Is NFT The Future of Photography?
If you haven't heard of NFTs yet you may be in the minority. If you have heard of NFTs and still have no idea what they are, you are not alone. I am just scratching the surface of the world of NFTs and my thoughts on what they could mean for the future of photography. In an effort to put these thoughts on paper, as well as share my experience so far with the process of joining he NFT community and ultimately minting my first NFT, I decided to do what I always do and write about it. I know you have questions. So. many. Questions. Let me share with you a few of mine.
Disclaimer: This article was written during my first two weeks in the NFT space. At a lot has changed since then and you can expect a follow up article in the future.
What the @%#&! is an NFT?
A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. Access to any copy of the original file, however, is not restricted to the buyer of the NFT. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright.
An NFT is a unit of data stored on a digital ledger, called a blockchain, which can be sold and traded on digital markets. NFTs function like cryptographic tokens, but, unlike cryptocurrencies like Bitcoin, NFTs are not mutually interchangeable, so not fungible. While all bitcoins are equal, each NFT may represent a different underlying asset and thus have a different value. This cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that is used to track NFT ownership. Because of their unique identifiers, NFT are being used to secure digital certificates of ownership of artworks. It’s important to understand that an NFT is not:
- An artwork—digital or otherwise
- Rights—to copy, disseminate, or display the artwork
- Exclusive versions of the JPG that serve as the digital surrogate for physical art
What Are The Benefits of NFT's?
The benefits of NFTs apply to any artist who works online. Through their special encryption and ability to be traded, they provide greater security, profitability, and recognition for creators.
Since the internet emerged, digital artists have struggled to maintain sovereignty over their work. Images can be saved, mp3s can be downloaded, and pretty much any kind of digital file can be transferred at will into the private files of an individual. NFTs cannot prevent versions of your work from being saved, but they can act as a standard for determining and generating authenticity.
NFTs are created using something called block-chain encryption. This is a complex process by which the data that makes up a digital artwork is written into many randomized blocks of computer code. These blocks are quite large and, thus, impossible to replicate or duplicate. Each NFT’s encryption “signature” is stored in a special virtual ledger, so that any version of that file appearing in the future can instantly be recognized as an original or a copy.
This means that online artists can now begin producing and selling their work as they would in the physical world. The sense of uniqueness and authenticity created by block-chain encryption drives up the value and demand for digital artworks in ways never before possible.
Before NFTs, there was little incentive to purchase online art unless you wanted it to be printed and mounted somewhere. Why purchase a digital image or a song when it can be saved via screenshot or downloaded from Youtube? This, of course, is disrespectful and detrimental to the livelihood of creators, but a common occurrence nonetheless.
NFTs redefine digital art as something unique and irreplaceable, like a photographic print or a painting. Now there is greater reason (beyond morality) to own an artwork as an NFT; digital media is no longer just a source of entertainment or stimulus, but a repository of value and an object of scarcity. For the artist, this means more money to be made from each piece of art produced, and vastly increased viability for digital art as a business or career.
Finally, NFTs are quickly rising in popularity which means that artists turning their works into tokens will have a great deal of visibility on digital marketplaces. As the scene develops, these platforms will become akin to real-world auction houses and galleries, providing artists with the representation, recognition, and compensation for their work they deserve.
While you may not have heard of an NFT yet, if this is your first time hearing about cryptocurrency, you should probably climb out from under that rock. A cryptocurrency, crypto-currency, or crypto is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC).
Punks Sell But Who's Buying?
One look at the digital assets that sell on NFT websites like Foundation, OpenSea & SuperRare will make anyone ask the same question. WHO would buy these and WHY? The most expensive NFT sold to date was minted by Beeple and sold through Christie's at auction for 69 million dollars. CryptoPunks, have also sold for millions of dollars including a masked alien punk that fetched 11.75 million. If that looks like a pixelated JPEG to you, you can skip your next vision appointment because that is exactly what the buyer received in return for his or her purchase.
In my short time browsing around the platform and talking to individuals who are involved in the NFT Community, I feel like I have identified three common buyers. The first appears to be artists supporting other artists, which of course is applaudable and inspiring. The second buyer profile appears to be the big fish, making multiple, sometimes hundreds of large purchases that would make one think that they must have lost their minds, but I'm guessing if they had, they would be out of money by now. Further investigation leads to speculation and rumors that these buyers have somehow come into possession of large amounts of ETH at little or no cost to them, which they are now spending on those who have large followings, or who work diligently to further the NFT community and cause. The third are those who are simply having fun and trying to turn a profit along the way.
If That's True, Then What's The Problem?
The answer to this question is the one I find most thought provoking. You have to remember that I am a nature photographer, who makes his living selling tangible artwork that sells to collectors all around the world. The people who purchase my work are doing so because they enjoy the work itself and enjoy displaying it in their homes and offices. Sure, some may partially buy into me as an artist, or with hopes of their investment increasing in value but at the end of the day it is for the love of the artwork that I am being rewarded and feel good that I am providing them real value in return.
