In recent months, NFTs have burst in and claimed their place in the art world as a bold new protagonist, greeted with enthusiasm by some and scepticism by others. While the art world was shaken by the $69.3 million sale of the artist Beeple’s Everydays: The First 5,000 Days at Christie’s, there is still plenty of confusion surrounding this new art medium and what it actually means to own an NFT.
NFTs (non-fungible tokens) are digital assets that represent real objects like art, music, in-game items and videos. These digital assets are rare collectibles that are registered on the blockchain. Each token consists of a digital file (an image or video, etc), paired with a ‘smart contract’: an encrypted, immutable contract written in code that sets out the rules of ownership and authenticity of an NFT token. As a result, these tokens challenge the traditional ways in which people view, buy, and sell artworks.
Since the tokens are ‘non-fungible’ they cannot be traded or exchanged at equivalency; contrary to a fungible asset that can be readily interchanged as it equals the value of another unit, such as cryptocurrency or a one dollar bill. Fungible cryptocurrencies are equivalent to each other, allowing them to be used for traditional commercial transactions. Non-fungible assets, on the other hand, have unique qualities that can change the value of the good itself, such as real estate, diamonds and art. To simplify, non-fungible goods are ones that cannot be interchanged because they are unique or a rare collectible. As such, NFTs are non-fungible assets paired with smart contracts and presented as ‘tokens’. The combination of the digital file with a smart contract means that the authenticity of an item is guaranteed.
The creation of an irrefutable digital certificate of ownership and authenticity is one of the main attractions and utility of an NFT. As with cryptocurrency, a record of who owns the NFT is stored on a tamper-resistant digital public ledger, known as a blockchain. In a way, NFTs are the 21st-century version of a safety deposit box, revolutionising the way people own, collect and store art.
In order to get digital artwork onto the blockchain to create an NFT, it needs to be minted. This can be done an various blockchains such as; Ethereum, Solana, Cardano and Binance Smart Chain, amongst others. Since Ethereum is the first ever blockchain to allow smart contracts, it is therefore given the first-mover advantage. In order to mint an NFT, one needs a digital wallet, a small purchase of ethereum and a connection to an NFT marketplace, such Foundation, Opensea and Institut - some of the premier art world NFT platforms and marketplaces.
Institut is an NFT platform and marketplace built on the Ethereum blockchain. Invited artists can create an artist profile and mint digital artwork files into traceable, immutable digital tokens. Once minted, the NFTs are placed in the artists’ custodial Institut wallet, and can be offered for sale on the platform. The platform launched in August of 2021 with a groundbreaking international group exhibition curated by infamous art writer Kenny Schachter, titled NFTism: No Fear in Trying. Consisting of works by nearly 100 pioneering artists working in digital, physical and Crypto Art, NFTism marked the dawn of the digital art renaissance. Institut partnered with Arium to custom-build the exhibition virtually using their groundbreaking 3D video-chat Metaverse - where the viewers can come together to explore the exhibition with artists, collectors, and art lovers from around the world.