collectors full control over their collection and empowerment at an individual level. NFTs can be easily sold and traded without an intermediary. This is especially appealing to the digital native generation and individuals already investing in cryptocurrencies. The technology has also empowered creators by providing financial rewards long-term, with automatic royalties on secondary sales."
"The second is community. Many of the most expensive NFTs and successful NFT projects have been collectibles, collections of 10,000 NFTs around a specific theme such as CryptoPunks Bored Ape, and Moonbirds. These collectibles provide a sense of belonging and excitement, generating whole new digital communities… The NFT space has demonstrated how important community is in driving interest and value. In the future, we’ll see contemporary artists build their own online communities”
Because of the system at play, artists can navigate the creation, representation, and sales of their works independently. In a way, it is a form of liberation, as it allows artists autonomy and total control over their artworks without having to pay for representation. Once a digital artwork has been registered as unique, the artist is responsible for its own success. This is to say that the artists are in control, and, this alone, has completely transformed the transactional system at hand. Perhaps for the first time, artists hold the power in the equation, revolutionizing salaries, which provides artists the freedom to create new projects, however they please.
How to get started
Mario Klingemann, Hyperdimensional (still), 2021, NFT. Minted on Verisart. Courtesy of the artist and Verisart.
As seen throughout the entire art market, online sales and e-commerce expanded during the pandemic as collectors and buyers were unable to purchase works in person. Stay-at-home mandates led to a rush of online sales, encouraging a change in mindset regarding online art purchases. Beyond this, most artists of 2022 are technologically inclined, utilizing digital tools and social media as a means to expand their visibility, moving away from the confines of traditional art buying practices. Some artists are interested in expanding artistic mediums and are eager to tip their toes in NFTs. And galleries are not left out, some are eager to get into NFTs. But, where to begin?
“The best way to get started is to spend some time immersing yourself in the space. Follow NFT artists and collectors on social media, join Twitter Spaces and ask questions. The NFT space moves fast and social media is often the best way to keep up. We also recommend thinking carefully about what makes sense for your existing creative practice."
"Artists and galleries shouldn’t replicate the physical in a digital medium but instead, consider what a digital medium offers that the physical doesn’t."
"Lastly, we recommend taking advantage of your existing audience while also trying to reach an NFT audience. Verisart recently launched a Shopify Minting App enabling creators, galleries and businesses to easily create and sell NFTs in just a few clicks. By creating and selling NFTs on Shopify you can accept both card and crypto payments and easily introduce your existing collectors to this new space. Verisart is currently working with galleries and marketplaces such as Artsper, König Galerie, and misa.art.”
What are the best practices to get started?
Pindar Van Arman, Ghosts in the Machine - bitGANg 1001 (still), 2022, Certified NFT, minted on Verisart, courtesy of the artist.
As the rise of NFTs has taken over the art market, more and more traditional, physical art spaces have begun to show an interest in expanding their inventory. But where do gallerists and collectors find new, NFT artists?
“There are so many platforms for discovering artists! The NFT community is very active on Twitter so it’s a great place to start. NFT artists are often very supportive of each other so it can be helpful to follow bigger artists in the space and keep an eye out for whose work they retweet and share. We are also starting to see more criticism and curatorial voices emerging in the space. Platforms like Vertical Crypto Art or magazines such as Right Click Save provide a more critical understanding of the NFT art being created."
"Once you’ve found an artist you’re interested in working with, reach out via social media or email. Many artists in the NFT space are interested in building long-term careers and galleries can play an important role.”
In short, as a gallery, you are an indispensable player in ensuring the longevity and promotion of an NFT artist. We advise you to approach artists with whom you feel close (in terms of artistic universe, collectors, mediums used, etc.) so that you can follow them throughout their future careers. Don't be afraid to support young talents, still unknown to the traditional art market, but who have already caught the eye of NFT buyers. And take advantage of your expertise and your network of collectors to accompany your current artists who wish to embark on the NFT adventure. For example, you can launch a multi-artist NFT drop, by utilizing a platform such as Verisart. This is a good way to test the sales potential of your artists and to identify the type of works (videos, gifs, virtual reality...) that appeal to collectors.
