What are NFTs? Digital tokens powering new economy for local artists
NFTs, non-fungible tokens, are one-of-a-kind digital tokens that are authenticated through a blockchain, the same technology that powers digital currencies like Bitcoin. (Joey Lavergne / CTV News Ottawa)
OTTAWA -- First it was Bitcoin, now it’s fine art. An online system for buying and selling creative works putting a value on digital assets.
They’re called ‘non-fungible tokens,’ or NFTs and they’re gaining popularity.
Raine Maida, the front man for Canadian band Our Lady Peace, is now at the forefront of the technology. He’s the Chief Product Office for S!ng, a high-tech company that has launched a tool to create NFTs.
“I kind of look at it like it gives artists super powers again,” Maida tells CTV News Ottawa. “For creators and musicians, which obviously I hold near and dear to my heart, it becomes this new economy, a new way to connect with fans directly, offer them things which they couldn’t participate in before, and that’s exciting.”
Christie’s recently sold a digital artwork called “Beeple” for more than US$69 million. Canadian musician Grimes recently sold a collection of her work for $6.3 million.
All of it, sold digitally. Those who purchased it won’t be receiving a canvas, print, or sculpture. They bought NFTs.
Think of it like, “Proof of authenticity and proof of ownership,” says Ottawa digital artist Lorgio Nim.
He recently sold a painting, and his first using an NFT.
“It’s direct from artist to consumer,” says Nim.
Nim is a digital painter. He creates his work exclusively using a computer.
“The only thing that’s different between a digital painting and an actual painting is the medium that you’re using.”
Brush strokes, mixing paint colours; it’s like an oil painting, minus the mess he says.
“It has everything that a traditional painting has: it has a message, it has intent, it has technique, it has skill. All these things are displayed, it’s just a different medium.”
Ownership of the artwork makes it collectable, just like traditional art.
“Whoever buys an NFT, later on down the line, could decide to sell it for a profit.”
Nim says he’s preparing other work to be sold as NFTs in the coming weeks.
How does it work?
“If bitcoin is hailed as the answer to digital currencies, then NFTs—or non-fungible tokens—are built as the digital answer to collectables,” says tech expert Marc Saltzman.
A similar technology to cryptocurrencies, the buyer holds a token or digital authenticity of the work. It’s kind of like a receipt, showing it’s genuine and belongs to the person who purchased it.
What does ‘non-fungible’ mean?
“A fungible token, when it comes to economics, is like currency. I can give you a hundred Canadian dollars and you give me two fifties, it all cancels itself out, it's of equal value, but a non-fungible token is something unique,” explains Saltzman.
Something unique, like artwork, a digital sports trading card, or an original piece of music that you own.