Why NFTs are a Game-Changer for Artists, Galleries, and Art Collectors
In a new fast-paced world driven by cutting-edge technologies, the digitalization of assets, services, and products becomes one of the tools that allow organizations to get the upper hand on competitors. No matter the industry or the object, it helps market players stand out in overcrowded business realms and create new, valuable revenue streams to fund new projects or mitigate crises.
However, with the dawn of new technologies and internet expansion, modern concerns have begun to emerge. How can we secure our intellectual property? Is there a way to safely monetize my property? How should I deal with the recent economic crises? Is it simple to get into a new digital realm? What are the benefits exactly? Why are NFTs good for artists? These and many more questions may arise whenever organizations and individuals want to get into new digitalization opportunities like NFTs.
Non-Fungible Token, in short NFT, is a type of digital asset that represents a unique item or piece of media. It can be artwork, photo, statue, video, or any other object. Unlike cryptocurrencies, NFTs are unique, cannot be equally exchanged, and have a distinct digital signature that verifies their authenticity and ownership. That technology has gained popularity in the art and entertainment industries, enabling creators to trade their digital works and provide indisputable proof of ownership.
As with any emerging technology, NFTs arouse certain concerns and criticism that we already addressed in our recent criticism debunking article. However, its undeniable benefits, especially for galleries, creators, and collectors, make NFT a valuable asset.
In this article, we examine and show examples of how NFTs help the art community thrive in the era of digitalization and under the pressure of modern challenges.
Reach a wider audience
The COVID-19 pandemic revealed the vulnerability of museums to such crises when physical engagement is cut off, and the public can no longer access their exhibits.To avoid repeating the same mistake, various galleries, museums, and other art institutions decided to communicate with their audiences in a new way: through digitalization.
Now, while some art organizations provide new digital services to their visitors, others, such as The British Museum, MFA Boston, Annka Kultys Gallery, and Leopold Museum have turned to tokenization. Turning to new assets allowed them to leverage the power of the borderless digital realm. As a result, all art lovers, regardless of visa restrictions or financial capabilities, can engage and support those art institutions to increase their financial stability and embrace art.
Build a stronger relationship with their collectors
Building a solid community of supporters is also a valuable factor among other NFT benefits for artists, galleries, and collectors, as not many can withstand a crisis without followers. Traditionally, people gather around creators as they like artworks, styles, or topics, but NFTs become a game-changer and add actionable benefits.
When a gallery sells an NFT, it can also include a wide range of additional content, like access to private servers, behind-the-scenes footage, or exclusive real-life events. The options are limited only by imagination and the will of the issuer. That way, galleries get new leverage to build a stronger relationship with their collectors and engage the community around artworks.
Create new revenue streams
In an interview with the Magazine, specialists in passion economy Li Jin points out that the relationship between NFTs and creative work is far more profound and allows art owners to benefit from its sales and resales.
And it’s absolutely true. Using NFTs, art institutions can monetize their collections without the need to part off with originals or organize real-time exhibitions. For example, by approving commissions, the museum will sell only digital copies and generate income from both the sale and secondary-market fees. As a result, galleries and museums save money on organizational expenses and access additional income to support themselves or fund interesting new projects.
One of the leading examples of that approach is the previously mentioned case of The British Museum. As Kyle Chayka wrote in his article, while strolling amid various trinkets in the souvenir shop of The British Museum, he encountered a sign that encouraged visitors to look into the museum’s NFT shop. Going through a QR code on that sign transferred Kyle to the virtual shop with various NFTs of famous authors like Hokusei and J. M. W. Turner. Depending on the rarity and value, each separate NFT could cost from $520 to $9,400 and provide issuers with a revenue worthy of investment into the creation process.
Nevertheless, using NFTs to monetize artworks isn’t reserved only for well-known establishments. For example, galleries and museums of any scale can contact Digital Basel and get listed on the marketplace among other NFT galleries. In addition, they can get assistance with setting up the minting conditions, token creation, promotion, compliance, and even dealing with collectors. Thus, any art institution will access the benefits of NFT art even without fully immersing in technical matters.
Are NFTs good for artists? There are various opinions on the topic in the art community, but it’s generally accepted that there are many ways in which NFTs benefit artists.
While many individuals express concerns about protecting their intellectual property in the modern digital era and see NFTs as an example of this issue, the reality is that NFTs actually help art owners secure their art. Imbued in the token, proof of ownership ensures that any party can verify the rightful NFT owner. Moreover, compared to the watermarks that some artists use to protect their creations, nobody can erase those proof of ownership from the artwork in photo editors. Thus, it makes NFT artists feel more secure and confident in the value of investing in tokenization, even without considering other NFT art benefits.
For Art Collectors
Build a more diversified portfolio
In the traditional art world, collectors are often limited to buying physically available art. This limitation affects not only individuals who may not be able to travel abroad but also those who can access exclusive bidding or rival millionaires to buy original works. On the contrary, NFTs democratize art bidding allowing anyone to purchase digital copies of original artworks and consequently diversify their portfolios from any point in the world.
Save art for future generations
Related to the previous claim, this benefit is valuable not only from a philanthropic standpoint. Who wants to leave precious masterpieces in the hands of some millionaires or perish from decay? Exactly, nobody.
That's precisely where NFTs come into play, offering an opportunity to preserve artworks within the virtual realm as everlasting digital copies. It not only safeguards physical masterpieces from decay and unauthorized sale but also allows collectors to responsibly access them through digital twins.
Ensure adherence to intellectual property rights
In the Web 3.0 era and the growing popularity of artificial intelligence, ownership tracking, and verification have become more complex tasks. Today, it’s even more evident that putting a watermark or simple signature isn’t enough to assure collectors of the origin of the asset. However, there is a solution – NFTs.
The same as tokens help creators and galleries ensure that nobody violates their intellectual property rights, NFTs can be considered by collectors as proof of origin. With all transaction and ownership history integrated into the token, collectors can verify that the art isn’t stolen and the token represents real artistic value, not some generated amalgamation or AI-generated content.
Ultimately, there is no doubt that NFT will become even more disruptive to the traditional art market. With the benefits of NFTs for artists or art institutions, this new technology will stay for years ahead and change how art is bought, sold, and collected.