My concerns for photographers in the NFT community surround the struggle that some will ultimately face when it all comes crashing down. I'm not referring to NFT's themselves, I think those are here to stay. I am referring to the buyers. Building and maintaining a thriving art business is quite difficult. It requires a constant stream of both new and recurring clients to maintain any level of success.
When supportive, buying, fellow community members begin to thin out and the big fish cash in their digital chips and bounce, there simply won't be any average people willing to fork over their hard earned money for a digital file that anyone can right click and save to their computer. The value of your Jpegs, both to the community and to the consumer market at large will dry up completely. Of course, real investors could enter the market and I am sure some already have, turning a profit on the top 1% of the NFT's with the greatest hype and scarcity, but the instant those buyers catch wind of the opportunity sliding they will close their wallets and return to their relationships with Wealth Management Teams, Wall Street and real-world assets.
To Shill Or Not to Shill? That Is The Question.
Because of the current design of the community with artists propping up fellow artists, there is a whole lot of shilling going on. There are large numbers of people speaking about their lives being changed forever because they sold a photograph for 3 ETH, making the life they have always dreamed of come true or talking about quitting their day jobs after a few successful sales. Maybe these are younger people with lower costs of living. I just hope people think clearly before making a life changing decision.
There are absolutely exceptions to this, like my very deserving friend TJ Thorne who sold out an entire collection of NFT's created from a four year journey photographing moving water in just three hours for over 120k. This happened in large part to the support TJ received but also because of the person TJ is himself, a humble & likable guy. I have added additional information about this topic from TJ below, who is far more experienced in the subject and shares some great information.
This is the type of real world support, of truly talented artists, that I would like to see more of, that I feel could build up and advance the entire platform. To continue to thrive moves need to be made to begin providing real value to new clients outside the NFT community. Purchasing a lackluster photograph from an artist as a reward for simply helping propel the cause forward is helping nothing but the cause itself. Is is not a sustainable business practice.
But Wait, There's More.
Cryptocurrency and NFTs are swirling with controversy, filled with what ifs and full of hidden dangers lurking in the shadows. The energy used creating ETH is constantly under fire in the media, despite the rumors of cleaner sources of mining and minting to come in the near future. While I will be the first to admit I don't spend too much time obsessing over my carbon footprint, I was scratching my head reading about the potential negative effects on the environment.
The real-world implications of lost wallets, broken blockchains & deleted assets are stories we will continue to hear about in the coming years. As the government continues to investigate and form new laws regarding taxation and any other number of financial costs associated with NFTs, many who have been living it up in the digital world will find themselves in very real trouble in the physical one.
I also read a number of tweets from members of the community speaking about taxes and the IRS like it didn't pertain to them. One person even suggested that the Jpegs they were purchasing were a tax write off! There is one thing I know without a doubt. The IRS will be taxing your earnings, just as they do any other earnings you receive and you will ultimately pay them. If you honestly think buying a Jpeg online is a business expense, please do yourself a favor and consult an actual tax professional.
Um Hello!? Didn't You Just Mint Some NFT's?
Yes I did. This is the official collection of Aaron Reed Photography NFT's I minted prior to giving any of this much thought, simply because I wanted to participate in something that seemed like it may be a valuable and interesting new platform for photography in the future. I made an attempt to offer something truly rare by minting images that have already proven their worth will real world value of over 400k each.
What Just Happened!?
After spending two weeks on Twitter, learning about NFT's and being part of the community, my thoughts began to change. Participating was also exciting and the community aspect very refreshing. I ultimately decided to launch a project on Open Sea titled The Laws of Abstraction, to see if I could sell any NFTs without deep & long term involvement in the community. After a few minutes I sold my first NFT! I was truly excited to sell one, not because of the money but because it was new and exciting. Then I sold 4 more! Then 8 more! In less than 24 hours I had sold out the entire collection of 36 NFTs! What just happened?
My first collection Laws of Abstraction sold out in 24 hours. Recently, I have launched Laws of Abstraction II, titled ArtRocks, made up of 1/1 Photography NFT's of semi precious jaspers and other stones. I am not marketing this collection in the same way I did my last project, allowing it to grow organically. There are many things I enjoy about the NFT space, but shilling my work constantly is not one of them. If that fact keeps me from landings sales, so be in. My 1/1 collection on Foundation has done well so far, selling 4 images ranging from $2000 to $12000 USD.
So What's NEXT!?
I must admit some of my skepticism of the community and NFTs themselves was unfounded. The community itself is actually quite inspiring! I still believe this platform can become something more than what it is currently. For that to happen, it will require a more sustainable business model, real world value to offer true collectors and the overall buy in of large scale investors to make that happen. The applications for the technology itself are endless. That doesn't reduce the number of financial, emotional and creative casualties that could occur along the way.
So ARE NFT's The Future of Photography?
Photography is a beautiful art form and has enriched countless lives in so many ways. No one will be sending NFT's of their children to grandma and grandpa in the future, but they certainly have a place in this world and the world of art. Those who are participating are highly creative, motivated and are thinking outside the box. That combination will always find successs! As someone who sells large photographic prints, I already feel like we have done ourselves a disservice by creating beautiful works of art that ultimately get resized, cropped and chopped to fit into a tiny square on our favorite social media platforms, so untimately I would like to see NFT's evolve into large scale art installations and gallery shows. I am confident we will get there, probably sooner than later!