As an artist, it is essential to choose the correct marketplace. There are a variety of marketplaces available to buy and sell NFTs. For example, OpenSea offers the largest range of crypto collectibles. Because of the diversity in content, this platform is a popular choice amongst artists, as it attracts a large audience. Once you’ve found the right marketplace, you can use a testnet. You might wonder: what exactly are testnets? Testnets engage with a similar technology behind cryptocurrencies. They are used to do tests and experiments without altering the main chain. They are a great way for artists and sellers (galleries and collectors for example) to gain a better understanding of the process, in order to avoid mistakes and mishaps in the future.
It is also essential to keep in mind the timing of minting and selling NFTs. All users of an NFT platform are subject to a commission, a transaction fee, called the “gas fee.” Because of this, Verisart suggests that artists wait to mint NFTs when gas prices are at their lowest. In fact, it is gas prices that are the economical force behind the mining power necessary to administer fiscal transactions on the Ethereum blockchain.
In other words, the gas fees increase when the network is more active. If you wish to avoid an increase in costs, consider time zones and days of the week that are less busy. There is also Etherscan, a website that provides gas prices based on location and time zone. This is a helpful tool for artists and galleries who are starting out in the NFT business.
It is also necessary to consider the overall economic climate and the health of the cryptocurrency market before jumping in. For your first drop as an inexperienced player, it's advisable to pick the correct moment. This is because the cryptocurrency market is evolving, just like the stock market. As of May 2022, the stock market took a turn for the worse: the value of bitcoin has increased almost 50 percent since its peak in November 2021. This has of course sparked a domino effect, bringing down other cryptos such as Ethereum. Dropping values, while they may seem scary, also show a certain maturity of the market. Indeed, crypto currencies seem to follow the same course now as the Nasdaq, the American stock market index dedicated to technology companies (like Google). It is also a sign that more and more institutional players are investing in this market, which makes it more stable, and less subject to the whims of a few individual investors or speculation.
Lastly, remember that NFTs are digital entities. Because of this, it is essential to develop your digital visibility and to promote your work, in order to market it as well as possible.
Dos and don’ts
Robin Rhode, Gusheshe, 2021, NFT. Certified by Verisart. Courtesy of the artist and Verisart. In partnership with Lehmann Maupin.
When an industry booms as quickly as the world of NFTs, issues will evidently arise. In the NFT market, it is essential that everything is secured properly, in order to avoid fraudulent activity and scams. “The NFT space is also a whole new way of transacting using wallets and cryptocurrencies. Before you even begin creating or purchasing works, it’s vital the seed phrase for accessing your wallet is kept in a safe, secret place so you don’t lose it and others don’t have access to it.” Unfortunately, there have been collectors and artists who learned this lesson the hard way…
“The best defense against fraud is always research and education. Just like in the physical art world, it’s essential to understand who created the work and who is selling the work. Look for verified ticks, check the artist's social media profiles, can you find information about them online, etc. Tools like identity verification and Certificates of Authenticity contribute to combating fraudulent activity.”
Verisart verifies the identity of all creators minting on the platform to ensure the best protectection of their identity, in order to establish trust with collectors. All of Verisart's NFTs are Certified NFTs and come with a COA (Certificate of Authenticity). The certificate gives creators the ability to add context to their work through notes, additional files like press releases, and collector rewards which are only accessible to the owner of the NFT.
This is just the beginning
It is predicted that there will be a “second wave of NFT adoption taking root, as barriers to entry are removed.” As minting and verification processes continue to strengthen across platforms, collectors and buyers are able to confidently purchase works with ease. And as a result, NFTs are becoming more and more mainstream and commonplace. The world will continue to see “NFTs permeate the art market further from crypto, to street, to contemporary to virtual and interactive experiences. This is just the beginning!”
And to make sure you don't miss out, we recommend that you take an in-depth look at this evolution in the art world. Why not start your first NFT drop as a gallery or create an NFT piece as an artist? With the help of qualified players such as Verisart and Artsper, galleries and artists can enter the NFT market, while benefiting from enhanced security and tailored support. So what are you waiting for?