A Brief Introduction into NFTs
In 2017, Matt Hall and John Watkinson, founders of New York-based software company Larva Labs, created a software program that would generate thousands of different, strange-looking characters. The first NFT was a so-called CryptoPunk, a 24-by-24-pixel image. Hall and Watkinson created exactly 10,000 of them, each with their own recognizable personality and unique combination of distinctive randomly generated features.
At first, the creators thought they might have had the makings of a smartphone app or game. What they ended up with was a paradigm-altering model for the digital art market and a challenge to the concept of ‘ownership’ itself.
Once 10,000 CryptoPunks had been claimed, however, you could no longer create new punks. So, the supply was limited from the start by the smart contract. Once put on the blockchain, the contract was a binding agreement establishing how many punks can exist, how much they are sold for and how to get one. Official ownership of each work is described in a contract on the publicly accessible Ethereum blockchain, although anyone can save a copy of the image file to their memory stick or hard drive. The ownership history of every artwork is tracked and documented in the blockchain, too.
Because they live on a blockchain, NFTs are easy to track. This tracking allows for verification of their authenticity as well as their past history and owners. Formally, NFTs are smart contracts that people interact with by calling them and then receiving proof of interaction.
Once minted, Hall and Watkinson offered the CryptoPunks for free, not forgetting to claim 1,000 for themselves, ‘just in case it becomes a thing.’ At first, there was very little interest. But before too long, Punks were selling for thousands of dollars.
Since the end of February of this year, the NFT market has seen explosive growth. At a recent record-breaking auction at Christie’s, Beeple sold The First 5000 Days for $69 million. Similarly, digital sports collectibles are booming with the NFT-based NBA Top Shots platform surpassing $200 million in sales last month. Clearly, this is fast becoming a lucrative market.
If you want to share your artwork with the public, getting started with the world of NFTs has never been easier than right now. Currently, the largest marketplaces right now are OpenSea, Rarible and Foundation. NFT marketplaces enable users both to share their original pieces and also buy the work of others, which is also a great adventure. If you want to sell your pieces, you’ll need to pay for gas which is about about $50 to $100 depending on the platform. Any of these marketplaces is definitely good for beginners as well as for already established artists and creators.