NFT and the Future of Digital Content

Daz_Jessica

NFTs are going viral! Back in 2017, CryptoKitties launched as a digital trading game where you can breed your own unique cats on the cryptocurrency platform Ethereum and was one of the first NFTs. Fast forward to 2021, an NFT of a collage of 5,000 photos by artist Beeple sold for $69 million! 

The popularity of cryptocurrencies has spiked as more blockchain uses have become available, and NFTs are an exciting new way for digital artists to monetize their content. So let’s take a look at what an NFT is, how it works, and what this means beyond the world of cryptocurrency.

 

What Does NFT Mean?

NFT is an acronym for Non-fungible Token. First of all, what does it mean to be non-fungible? 

Most cryptocurrencies are fungible, meaning you can exchange one with another identical one with the same value. It’s very similar to physical currency systems. A one-dollar bill in the United States has the same value as every other one-dollar bill. 

Being non-fungible means that each piece is unique and has its own value, meaning that no two NFTs are the same and you can’t trade it for another of the same. Think of it like sports trading cards or Pokemon cards. An NFT might be one-of-a-kind, or it might be like a trading card where a limited number were produced. However, NFTs are still linked to the blockchain, just like other cryptocurrencies, so there is a record of the purchase.

 

What Is An NFT?

Now that we understand what non-fungible means, let’s talk about the token part. A Non-fungible Token points to a unique piece of digital content, and when you buy one, the NFT acts as a certificate of authenticity for that content. This includes videos, GIFs, tweets, art, photographs, video games, virtual real estate, and more. Some popular pieces of content that have become NFTs are the Nyan Cat GIF that sold for about $590,000, a photo from Muhammad Ali’s “Fight of the Century”, and Jack Dorsey’s (the CEO of Twitter’s) first tweet with bids as high as $2.5 million.

But people copy art online all the time, and someone can post the Nyan Cat GIF without buying the NFT, so what’s the point? It gets a bit tricky here, but the difference is that while the artist may keep copyright and reproduction rights, you have a token that certifies your purchase of the NFT. For example, you can get your hands on a copy of Picasso’s “The Old Guitarist,” but having a token for it has a much higher value than the copy.

 

What Do NFTs Mean To The Art World?

If you’re an artist, this is a new way for you to get your art out into the (digital) world and potentially make a profit — but we’ll have more on that later. If you’re a buyer, an NFT is another way to support the artists you like or start a new collection. Some popular NFTs have sold for a shocking amount of money, but there’s limited research on everyday artists and how much you can expect to spend.

Now that you know what an NFT is, are you wondering how to get started? Stay tuned for our next article, where we discuss how to make and sell your own NFTs.

This is a repost of the daz blog here -> https://blog.daz3d.com/nft-and-the-future-of-digital-content/

kyoto kid

...so, like I could say a work, like the image of my character Leela as a child soldier that I created over a decade ago, and declare it an NFT. to hold exclusive rights to it so anyone else who reposts or puts it in their collection would have to pay royalties? 

Sevrin

Suggested reading.  Like everything crypto, this will benefit the few at the expense of the many.

The Unreasonable Ecological Cost of #CryptoArt. Part 1 | Medium

Also, for giggles.

Hackers stole NFTs from Nifty Gateway users - The Verge

Ascania

The basic idea is that each of these tokens refers to a specific creative work, and that owning the token is supposed to be kind of like owning an autographed copy of a purely digital work.

Except powered by blockchain technology to make it an environmental nightmare, and with nothing in place to ensure that the person who created the token actually owns the work attached to the token. Yes, that means you can make your own NFT from another person's work.

In short, NFT is a link shortener that costs money and causes environmental damage, with about the same guarantee that something will exist on the other end of the link as with regular link shorteners. There's no guarantee the linked thing either exists, or is in any way unique - people are doing it with tweets, when you can just link to tweets anyway. Even without the environmental issue, it's somewhere between 'bonkers' and 'bullshit'. It's a star-naming scam.

