An NFT for art collectors of a pink cloud visible through a window from a room with a pool

NFTs for art collectors

Capital Art Founder Karabo Morule was recently interviewed in a podcast on “NFTs for African Artists and Art Collectors” by Horesia Nyawade-Ncube, co-Founder and Editor-in-Chief of Vuuqa. Vuuqa is a digital platform that uses storytelling to change the narrative around what it looks like to be an entrepreneur that brings a positive change to the African entrepreneurial ecosystem.

Below are some of the points Karabo made during the podcast.

What are NFT’s and how do we link them back to art?

NFT stands for non-fungible token. An NFT is a unique digital asset on a blockchain that another digital asset cannot replace. Effectively, it is code using cryptographic software on distributed ledger technology that manifests in the form of digital art, collectables, a creative extension of music, a synergy between all three, or entirely new compositions.

There are a few reasons why NFTs have become so popular in art.

Firstly, blockchains are decentralised, so artists feel that NFTs enable them to access art collectors without needing intermediaries, which are typical in physical art, like curators, art dealers, galleries, art fairs, and traditional art auctions. Pretty much anyone can mint an artwork on an NFT marketplace.

Secondly, blockchains track every transaction on the chain, and they are transparent to everyone who operates on the chain. The chain of transactions between the artist and the current owner of physical art is often unknown, significantly if it has changed hands more than once. The art market is fraught with people trying to make a quick buck by creating fraudulent pieces that are not originals and selling them to people who are interested in art but may not have the expert knowledge to know a real one from a fake version. Watch the movie “Made You Look” on Netflix for those interested in seeing how this can happen.

Lastly,  the Ethereum blockchain allows for the inclusion of royalties for the original creator. I love this feature and think that it is great for the sustainability of artists and the creative arts.

An artist might have sold a painting to a buyer for $2,000 ten years ago. If that piece is sold for $200,000 today at auction, the artist receives no income from that sale, and any new art that the artist creates today is not guaranteed to sell for $200,000.

Whereas with a blockchain like Ethereum, the contract on the sale of that artwork could specify that the original artist gets, say, 5% of the sale value every time that artwork changes hands. The nature of the chain makes that is easy to administer.

What are the benefits to the collector buying NFT art?

Most people buy art because they like how it looks, and they think it will complement their home or work environment or wherever they plan on displaying it.

Some people buy art also to support the creative arts.

Some people actually might accumulate enough wealth that they need to put it into different assets to diversify their wealth exposure. Consequently, they buy second houses or land in other places, buy gold, purchase shares, and invest in investment funds, be it mutual funds or unit trusts, or private equity or venture capital. They might keep their money in different currencies, including cryptocurrency, and invest in art, which is another alternative investment. In fact, in the 2020 Knight Frank Wealth Report, ultra-high net worth individuals based in Africa (that is, people who have over $30m in wealth) had 4% of their wealth in collectables, including art, luxury watches, classic cars or luxury handbags.

So, I think those principles apply in the digital space, as it relates to NFTs, too: buy what you like and what you will use for your enjoyment. Do it as a diversifier, and it is not advisable to spend your life savings on it.

As mentioned before, these artworks also contain full details of provenance, which is very beneficial and potentially protects the artwork’s value.

Where can an art collector get NFTs?

It is exciting to hear about two new African marketplaces for NFTs for art collectors. One is called Redsand, and the other is The Tree which has Trevor Stuurman as one of the co-founders

Two other well-known NFT marketplaces are Open Sea and Super Rare, which most people might be familiar with.

OurSong is also a new social NFT platform launched by Our Happy Company. Our Happy Company recently named R&B star John Legend as a co-founder and chief impact officer.

And what about a couple of NFT artists to get art collectors started?

The Capital Art Instagram feed features several digital artists. Check out South African artists Lethabo Huma and Daniella Attfield and Osinachi, considered one of the most bankable Nigerian digital artists.

South African artist Norman O’Flynn is well known for his physical art pieces and has recently produced many digital art pieces.

Where to find the podcast

You can find the podcast on the Vuuqa YouTube channel and Spotify.

If you get an NFT, you should save it on your Capital Art My Collection menu. Set the medium category to Audiovisual-Multimedia, the correct type to select for digital art.

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