Back in 2021, the crypto art industry was worth about $100 million. However, as major companies began to integrate NFTs into their business model, the industry grew at an incredible rate. In 2023, the NFT market is worth about $22 billion!
On top of that, experts predict that this market will continue to multiply in value at least until 2025. But what is it about crypto art that creates such incredible demand?
Many people have heard negative things about crypto art, but there must be some explanation for this amazing growth. As we discuss the nature of crypto art, it will become easier to understand why many people consider it to be the future of the art world.
Read on to learn all about crypto art and why it might be a good investment!
What Are NFTS?
When people talk about crypto art, they tend to be thinking of NFTs. NFT is an acronym that stands for non-fungible tokens.
The token is the digital counterpart to the actual image of the art. So what does non-fungible mean?
Fungible means that there are multiple versions of a thing that are all equal. For example, dollar bills are fungible because no single dollar bill is worth more than another dollar bill of the same value. You can trade fungible dollar bills around without changing anything meaningful.
Non-fungible means that NFTs are not like dollar bills. There is only one copy of each NFT, so each example of digital art is unique.
This solves one of the major problems with digital images. Anybody who can view a digital image on their computer can make a copy of it to look at later. However, even if someone does this with a piece of digital art, they will not be able to copy the non-fungible token associated with it.
That means the NFT is a foolproof way to establish the true owner of a piece of digital art.
You can think of this as a counter strategy for counterfeiting. It is now easy for people to create copies of famous pieces of art like the Mona Lisa that are impossible to distinguish from the original thing. But a copy of the Mona Lisa is not worth the remotely as much as the original.
NFTs allow artists and art purchasers to avoid any possibility of counterfeiting. On top of that, NFTs are on the blockchain, which provides certain other advantages.
Blockchain Technology on Ethereum
The blockchain allows people to see the whole history of the owners of a piece of digital art. On top of that, the nature of blockchain technology makes this record immune to counterfeiting.
In the world of physical art, there is always the possibility that an institution can become corrupt and fail to authenticate art correctly.
However, blockchain technology does not rely on any authority to prove who owned a piece of digital art in the past or who owns it in the present. It uses a powerful authentication process that cannot be faked by any means.
When most people think about blockchain technology and the world of crypto, they often think of Bitcoin. However, Bitcoin is a simple form of crypto that can only be used to make transactions.
The second most successful cryptocurrency in history is Ethereum. It provides many functional benefits that Bitcoin lacks. The majority of digital art transactions happen on the Ethereum blockchain.
New Types of Crypto Art
Another fantastic thing about digital art is that it allows for new forms of expression. For example, digital art pieces can invite viewers to interact with them from anywhere around the world. This allows the art experience to become unique for each viewer.
Some forms of crypto also take the interactions of many viewers and combine them for a second level of artistic expression.
Impressive Crypto Art Valuation Examples
As digital art investment has become more popular, people have started to track the most expensive piece of crypto artwork ever sold. Of course, the record for the most expensive crypto artwork continues to update. For now, the most successful piece of crypto artwork ever sold for $69 million.
Of course, the vast majority of crypto art pieces do not sell for nearly as much. However, some artists make even more money by selling many pieces of digital artwork for lower amounts.
Finding Digital Art for Investment
As more and more companies use NFTs, many experts predict that the crypto art market will continue to increase in value. In general, that can make crypto art a good investment because the average price of a piece of digital art will tend to go up in the coming years. As the saying goes, a rising tide lifts all boats.
However, it is still important to make sure that you buy crypto art from reliable sources. You can visit SuperRare to view many examples of crypto art to invest in.
When you consider buying a piece of crypto art, make a point of familiarizing yourself with the artist. The more successful they have been in the past, the better the chance that their artwork will continue to increase in value in the future.
Understand Crypto Art and Its Potential as an Investment
Many people are first attracted to the crypto art market because of the incredible growth it has enjoyed in recent years. However, as you learn more about crypto art, the potential benefits of crypto art become even more exciting. There is a good reason this market has grown more than 200 times larger in the past few years, and it looks like it will continue to grow in the years to come.
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