A Few Words From TJ Thorne
As mentioned above, my friend TJ has been involved in the NFT space for some time and just launched his first collection with great success. He shared the following with me, which I have pasted here, with his permission in it's entirety.
Aaron and I have talked about this at length.Here are my thoughts… take them or leave them.There are a lot of misconceptions and misunderstandings about what an NFT even is. Before I get into my explanation, please understand that whether or not anyone understands it.. the world is going digital. It HAS been going digital. How do you watch your movies now? VHS? DVD? Or streaming? Do you still buy video game cartridges? What about digital cameras? It started in the entertainment industry and it’s starting to filter into the art industry. I’m sure you’ve all heard of the term “digital artist”, right? How about motion graphics design? If you hire a graphics designer to make your business logo.. are they doing it on paper and handing it to you or do they do it digitally and send you a file?
The same way that there are people who value physical things there are also people who value digital things. People who will pay money… GOOD money.. for digital assets. This was a thing even before NFTs. Agree with or understand the people who value digital assets or not… that’s just fact.So what is an NFT? Imagine there is a single Babe Ruth baseball card in the entire world. ONE. But… it’s digital. To some people that digital scarcity has value. It is undeniable and traceable PROOF that they own it. That’s what the whole point is… the PROOF that they own it. Think of it like a digital Certificate of Authenticity that cannot be forged. One of the first NFTs to gain traction were the CryptoPunks. These were given away for free in 2017. You just had to claim one. They’re all algorithmically created. 10,000 “punks” made out of 10,000 pixels, no two alike. Each has certain traits and some traits are more rare than others. The combination of those traits determines their value based on rarity.
So why are they selling for millions? Because they’re historical. Because people like them. Because they’re collectibles (remember Beanie Babies? Pokemon? Magic the Gathering?).NFT art is simply that. A one of a kind artwork that lives on the blockchain that some people value. Some people buy them to keep.. some people buy them as investments. And yes… they make 5… 6… even 7 figures of profit. And QUICK.I know that some people will say “just download the picture!!! Same thing!!!” Yeah sure.. download the picture. But again.. it’s the PROOF that you own the original. Go ahead and buy a print of a Picasso. You don’t own a real one. It’s the same exact thing…. just in the digital world.
I know that some people will say “Well someone can just take someone else’s photo and sell it as their own.” Well… yes. But have you ever heard stories of people buying fake Picassos? Fake Rembrandts? Same thing… just digital. Buyer beware. Do your own research. The proof is all on the blockchain.And this is just the beginning. NFTs will, and are becoming more mainstream. Look at NBA Top Shot. You can OWN a digital highlight of a historical sports clip. The possibilities on the blockchain are endless. Buy a NFT for a movie and OWN the 20 different outtakes that Jack Nicholson improvised for a scene. Buy a NFT movie ticket. Down the line.. maybe that NFT movie tickets gets you into an exclusive event. Buy an NFT ticket to a sports game and maybe down the line the ownership of the NFT gets you into a meet and greet. These are the types of things that you will start to see on this new version of the internet… which is called Web 3.0.
An internet that is more decentralized.. more self-communicative.. more immersive. Technology is moving fast.As for the accusations being lobbed that it is a scam/pyramid scheme.. no one is being deceived. That’s what fraud/scam is: deception. Everyone knows what they’re getting. There is no pyramid. Fees for using the service? Yes. PERPETUAL royalties (!!!!) to the creator/artist? Yes… if they set them in the contract. But once you own an asset it’s yours to do with what you please. If you sell it… you get the money less the royalty that goes to the creator/artist. This is a win for artists and creators who get to be perpetually paid for their work on the secondary market. An artist getting a piece of the pie that they baked. Imagine if you sold a print for $1,000 and then the person who bought that print sold it for $1,000,000. You get none of that. On the blockchain.. you do.
Yes, the environmental concerns are real. To that point, Ethereum, which is where much of the NFT world resides, is transitioning to “proof of stake” instead of “proof of work” which is much more energy efficient. This is what the blockchain Tezos runs on, which is lauded for its minimal energy usage. Personally, I have a very small carbon footprint. I rarely fly or travel at all. I always buy used. I don’t eat very much (about once a day).All of this is still so early. Do I think that you have to get involved or get left behind? No. This is simply adjusting business to market trends, and this is just one trend of many.I hope this helped you understand a little more about all of this very confusing technology.
You don’t have to use it… you don’t have to agree with it.. you don’t have to understand it. But blockchain technology will indeed become more and more of a part of the mainstream world. How that plays out for the photography industry is anyone’s guess.
Real Art, For Real Walls, of Real Homes.
If you made it this far you must be REALLY bored. While I am not the most prolific writer or the most inspirational photographer, I am a better photographer than I am a writer. :) If you would like to see more of the gallery quality fine art photography prints that I offer you can browse my online galleries for sale on this website. If you want me to sell you a JPEG instead, don't worry I've got you covered. Either way, it's all love.