 

Oh, and it's another cause for the current graphics cards shortage.

Sevrin

It gets really weird.

Banksy isn’t the only person publicly destroying Banksy artworks now. In the latest stunt in the craze for NFTs (Non Fungible Tokens), which have captured the imagination of many digital enthusiasts and a growing sector of the art world, a company called Injective Protocol purchased a Banksy work and converted it into an NFT—and then burned it on video.

A Group of Financial Traders Torched a $95,000 Banksy on Camera to Transform It Into a (Maybe) More Valuable NFT Artwork (artnet.com)

kyoto kid

...so if I have it straight, they destroyed an original piece of artwork to (hopefully) make the digital NFT of it increase in value.

While I am fairly adept at workstation design and construction, music history composition and (until Arthritis took it away), performance. I am experienced in computer design, and built my own systems, and have been this new artform known as 3D graphics (all self taught).  I understand the principles of physics, electronics, structural dynamics, mechanics, aeronautics, abstract mathematics, orbital mechanics, and such, yet am "all thumbs" when it comes to the "game" of marketing, and investing.  Business was never my strong suit a I learned two and a half decades ago when I went into it on my own.

So what happens if that bubble bursts like it did for cryptocurrencies a few years ago?  Do they write this off as a "business loss"?   "Stunt" seems a pretty appropriate word for what was done in that video.

The bottom line is I just wish we as digital artists had a way to protect our work.  

Daz Jack Tomalin

kyoto kid said:

So what happens if that bubble bursts like it did for cryptocurrencies a few years ago?  Do they write this off as a "business loss"?   "Stunt" seems a pretty appropriate word for what was done in that video.

The bottom line is I just wish we as digital artists had a way to protect our work.  

It's not exactly a new concept.. https://en.wikipedia.org/wiki/K_Foundation_Burn_a_Million_Quid .. it's art, baby!

You could argue there are mechanisms to protect digital artwork already.. you could also argue that it's not perfect, but nothing in life is.  I think we've had this conversation previously, too.. but speaking as a digital artist myself, whos seen his work ripped off left and right, it's never put me off putting it out there. 

It's annoying, sure.. but such is life.

Ascania

kyoto kid said:

So what happens if that bubble bursts like it did for cryptocurrencies a few years ago?  Do they write this off as a "business loss"?   "Stunt" seems a pretty appropriate word for what was done in that video.

The bottom line is I just wish we as digital artists had a way to protect our work.  

As with all pyramid schemes, they won't make a loss. The scheme is pushed at retail customers and consumers now, who will be left with the worthless bits and bytes when the bubble bursts.

WendyLuvsCatz

I am very close to losing all respect for DAZ and their integrity as a company because of this thread by a DAZ person

 

watchdog79

Is it 1st April already? Is DAZ actually officially promoting this?

Sevrin

watchdog79 said:

Is it 1st April already? Is DAZ actually officially promoting this?

April 1st it will be Onlyfans. 

Luciel

bytescapes said:

One of his takes is that NFTs could be the basis for a digital economy in which 'rights holders' -- the owners of an NFT on a particular digital work -- could be automatically compensated for the use of the work. But that would require an entire infrastructure. It's also the case that the NFTs currently commanding the biggest sums seem to be the ones that would be least likely to earn any money in the long-term through such a mechanism.

Kind of like how the music business works. Though, I mean, though automatically getting money for playing of songs sounds great, it kind of isn't. They basically (somehow) have the right to collect everyones money, and then keep most of it, along with (in some countries) things like ability to block all non affiliated groups from appearing on things like radio. So similar to that I can see the owners getting 10-20% and the system owners getting 90-80%, and thats considering how tiny that's going to be.

