The NFT Craze and Its Impact on the Future of Art and Retail

2021 saw the rise of the NFT, particularly in the art and fashion worlds, providing people with a new way to immerse themselves virtually in those creative universes. But NFTs are a confusing concept to wrap your head around, so we’re here to explain what precisely an NFT is and what it means for the art and retail world moving forwards.

Definition of an NFT

NFT stands for Non-Fungible Token. Crypto-currency blockchains like Ethereum authenticate these digital tokens and make it easier to own and sell digital content such as videos, songs and images.

The creator uses NFTs to signify ownership of their digital item, almost like a creation receipt. Van Gogh’s painting has appeared in prints, blankets, and mugs. 

So in the NFT world, Van Gogh would have the creative ownership of A Starry Night, a digital signature. Nothing can ever be created uniquely for the first time more than once. If A Starry Night were an NFT, all the subsequent images would be the screenshots people take for free. 

Meanwhile, the ‘non-fungible’ aspect of NFT effectively means that it’s a token that can’t be traded, making it unique. In money terms, one pound coin can be traded for another, and the same goes for bitcoin (fungible), but in keeping with the analogy of A Starry Night, you cannot trade that painting for another as it is the only one of its kind. 

NFTs can also be used in fashion, providing luxury brands with another platform to promote their products. It allows for more profound levels of creativity like incorporating AR like RTFKT did, allowing people to try on their sneakers virtually before allowing them to purchase a physical pair. 

Gucci took the creative process one step further and promoted their latest fashion collection, ‘Aria’, by minting an NFT of a short film, proving the versatility of NFTs through the union of different art forms, enhancing their image on the blockchains and creating a new, engaging way to interact with the brand.

PFPs

Underneath the branch of NFTs is PFPs (Picture For Proof or Profile Picture). These consist of one image, say an anime-style character but with a different accessory on each picture, like a hat or a scarf. This allows creators to create hundreds of similar but different images to sell as unique art pieces. 

The Ethereum Blockchain

As mentioned above, Ethereum is a crypto-currency blockchain like bitcoin that is the primary market of NFTs. It prides itself on being a new and innovative way for creators to make money (ETH’s primary currency).

Ethereum, like most crypto sites, operates under a lot of power, causing a lack of sustainability that concerns people considering current social affairs. Some blockchains consume less energy, but the shift towards sustainability has been a slow one. 

Due to the popularity of NFTs on Ethereum, it’s no surprise that minting a token comes with a price tag attached, one the average digital artist may not be able to make a profit on. It costs $70 to make an NFT, considering how specific platforms relegate the minting process elsewhere.

Other blockchains also support NFTs like Bitcoin and Flow. 

How To Create an NFT

The first thing to do if you want to create an NFT is to make sure your crypto wallet is set up and connected. Here, you’ll be able to store all your cryptocurrency as well as NFTs you mint or purchase.

When setting up your wallet, the biggest thing to know is to make sure that it can be used with whichever blockchain you’ve chosen for your NFTs. For example, wallets like Exodus, Mist and Ledger Nano S are best for the Ethereum blockchain. Still, when it comes to NFTs specifically, you may want to try wallets like MetaMask or Enjin that support the tokens better. 

When you finally create an NFT, the (digital) world is your playground. Anything goes in minting your tokens which is apparent in everything from the founder of Twitter making an NFT of his first tweet to Logan Paul making NFTs of video clips that can be watched on YouTube for free. 

Crypto sites like OpenSea or Rarible are perfect for starting the minting process. On OpenSea, just upload your file, input the metadata like a title and description, upload it and list it for sale. It is an easy and effective method that will get you off the ground in no time. 

On Raible, where you can mint NFTs for free, first select whether you want a single-edition NFT (sold to one person) or a multiple-edition NFT (sold to several people). After this, the steps are roughly the same as with OpenSea, so whichever one you use, it’s comforting to know that the process is simple to follow on both. 

How To Invest in an NFT

With the increasing rise and popularity of NFTs in certain circles, it only makes sense to learn how to invest in them and reap the benefits. 

The best way to start investing is to get a handhold in the market. You may not be able to purchase the most expensive NFTs on your chosen blockchain, but you can build up a lot of smaller purchases and start making a name for yourself in the business. 

OpenSea is one of the biggest marketplaces for NFTs, with some impressive collections for you to invest in. Collections are the best way to make some kind of impact in the market as the variety and availability make them popular options. The more people invest in a collection, the higher its value rises, and its audience grows. 

Just as in stock exchange and trade in general, the more unique an item is, the higher its price is, making NFT a shoe-in for long term investment with high reward. Popularity plays a key role, with more buyers driving up the value and making NFTs ever more profitable. 

Of course, this doesn’t go for every item sold, but it is an excellent place to get started. NFTs may have speculative qualities at the moment, but if you get in on the bottom floor, opportunities may very well open up to you in the future.

Challenges of NFTs

Naturally, NFTs aren’t the perfect vehicle for digital art and fashion creators or indeed for the environment as a whole. Regarding the latter, blockchain companies like Ethereum have a large carbon footprint, and cryptocurrencies consume a large amount of energy, contributing to long-term damage to the environment and climate change. 

Pioneering creator Beeple – or Mike Winkelmann – pushes NFTs to become more sustainable by investing in renewable energy sources and conservation. However, his work is still producing large amounts of carbon emissions for now. 

NFTs are also exorbitantly expensive, making the crypto phenomenon inaccessible to small-time digital creators who don’t have the kind of wealth and backing. Twitter, for example, sold his tweet for £3 million.

