NFTs and Physical Art — Can These Two Legends Co-exist?

Here is the thing, imagine how many billions of dollars Leonardo Da Vinci and Pablo Picasso would make in this age of NTFs? They’d certainly sell more than BAYC and Cryptopunks combined, don’t you think?

I know some people will argue that the works of art wouldn’t be relevant in this modern age because, the skill to even find the right colors was rare at that time, the technology used to develop digital artworks. It is true. There are more colors and powerful tools today, and technology has been nothing but disruptive in the art scene.

Even though I think the latter argument to be controversial but I deem it as a very intelligent point of view.

Now here is my argument. Let’s start with the basics.

What The H*ck Is An NFT?

An NFT (non-fungible token), like the one on the side, is a one-of-a-kind digital asset. Makes sense? No? Okay, sorry. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — you can trade one for another bitcoin, and you’ll have exactly the same thing. An event ticket, however, is non-fungible. You cannot use a Wizkid concert ticket to go watch the #AFCON tournament. If you trade the ticket for an #AFCON one, you’d have something completely different.

Mmh…Interesting! So How Do NFTs Work?

NFTs function like cryptographic tokens, but, unlike cryptocurrencies such as Bitcoin or Ethereum, NFTs are not mutually interchangeable, hence not fungible. While all bitcoins are equal, each NFT may represent a different underlying asset and thus may have a different value. NFTs are created when blockchains string records of cryptographic hash, a set of characters identifying a set of data, onto previous records therefore creating a chain of identifiable data blocks. This cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that is used to track NFT ownership. — Wikipedia

For artists, this means they can create a digital copy of their physical art (such as a photograph or painting), and sell it on the NFT marketplace such as Open. Creatives around the world are pushing the boundaries of digital art to transform the way it’s appreciated on a global scale. NFTs connect the world’s creative artisans with enthusiastic and supportive patrons.

What’s the point of NFTs?

Just like in auctions, it really depends on whether you’re an artist or a buyer.

I’m an artist.

You might be interested in NFTs because it gives you a way to sell work that there otherwise might not be much of a market for. If you come up with a really cool digital sticker idea, what are you going to do? Sell it on the App Store? No way.

I’m a buyer.

One of the obvious benefits of buying art is it lets you financially support artists you like, and that’s true with NFTs (which are way trendier than, like, Telegram stickers). Buying an NFT also usually gets you some basic usage rights, like being able to post the image online or set it as your profile picture. Plus, of course, there are bragging rights that you own the art, with a blockchain entry to back it up.

No, I meant I’m a collector.

Ah, okay, yes. NFTs can work like any other speculative asset, where you buy it and hope that the value of it goes up one day, so you can sell it for a profit. I feel kind of dirty for talking about that, though.

Can Physical Works of Art Be Linked to NFTs?

NFTs (non-fungible tokens) are one-of-a-kind digital assets. Given they’re digital in nature, can physical works of art be turned into NFTs?

The short answer is that yes, physical artworks can be minted and sold online as NFTs. Slowly but surely, NFTs are transforming the way creatives around the world are leveraging the blockchain’s smart contracts, and NFT physical art is making the non-fungible market ever more accessible to artists in all creative disciplines.

NFTs are changing artists’ lives for the better by connecting physical works with impossible-to-pirate digital versions, offering creators more control, a worldwide stage, and greater potential for turning their art into a career. Instead of the traditional route of setting up an art gallery, artists now have easier access to art as a career. NFTs are therefore moving the onus away from the financial imperative of art, and towards the creative, expressive side through exclusivity and authenticity.

The Benefits of Linking Physical Art to NFTs

In August 1911, the first theft of a painting from a museum in history took place. This theft occurred at the Louvre and the stolen art was, the famous Mona Lisa.

On August 21, when the Louvre was closed, an employee, Vincenzo Peruggia who was well-versed with the security systems, entered the museum freely and without being noticed, detached the Mona Lisa from the wall, wrapped it in his jacket, and left undisturbed.

One of the most common misconceptions around the NFTs space is that they can be easily copied and passed around. However, arguably the biggest benefit of linking physical artworks to non-fungible tokens is that sellers and buyers can easily prove the art is genuine. In the 13-year history of blockchain, the network has never been mutated. It has resisted all attempts.

That’s thanks to the unique blockchain technology that stores this information and cannot be altered or ‘faked’. Under no circumstance would Vincenzo land his hand on the Mona Lisa art the way he did, had it been an NFT.

Following an NFT purchase, a buyer can easily prove the NFT is theirs. Whether for valuation or resale, this offers a clear advantage for everyone in the industry concerned about legal ownership of their art. As such, an NFT will retain its value, or perhaps even increase in value, should the buyer choose to sell.

For the artist, many NFT marketplaces (such as OpenSea and SuperRare) ensure that every sale results in royalties, meaning they could stand to continue earning from the same piece of artwork for many years to come. Unlike physical art where the artist rarely knows where their work ends up, NFTs allow for a clear digital history as well as the perk of additional income.

Not to mention, linking physical art to NFTs cuts out the middleman, so the artist can deal directly with the buyer, and enjoy the full profit of the work.

The NFT industry is quickly enfolding with multi-millions transacted every day and billions in weeks. According to Guinness World Records, the most expensive NFT sold cost $69M which was sold by Beeple (a.k.a Mike Winkelmann) to Vignesh Sundaresa. (as of January 26th, 2022).

In contrast, the most expensive physical painting, which is Salvator Mundi by Leonardo da Vinci, sold for $450,312,500 (£343 million), as of this writing.

The Challenges of Linking Physical Art to NFTs

Unfortunately, linking physical art to NFTs does have its drawbacks that buyers and sellers should be aware of prior to finalizing any sale.

For example, should an artist create a physical painting, then sell the digital print as an NFT, they could also sell the physical copy to another buyer, which would be unauthenticated without the NFT.

Additionally, there have been accounts of NFTs going up for sale by someone other than the original creator. This is not an accepted practice, and marketplaces are quickly putting procedures in place to stop this from occurring, look into claims of unauthorized sales, and remove the NFT from sale as soon as possible.

Another potential issue is that in most cases, the buyer cannot display the NFT for the public, as they own the artwork, but not the copyright. Unless the copyright is embedded into the terms of the NFT, it is not the buyer’s right to share or distribute the work.

These challenges are important to be aware of, but not prohibitive. The market will continue to grow, and as it does, it will iron out the wrinkles.

The Future of NFTs and How To Achieve Success Selling Physical NFTs

NFTs provide the grounds for secure documentation of ownership and authenticity and can be a worthwhile investment for collectors due to the fact that artists and creators can put something they own into the market and get recurring revenue every time the art gets a new owner.

These recurring revenues are called royalties. In the smart contract code, the percentage of royalties can be explicitly included and deployed on the blockchain.

If the art has 5% royalty slapped onto it by the previous owner, they will receive 5% of every buy/sell transaction of the art. The upside of NFTs is, authenticity is rock-solid because the NFT contains data of its previous prices and owners.

Many artists who have already found success through sales channels in the traditional art world can now participate in NFT digital art sales to reach larger, international audiences. Creating physical NFTs allows artists to monetize creative works and leverage exclusivity to reach new levels of success.