The money would have to come from somewhere, so either advertizing (remembering that basically all sites require you to give them some kind of "ownership" rights to display the images already, so it's not clear how that would work) or somehow charging for viewing it. But as people are used to just seeing images without having to get out their credit cards, thats going to take some doing. Theres already millions of images on the internet that people don't have to pay for.

So basically, the only way I can see this actually working practically is as a "give someone support" thing like you said. But, as you can already do that, it seems a bit entirely pointless.. 

Sevrin

Some people made a lot of money in the past year.  They have nothing to spend it on.  Travel is very restricted.  Restaurants, too.  There's no point in buying a fancy sports car if you can't drive it to a fancy party to show it off to people you want to impress.  They're bored, so the spend it on this stuff.

j cade

bytescapes said:

I've been talking about NFTs with a friend (former finance guy) and we've been trying to work out whether there's any point to NFTs. One of his takes is that NFTs could be the basis for a digital economy in which 'rights holders' -- the owners of an NFT on a particular digital work -- could be automatically compensated for the use of the work. But that would require an entire infrastructure. It's also the case that the NFTs currently commanding the biggest sums seem to be the ones that would be least likely to earn any money in the long-term through such a mechanism.

My other suggestion was that NFTs might be great for money-laundering or tax evasion. Money launderers are constantly buying stuff for more than it's worth in order to be able to exchange 'dirty' money for clean. As for tax evasion, if the tax authorities ever allow you to claim NFTs as a legitimate business expense -- or take a loss on money spent buying NFTs -- then the tax shelter accountants are going to have a field day.

There's a definite "Emperor's New Clothes" feeling to NFTs currently. People are buying NFTs on particular intangible artworks in the hope that someone will come along and take them off their hands for more than they paid. But that's based on a shared perception that the NFT is worth something and that you're going to continue to be able to resell it. If that consensus ever wavers, the whole house of cards comes down.

In the context of the kind of people who are making art using DAZ tools, I think the best way to see NFTs is as being like Patreon or ko.fi -- a way to toss the creator a few bucks by way of support. Buying an NFT on someone's 3D art is not going to make you rich and you don't really 'own' anything, but you've paid to help someone make art. I could see DAZ recommending them that way, instead of jumping on the "We're all gonna be billionaires!" silliness.

Two other observations: one is that NFTs don't have to be used for 'ownership' of intangible digital artworks; an NFT could also be used as a record of ownership of a physical object, such as an actual artwork, or a piece of land, or for intangibles that have actual exploitable value. Using them that way makes lots of sense. The other observation is that NFTs don't have to be a planet-killer. The problem is that cryptocurrency is tied up with the idea of "proof of work", which is a computation that is deliberately made as difficult as possible -- and thus expensive to compute -- in order to keep money scarce. But "proof of work" and the basic book-keeping that goes into making a record on a distributed blockchain can absolutely be separated, and NFTs only really require the book-keeping. As far as I can see, there's no reason why NFTs need to consume so much energy.

this is very true in the physical art market as well 

 

kyoto kid

bytescapes said:

I've been talking about NFTs with a friend (former finance guy) and we've been trying to work out whether there's any point to NFTs. One of his takes is that NFTs could be the basis for a digital economy in which 'rights holders' -- the owners of an NFT on a particular digital work -- could be automatically compensated for the use of the work. But that would require an entire infrastructure. It's also the case that the NFTs currently commanding the biggest sums seem to be the ones that would be least likely to earn any money in the long-term through such a mechanism.

...this is what I was hoping for as a digital artist, to maintain ownership of my own work.  Particularly for realising a Net Publication vs. the "dead tree" format which while it can be copyrighted and characters trademarked, involves having to find a publisher who will "buy" the work (the old adage of "wallpapering your flat with rejection slips" comes to mind) who will not force you to alter what you create to make it "marketable" (and we all know what "sells" these days), who also has ready access to physical printing resources and distribution chains that an individual doesn't . 