Think digital artists on social media platforms such as Tumblr and Instagram or less prominent fashion designers. It will be hard for them, as less famous creators, to exercise control over their work, especially in the face of a market saturated with digital pictures that barely count as artwork along with fraud. 

The issue of fraud in NFT leads to some interesting points. It seems remarkably easy for someone to take a digital copy of the artwork, put their token on it and then sell it forward, negating the supposed security and promises of ownership that NFTs are built on. 

This also links to the screenshotting trend. Many times, the question has been posed in social communities – why pay ridiculously exploitative prices for a small piece of art when you can simply screenshot it for free? The screenshots can’t be sold or validated as original, but it is enough for people to own them within their confines and at their leisure.

Benefits of Using NFTs

That isn’t to say that the process is without its perks. The NFT trading process is safer and more secure and has a longer shelf life without the risk of physical decay. So long as you remember your password or upload your NFT purchase to a safe location, you will be able to access it for posterity. 

It also adds a level of accessibility and organisation. Instead of taking up wall space or travelling to a gallery, your digital art collection can be viewed entirely from a smartphone, which is also perfect for remote working. Similarly, your digital fashion accessories and clothes are better organised, allowing you to access them at any time.

It also provides a gateway into the world of virtual art and fashion, with all the possibilities of the metaverse being placed at your fingertips. This can help to give creators, buyers and collectors more freedom to explore and experiment, reinvigorating the world of art and making the experience more immersive and engaging. 

Ownership and authenticity are two other significant advantages to the use of NFTs. This helps artists lay claim to their artworks and prove they have the rights to their artwork in the face of fraud or other security risks. Copyright is essential for creatives to hold onto so that they don’t lose control over things they made with their own time, emotion, and hard work.

The authenticity, meanwhile, is provided by blockchain security, keeping the data of the NFTs safe and ensuring that the artwork remains unique to the original creator. 

NFTs and the Future of Art

Art has been making more profound and more significant strides into the digital medium in recent years. NFTs provide a logical next step for artists to make their mark on the world and unleash their creativity. 

By providing artists with more financial control over their art and solid digital claims to ownership for added security, art can remain an exclusive and unique medium in a market that’s quickly becoming oversaturated. 

Increased focus on ownership gets artists recognised for their work and talents instead of it all being lost in the densely crowded digital revolution. And with personal creative control, there’s no limit to what artists can dream up, using technology to enhance their art in new and exciting ways and getting a foot in on the next big thing in the art world. 

NFTs and the Future of Fashion and Retail

While the impact of NFTs on the art industry is more profound and widespread, it is also having an increasing effect on fashion, which can only improve as the popularity of NFTs rises. 

Luxury Fashion Brands

Several luxury fashion brands like Gucci, Louis Vuitton and Prada have leapt forward onto NFTs, expanding their market and broadening their horizons. It signifies the union between physical garments and digital representations, with the 3D fashion files becoming essential assets to the industry’s progress. 

Fashion items, like the Baby Birkin, a digital representation of the famous Hermes bag, will be worth even more in the future than they are now, highlighting the profit that can be made from investing in NFTs. 

NFT marketplaces have made luxury fashion brands even more exclusive and iconic than ever before. Just think of the digital fashion house The Fabricant, who made pioneering waves in the NFT world when they sold their famous Iridescence gown on the blockchain for $9500. 

NFTs’ claim to uniqueness and exclusivity is a significant mark in favour of luxury fashion houses, enhancing their image with clothes you would never be able to find anywhere else. Digital garments come with many opportunities for investors or avid fashion collectors, with top brands continuing to make the most of the digital renaissance. 

The Retail Metaverse

The rising popularity of digital clothing has also proved beneficial to the increasing versatility and attractiveness of the metaverse, providing more selling opportunities.

The metaverse, which effectively means ‘beyond the universe’, a fitting description for futuristic technology, is not fully realised yet. Still, NFTs guarantee that luxury fashion brands are getting in on the ground floor, promising early success and profit.

In the same way, fashion is becoming a union of the physical and the digital, so too will the metaverse, making the two the perfect partners as we move forward into our virtual future. 

Several retail stores like America’s Walmart are pushing to sell virtual products in the future. There are even metaverse fashion brands beginning to form like Internet Made, allowing retailers to make the first steps needed to make an impact on the metaverse with the virtual reality internet store marking a step up from the current online shopping experience, making it as immersive and interactive as visiting a physical store just with an added sense of wonder.

NFTs will help make these metaverse retailers an exclusive and high-end option, raising the value of the metaverse and providing greater levels of promotion for fashion brands, improving the customer experience and rejuvenating the fashion industry.

More and more fashion brands are designing their products for the metaverse, showcasing great promise in the future of a virtual storefront and NFTs providing more prosperous and more rewarding business. 

Sportswear startup ASRV sold all 60 of their luxury winter jacket NFTs in under 30 minutes, and on the back of that success are making plans to get a virtual store in the Sandbox metaverse. And if fashion NFTs are already astronomically popular without the metaverse, imagine what retailers will be able to achieve when the metaverse is in full swing.

NFTs are the future of art and fashion in the digital world, becoming an integral part of the retail metaverse. Blockchains work tirelessly to give artists and fashion designers a digital platform on par with physical art and fashion for centuries.

In a way, NFTs celebrate the achievements of digital artists and fashion designers. They provide a secure way to trade and enjoy unique items that hold a lot of value in the digital realm, and as the technology develops and more and more creators strive for sustainability, NFTs could prove to be here to stay for the long run.

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