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Has NFT become a money-making machine for digital artists?

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LAST week, a youth corper, Adisa Olashile, sold photos of a drummer, Ayangbenle, a.k.a Baba Onilu, in Ibadan, minted as a digital asset, a Non-Fungible Token (NFT)  for $2,098 (N2,042,440).

In a tweet, Olashile said he would mint the photo as an NFT and share the proceeds from the sale with the drummer.

He sold the photos at OpenSea, an NFT platform and gave a percentage of the money to the drummer.

The amount generated from the sale of the photo got tweeps buzzing on Twitter, revealing that the art market is entering a profitable NFT period.


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In March 2021, Twitter founder, Jack Dorsey, auctioned the first tweet he made on May 21, 2006, which read “just setting up my twittr” as an NFT on a blockchain-powered social media network.

Crypto entrepreneur, Sina Estavi, bought the tweet at $2.9 million as an NFT, which was relisted for $48m last week.

 

A viral 2015 video showing Ghanaian pallbearers in action is proof that NFTs could be around for a long time.

Lucas Bean, NFT Web3 Tech Advisor, tweeted that the viral video turned meme had just been sold for 327Eth ($1,047,806).

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The creator, Benjamin Aidoo, also took to Twitter to thank the parties that made the bid and sale of the NFT a success.

At the height of the Covid-19 pandemic, as galleries and art conferences suspended in-person meets, collectors moved online creating an increased demand for digital art.

The industry-wide shake-up has led to the meteoric rise of digital artworks bundled with NFTs.

How did memes and digital art become so valuable?

Why will someone bid millions of dollars for a viral meme on the internet, tweet or picture taken from a phone?

A popular picture, tweet or meme when turned into a non-fungible token with unique metadata cannot be duplicated. This means it is not the picture, tweet or meme that is sold but its digital certificate, which is unique.

NFTs are unique digital items that include images, music, videos, tweetsworks of journalism, and real estate traded on the internet between creators and collectors.

When a token is non-fungible, it means there can be only one such token with unique data. Bitcoins have fungible tokens because there are several bitcoins without any unique traits.

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For example, exchanging one bitcoin for another still leaves you with the same bitcoin and the same value, but NFTs are unique and cannot be exchanged.

An NFT contains two key pieces of information: namely token ID, which is the unique identity of the NFT generated once the NFT has been created and the second is the contact address.

Whoever purchases the NFT does not automatically become a copyright owner of the meme, tweet or photo.

The Ghanaian pallbearers will continue to be the owners and creators of the meme but its tokens,  which translate to digital certificates of authenticity that allow for the trading and tracking of digital works that only exist on screens, belong to the buyer.

“Some buyers think they acquire the underlying work of art and all its accompanying rights. However, in reality, they are simply buying the metadata associated with the work,  not the work itself,” according to information on the World Economic Forum website.

A Thriving Art Enterprise

Sales of nonfungible tokens moved up to more than $17 billion in 2021, according to a new report from NFT data company nonfungible.com.

The report, developed with BNP Paribas-owned research firm L’Atelier, stated that trading in NFTs hit $17.6bn last year, reflecting a geometric rise of 21,000 per cent, from a 2020 total of $82m.

There are more than 2.5 million crypto wallets belonging to people holding or trading NFTs in 2021, which was up from just 89,000 a year earlier. The number of buyers also rose to 2.3 million from 75,000.

People also got better at making money from NFTs, according to the report, with investors generating a total of $5.4bn in profits from sales of NFTs last year. Over 470 wallets managed to make profits in excess of $1m, Nonfungible.com stated.

The most popular category of NFTs was collectables, which accounted for $8.4bn worth of sales. Gaming NFTs such as Axie Infinity represented the second-largest category, racking up $5.2bn in sales.

OpenSea is the Amazon of NFTs. It’s an online marketplace that allows people to easily create, sell and buy NFTs.

According to Dune Analytic, it is one of the largest NFT trading platforms, with more than 1.5 million active users.

Author profile

Amos Abba is a journalist with the International Center for Investigative Reporting, ICIR, who believes that courageous investigative reporting is the key to social justice and accountability in the society.

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