My other suggestion was that NFTs might be great for money-laundering or tax evasion. Money launderers are constantly buying stuff for more than it's worth in order to be able to exchange 'dirty' money for clean. As for tax evasion, if the tax authorities ever allow you to claim NFTs as a legitimate business expense -- or take a loss on money spent buying NFTs -- then the tax shelter accountants are going to have a field day.

There's a definite "Emperor's New Clothes" feeling to NFTs currently. People are buying NFTs on particular intangible artworks in the hope that someone will come along and take them off their hands for more than they paid. But that's based on a shared perception that the NFT is worth something and that you're going to continue to be able to resell it. If that consensus ever wavers, the whole house of cards comes down.

...sadly these two tend to be more the direction this is heading again from what I have read and understand.(never was a good "gambler").

In the context of the kind of people who are making art using DAZ tools, I think the best way to see NFTs is as being like Patreon or ko.fi -- a way to toss the creator a few bucks by way of support. Buying an NFT on someone's 3D art is not going to make you rich and you don't really 'own' anything, but you've paid to help someone make art. I could see DAZ recommending them that way, instead of jumping on the "We're all gonna be billionaires!" silliness.

...would be nice, but again, based on what I have read both here and elsewhere, the last statement seems to be the big draw, in a way making digital; artworks just another from of "cryptocurrency".

 

SnowSultan

I might take an interest in this when the works of talented artists are being bought and sold rather than a bunch of rich and/or famous people buying memes, Tweets, and renders containing copyrighted material from each other. Right now, they're just polluting the environment and making it impossible to buy graphic cards.

Matt_Castle

NFTs are one of the biggest scams of the moment; there is absolutely no guarantee that the person who minted it as an NFT was legitimately the rights holder, any limitations to stop multiple NFTs being made from the same artwork, or any legal force to establish that holding that NFT genuinely means you own "an original" of that artwork. (Only a social contract that, if maintained, means that because of the first point, a lot of artists have had their work stolen).

Combined with the fact that many artists here are acutely aware that bitminers are a factor in the supply shortage in graphics cards* (even if we completely disregard the environmental aspects), I'd say that this kind of announcement is not reading the room at all.

*Perhaps not the main cause of the silicon shortage, which actually seems to be the massive number of workers and gamers needing/wanting to upgrade their systems because they're using them more heavily because of the pandemic, as well as the need for massive infrastructure upgrades to support all the additional internet traffic, but every additional demand increases the supply problem even more, by encouraging scalpers to jump on stock and then resell it at obscene prices.

 

AlmightyQUEST

I really hope DAZ reconsiders promoting, encouraging, and supporting this. I don't have anything to say on the subject that hasn't already been said about the negative impacts of this in the environment and on artists, except to say that if you want to support an artist, see if they are taking commissions or have a patreon or similar means of supporting them financially.

Matt_Castle

I don't even really get how this idea took off.

The concept of "the original version" is utterly meaningless with digital art (other than maybe as the source files), as digital artwork is trivially easy to make a flawless copy of. Indeed, every version of a digital artwork you can ever possibly witness is a copy, having had to have been transferred between RAM/VRAM/disk/display buffer in order to actually create, display and store it.

Witnessing the original isn't somehow more compelling and valuable than witness any of the million copies that could easily be made, because they can all be bit-for-bit identical.

Ascania

Matt_Castle said:

The concept of "the original version" is utterly meaningless with digital art (other than maybe as the source files), as digital artwork is trivially easy to make a flawless copy of.

Yet somehow within a week of an image showing up on the internet 90% of the copies will be smartphone screenshots with visible JPEG artifacts, black bars around the edges, a low battery symbol and various app icons.

kyoto kid

...if there was only some way to copy protect art like the music industry does that was affordable and accessible.

Luciel

kyoto kid said:

...if there was only some way to copy protect art like the music industry does that was affordable and accessible.

