Digital Art
NFTs started as digitalized art, serialized on the blockchain to verify authenticity and provenance. Sotheby’s and Christie’s recognized the concept, albeit listing digital works created by established real-world artists. Like physical art, the digital artist decides if the IP transfers to the buyer. Unlike physical art, digital art can be copied one-to-one with a simple right-click and save. The only way to tell the difference between what’s on your computer and the original is by verifying ownership on the blockchain. Hence, digital art poses many challenges for those enforcing intellectual property.
Data & Utility
However, digital art serialized on the blockchain has one distinct advantage – utility! NFTs can be associated with data, either on the blockchain as metadata, or connected to an off-chain database storing extensive information. Consequently, the digital artwork can act as a membership to a community, game or even a physical venue. For the latter, a physical artwork could be used in the same way. Nevertheless, it would be extremely inconvenient, lugging around a full-sized $6M painting from place to place.
Gaming
Imagine a traditional membership card granting you access to multiple venues at a country club depending on your level: golf course, restaurant, spa, social events, lunch buffets, etc. An NFT can do the same in both the virtual and physical worlds! Membership can be verified against the blockchain using QR codes in real life or upon sign-on to a metaverse game. The NFT will also display the metadata associated with the account.
In a gaming scenario, the data attached to the NFT represents player progression in the form of experience and in-game items or “artifacts”, gained or purchased over time. As the player progresses, the game piece they own is more likely to win, can unlock certain levels, receives invitations to exclusive groups, and so on. In essence, the accumulated data builds equity, making the NFT more valuable. In some games, each artifact is a separate NFT, obtained through winning over time or on a marketplace.
Trade-Off
Users either start the game from scratch, spending weeks or months to achieve certain levels, or they can buy an established NFT on a marketplace at a premium. Hence, they start at the top. An analogy exists in the real world. You can buy a new construction house outside town. Over the years, you make improvements. Meanwhile, during that same period, the neighborhood builds up and becomes known, making your property more valuable. If you can’t wait, you can search for an already renovated property in an established area, paying the premium. In turn, you get instant access to community services and neighborhood prestige. Keeping parallel to the separate NFT analogy above, the homeowner can opt to sell off individual items like furniture, which are not attached to the house. Oftentimes, furniture appreciates with inflation or even becomes valuable as an antique.
NFT and blockchain technology is not required to facilitate gaming account sales, but it makes the process easier. Six years ago, I played Boom Beach. It was tied to my Google account. After a year, I reached level 66, got tired of it and decided to sell my game account. I promptly received an offer on eBay. Then I had to cancel the deal when I discovered that the only way to transfer the account was by handing over my login and password to my Gmail. I played two NFT-based games. In one model, I sold the artifacts that I won or purchased (NFTs) on a marketplace; in another, I sold the NFT itself, which stored my user level and artifacts.
Keeping it Real
Real world art requires much more skill and resources to create than digital art. NFTs, mostly drafted on a computer, are auto-saved in the cloud and easily revised. Moreover, the digital artist benefits from libraries, representing accumulated knowledge from many other artists, presented in a usable form. Traditional painters must fabricate everything themselves: pigment colors, textures, and even the canvas. The non-visible elements, only seen up close in real life, are part of the expression as well.
Perhaps, when people pay millions for physical art, they are not only buying the artist’s work and provenance but also a testament to human creation and evolution. Paintings often depict the collective thoughts of the time. They are not only considering the picture, but also the steadiness of the hand in addition to the ability to visualize an idea or thought. Maybe, digital art represents an expression of an idea meant to be shared and broadcasted instead of held in close quarters, admired from afar. In the digital context, a $6 million investment into a JPEG demonstrates a commitment to a technology that will more likely carry forward for posterity without decay or loss, as well as the membership into an exclusive community.
Alex at Restack.AI
I work as the CEO at Restack.AI, a technology company, based in Oslo, Norway and Lviv, Ukraine. We specialize in creating utility for NFTs through gaming and practical applications. Please contact us via our website to learn more about what we can do for you.
