Dipping into Blockchain with Art NFTs

If you are of a certain age, or in general a later technology adopter but want to get involved in Blockchain investing, it can be daunting to know where to start. However, it may make sense to start looking at art, namely digital art via NFTs, or Non-Fungible Tokens.

NFTs are essentially a unique string of numbers that cannot be replicated that exist on the public blockchain. The blockchain is essentially an open database in the cloud that is very difficult to hack, is public and not controlled by any one person or entity.

Art NFTs can be a great way to understand the power and opportunity of the Blockchain. Unlike crypto currencies, also built on the blockchain, Art NFTs are something that can be enjoyed and appreciated like any other piece of artwork. That unique code assigned to the Art NFT gives the digital art provenance, much like the Mona Lisa in the Louvre has been validated as the original. The $10 print of the Mona Lisa at any local art store looks the same, but is nearly worthless. The NFT validating the art gives both provenance and value as the original.

NFTs are very new, only a few years old, but have attracted the attention of a wide swath of society. Sports teams, business owners, celebrities have created NFTs of all sorts of digital images. For example, Jack Dorsey, CEO and co-founder to Twitter created an NFT of his first tweet and sold it for $2.9 million and donated the money to a charity. Anything digital can be made into an NFT, and while the market spoke loudly that Jacks first tweet that day worth $2.9 million, very few would argue its art.

However, the artwork you appreciate that has been digitized and made into an NFT can be a terrific way to get in the blockchain game. Art is something tangible and as an asset class has in fact done well as an investment. In fact, contemporary art has outperformed the S&P handily from 1995-2020. Art galleries such as Sotheby’s and art shows like Basel are all now featuring NFTs as part of their core offering.

NFTs do not need to be only enjoyed when you hop on your device. Like a pastel or acrylic that hangs in your living room, digital art can be enjoyed every day with new frame devices like the one famed venture capitalist Fred Wilson of Union Square Ventures uses. Fred’s blog post also reiterates the investment upside that NFTs create for the digital art world.

NFTs make unknown artists more accessible, and creates capital for those same artists to do more of their work. If you like an artist, purchasing their NFT as an investment is a great way to use a very old and familiar market, the art market, to get familiar with a very new and potentially lucrative investment, the blockchain.

Art is an alternative asset class and as such has more inherent risk. Blockchain too is an alternative market place, so be sure to enlist the objective guidance of a financial advisor that is experienced in alternative asset classes before committing any substantive capital to this new world.

Related: 5 Cryptocurrency Predictions for 2022