So a group of painters turning up round someones house and demanding they pay them $197 billion in damages or goes to jail for 1,920,000 years?  

Oooooor blanketing all websites with 9013013010410 takedown notices every second because the program they use flagged all pictures using the same red as was used in a painting by someone? 

The music industry are pretty nuts (and theives), and have ridiculous powers that no one should have, so hopefully not like that!

Wolfwood

kyoto kid said:

...if there was only some way to copy protect art like the music industry does that was affordable and accessible.

I think iTunes (music) has been DRM free for several years now. That and cheap streaming services was the key to something close to a balance.

Cheap, less restrictive and not delayed Access bring more money than no or restrictive and/or expensive access. Here in Argentina (like in most of south america) for tv and music piracy was law, and while there is still a lot it has been diminished significantly since we have access to services like spotify or netflix at prices for our particular market. I can pay for 3+ streaming services for what it would cost me a cable network subscription with no explusive content.

So in things that can be easily copied i think we have to deal that some people do not pay for the art (or digital asset) while others do. Is sad and not ideal, but i don't see better solution. Most people in patreon or similar platforms knows that too and adapted without adding restrictions. Like in order to offer some "compensation" to those that patronage, besides the access to the assets (renders, comics, games, etc), they give their patrons other benefits like more exclusive direct accesss to the author (like restircted channels in discord) or chance to make "choices" on the art/game development.

tsroemi

Matt_Castle said:

NFTs are one of the biggest scams of the moment; there is absolutely no guarantee that the person who minted it as an NFT was legitimately the rights holder, any limitations to stop multiple NFTs being made from the same artwork, or any legal force to establish that holding that NFT genuinely means you own "an original" of that artwork. (Only a social contract that, if maintained, means that because of the first point, a lot of artists have had their work stolen).

Combined with the fact that many artists here are acutely aware that bitminers are a factor in the supply shortage in graphics cards* (even if we completely disregard the environmental aspects), I'd say that this kind of announcement is not reading the room at all.

*Perhaps not the main cause of the silicon shortage, which actually seems to be the massive number of workers and gamers needing/wanting to upgrade their systems because they're using them more heavily because of the pandemic, as well as the need for massive infrastructure upgrades to support all the additional internet traffic, but every additional demand increases the supply problem even more, by encouraging scalpers to jump on stock and then resell it at obscene prices.

 

Very important points here, and please let's NOT keep disregarding the 'environmental aspects'!

Sevrin

So if anyone's thinking that NFTs will primarily help artists, it's worth knowing that anyone can mint an NFT based on anything.

No matter how old it is

 

MimicMolly

Art Station is pro-NFT, so of course, DAZ wants to be on the same page to continue with their partnership. That's all I see here.

bytescapes

Catch-22: The real thing stopping me from making a ton of money selling NFTs on my digital art is that I can't make digital art because the people minting NFTs bought up all the graphics cards.

Sevrin

bytescapes said:

Catch-22: The real thing stopping me from making a ton of money selling NFTs on my digital art is that I can't make digital art because the people minting NFTs bought up all the graphics cards.

Just mint NFTs of other people's stuff the way the big boys do it.  Like the Mona Lisa or Victoria 8 or something. 

Matt_Castle

MimicMolly said:

Art Station is pro-NFT, so of course, DAZ wants to be on the same page to continue with their partnership. That's all I see here.

While it might be unwise for Daz to position as anti-NFT, I don't see why a pro-NFT statement would be necessary in that context.

AlmightyQUEST

And unless they changed their mind again, ArtStation backed off on being directly involved in NFTs based on the response they received. Doesn't mean they won't change their mind again, but it's not like this response here should be a surprise if they were looking at AS at all.

Matt_Castle

AlmightyQUEST said:

And unless they changed their mind again, ArtStation backed off on being directly involved in NFTs based on the response they received.

Posted for reference: https://magazine.artstation.com/2021/03/a-statement-from-artstation/