You don't have to look too far right now to see terms like crypto art and NFT being banded around. What is all the fuss about? And what could this "gold rush" mean for photographers?
In many ways, the pandemic has created a perfect storm for things like crypto art and NFTs to become increasingly popular. Lots of people are trapped inside their homes and are looking for ways to supplement their income, occupy their time, and reach audiences they can't currently get to any other way but digitally. Promises of riches beyond their wildest dreams seem too good to be true. But in these uncertain times, stranger things have happened. Recent success stories around the stock market and cryptocurrencies have made those that missed the boat in the past, more determined to catch the next "gold rush" early. This is why NFTs are getting a lot of attention right now as many think there's gold in them thar digital hills.
What Are NFTs and Crypto Art?
In a nutshell, the most widely accepted definition of crypto art is digital artwork that is published directly onto a blockchain in the form of a non-fungible token (NFT). This token is essentially a digital record of a transaction in the form of a virtual certificate and is stored on the blockchain. Whoever has possession of an NFT has proof they own the digital creation associated with it. These digital possessions can be added to a personal collection or resold just like physical objects often are.
For those that don't know what a blockchain is, think of it as a continuous record of information like an unlimited paged book. This "book" has been made in a way that it is resistant to modification and as a result, is highly trusted. You can't go back through the pages of this "book" and change a few entries in your favor. You also can't rip out pages as they are all chained together. There is a bit more to blockchains and NFTs than this but for the scope of this article that explanation is plenty for us photographers to begin to understand the concepts and how they may apply to us. If those last few paragraphs have turned your brain to mush you are not alone. These new ideas can be difficult to get your head around. If you prefer to learn with visuals, this video explains blockchains and NFTs incredibly well.
The "crypto" in crypto art not only refers to the blockchain but also to how these artworks are bought. Cryptocurrencies such as Bitcoin and Ethereum are used in place of day-to-day money. This means both parties in a crypto art transaction need to have a digital wallet so they can send or receive payment.
The Good: Earning Possibilities for Photographers
Hopefully, you now have a better understanding of what NFTs are which has probably got you thinking about how this could apply to photographers. The majority of us have digital files which we could potentially offer to the world in the form of an NFT. So how do we get started? There are many NFT marketplaces out there and I implore you to do some research of your own to work out which site may be a good fit for you. Some easily accessible places worth looking at are the likes of Rarible and Opensea which are both popular with digital sellers. For those wanting to enter the market a bit further up the food chain, marketplaces like Super Rare and Nifty Gateway is where it's at. Unfortunately for us mere mortals, these two sites are much more curated and are usually only available to more well-known artists by invite. Once you decide on a marketplace you will need a digital wallet so you can receive payment in the form of cryptocurrency as well as pay for any fees incurred for listing your files online. After that, it's just a matter of listing your work in the same way you would if you were selling something on a more traditional online marketplace like eBay or Facebook. One interesting feature of NFTs is that many of these sites allow the sellers to receive a resale percentage if any of their NFTs are ever resold. This means if you sold a digital file today for $100 and a year down the line the original buyer resells it, you would be entitled to a predetermined percentage of the secondary sale. The beauty of all this being on the blockchain is all these transactions are transparent, connected, and traceable. This feature is a great addition to NFT sales which allows the artist to be paid more fairly for their work.
A few other areas of NFTs that excite me as a photographer is the ability to turn work made into multiples. This is a similar idea to having a limited edition print, but instead of having a fixed number of physical photographs produced, you decide on a number of digital files to release instead. Scarcity is scarcity in the art world and many creatives could benefit from having smaller limited runs of their work in NFT form. Another plus point to NFTs is that the blockchain makes digital forgeries close to impossible. As already mentioned, thanks to the nature of the blockchain, entries cannot be manipulated in any way. This means all the information regarding the origin and ownership of an NFT is cast in virtual stone for all the world to see.
The Bad: The Risks and Costs of NFTs
Before you go racing to list your back catalog online, there are some downsides that you need to know about surrounding NFTs and the crypto world. First, there are costs involved with creating the NFTs in the first place. Many crypto art marketplaces use Ethereum as the currency of choice and they require that you pay a fee to successfully execute a contract on the blockchain. The name for this fee is called Gas and the price for Gas fluctuates depending on supply and demand at the time. Artist Brad Colbow shares his experience of listing NFTs in this video and paid $88 to list 10 of his creations online. Fees don't stop there either as any would-be collector of NFTs also have to pay a fee at their end to complete the transaction. In the video example mentioned above, a $30 piece of art would cost a collector a total of $90 once fees were factored in.
There are also environmental costs that need to be considered when it comes to cryptocurrencies and blockchains. It will come as no surprise to learn that these things require lots of computing power to run. Much of this energy still comes from polluting fossil fuels which contribute to the climate crisis we find ourselves in. Hopefully, these technologies will use more and more renewable energy sources as time goes on, but as things stand, blockchains are having an environmental impact on the world. For many people, this won't sit right with their principles.
Another area that I haven't seen mentioned much in these success stories about NFTs is the volatility of cryptocurrency. At the time of writing this, Ethereum is up over 700% from one year ago. While this can be great when the numbers are going upwards, those values can equally come crashing down at any time. If prices were to come down drastically, you could find your NFTs being worth less than it cost for the fees to list them in the first place.
The Ugly: Rights and Uncertainty
So far you have learned about the good and bad side of NFTs and crypto art but there are still many unknowns surrounding this new phenomenon. Unfortunately, I don't have all the answers to the following questions, but I do think they are important questions photographers need to ask. First, what rights does the owner of an NFT have? I have heard people talking about collectors of NFTs being allowed to license out their collection for display. This could potentially be in the physical world like an art gallery or possibly in the digital world like a website or video game. Could the owner of your NFT allow a big company like Apple to use your photograph on their devices somehow? All these possibilities unsettle me as a photographer. I like to control where and how my creations are seen and I expect to be compensated when I grant permission for such things. The thought of my work being shown by people, places, or organizations I don't want to be associated with makes me uneasy.
Another concern I have about NFTs is what stops anyone other than the original creator from claiming they own an image when they don't. I'm sure you have come across the popular meme Nyan Cat on your Internet travels at some point. The NFT for this cartoon cat sold for roughly $590,000 in an online auction recently. I would ask what controls do these marketplaces have in place to ensure the sellers of these items are the original owners? Something as famous as Nyan Cat may be easy to trace but for more obscure things like images from lesser-known photographers, this could be an absolute minefield.
So there you have it, the emerging world of NFTs and crypto art. Contrary to all the doom and gloom I have written above, I do think NFTs have the potential to unlock interesting opportunities for photographers in the future. As things stand though, I feel there are still some important details that need to be worked out. While you may personally think that this new arena is not for you currently, it is still worth understanding the concepts so you are best prepared. It would not surprise me to hear that some forward-thinking clients are already considering the potential of NFTs for some of their big photoshoots. As photographers, it's crucial we know the implications of such things and charge accordingly. Could NFTs supplement photographer's income in the same way stock photography currently does? It's possible. Although I do feel like this current gold rush of NFTs is mostly for big-name creatives that already have huge followings. At the heart of all this is the bragging rights of collectors and the potential for such digital commodities to increase in value. If you don't have a following and your work is unlikely to increase in value, it's hard to think why anyone would want to invest in an NFT of your work. The question marks over rights issues and royalties leave me uneasy too. For now, I'm going to sit this phenomenon out and see where it goes.
Have you looked into NFTs and crypto art already? Think it could be a good idea for photographers? I'd love to hear your thoughts in the comments below.
Lead image by Mediamodifier, used under creative commons.