A new trend of people selling their creative work like pictures, videos, games, etc for huge amounts of money has been attributed to NFTs.
Some examples include the sale of digital arts by Grimes for $6 million, Nyan Cat for almost $600,000, Jack Dorsey’s tweet for about $3 million, and a picture of Lindsay Lohan’s face for $50,000, among many others.
Nigerians have also been able to sell their work as NFT, like this Nigerian corp member, Adisa Olashile who gave half of the proceeds from the sale of a picture he took to the character in the picture.
Although the amount made from this sale or the amount given to the man was not revealed, Mr Adisa who had taken pictures of an old man at his Community Development Service (CDS) centre shared this win on Twitter and Instagram.
Another Nigerian photographer, Adewunmi Babatunde, sold three images for N740,000.
So what exactly is NFT and how does it work?
What are NFTs?
An NFT (non-fungible token) is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger that can be sold and traded.
Types of NFT data units may be associated with digital files such as art, photos, videos, audio, and games.
They can be anything digital (such as drawings, music downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.
NFTs began with two software developers; John Watkinson and Matt Hall, who came up with a generative series of NFTs on the Ethereum blockchain branded as CryptoPunks.
How does it work?
NFT creates a blockchain-based digital certificate for your digital collectables. This certificate gives your work a unique identity.
The underlying technology and language used by NFT are the same as other cryptocurrencies such as blockchain, and the programming language is Ethash or script.
NFT exists on a theory of blockchain, the distributed public ledger that records all transactions. However, NFT is quite different from these cryptocurrencies.
Cryptocurrencies like bitcoin and Ethereum are fungible tokens, that is, if you trade bitcoin or Ethereum for one another, you get the same value or item in return. This is however not possible with NFTs.
At a very high level, most NFTs are part of the Ethereum blockchain which supports these NFTs, as it stores extra information that makes them work differently from, say, an Ethereum coin. It is worth noting that other blockchains can implement their own versions of NFTs.
Why then should you pay so much for something you have access to and can view whenever you want for free? Well, as this YouTube video explains, this is just “a story about human psychology and how the way we value things is gifting because of technology.”
Experts Opinion
Mr Ore Afolayan, (@TheOreAfolayan) a blockchain research analyst and consultant who is also the Chief Executive Officer (CEO) of Reni, spoke to us about NFTs and how they work.
He noted that NFTs, which are a type of token built using Blockchain technology similar to the innovation of cryptocurrency, is a concept that promotes globalisation as it connects creatives and communities from different parts of the world.
“NFTs can take several forms, music video et al. But the most popular ones are pictures (photos, artworks etc). Well, NFTs further help to promote the concept of globalisation. A Nigerian photographer or artist from the suburbs of town can sell his photos/creations to someone in Beijing. Many Nigerians have started venturing into NFTs.”
He noted the importance of research before tapping into NFTs because a creative piece only gets people’s attention or gets sold with the eighth value attached.
He also warns against dangers like rug pulled (a malicious manoeuvre where crypto/NFT developers abandon a project and run away with investors’ funds).
“Most of them aren’t doing it the right way. Before buying or renting an NFT, there is a need for you to understand that it’s more than your art.
It’s about the marketing of your art, the stories you tell about it, and the community behind it. It’s the aggregation of some of these things that make your NFT something worthy of being bought.
“There is a need for people to do research before NFT. Don’t just buy an NFT because you see people talking about it. Else, you stand a chance of being rug pulled.”
He added that the stories a creative tells, the marketing, how scarce it is (the feeling of being for a selected few-exclusiveness, the community talking about it), the use cases (if I have this nft, can I use it to attend your concerts etc) and many other factors culminate to an NFT’s value.
Victor Abiola, (@victor_abiolaa) an NFT collector noted the importance of communities in NFT.
“From the side of the creator it is a way of letting people buy into your community or the project you are doing but they will need a ticket. When you get the NFT of some brand, you can just walk into their restaurant and eat without paying cash. Of Course, you must have used money to purchase their NFT.
“NFT is a ticket to their community and whatever they are doing. It can expand to more than just food and because you have their NFT you can benefit from that community.”
Explaining how money is made from this, he advised Nigerian creatives to make sure their project is very solid, they build a lasting project with a good use case, use good developers and use good Public Relations (PR), especially Crypto and NFT Twitter Influencers.
“This is how people make money through NFT. For example, the board and hungry people when they launched their NFTs, they first launched the first collection. The first collection will contain a series of NFTs 2,000 That is 2,000 tickets. When it is sold out, that is, people purchase it from them, and the value of what they are doing is great and people that are still interested in getting it have to buy it from the secondary buyers (the first buyers) at a higher rate.
“If you bought it at $100 you can sell it for maybe $150, That is how you make a profit as a collector or buyer. If there is high demand for an NFT or a particular brand, you can choose to resell at a higher price.”
Folarin Akin-Allen, (@marfolvintage), an NFT artist
explained NFTs are put in hash cryptocurrency which allows the creative give a price tag and transfer ownership.
“You put them in a hash (cryptocurrency transaction mostly on Ethereum chain or polygon chain or tesoz or sol). These different chains are the networks with which the NFT would run. Attaching it that way allows you give it a price and you can transfer ownership to anyone as long as you have their receival address for that same network so they can receive either a (1/1) i.e only one copy of the image, art, gif, video, skin, collectibles NFT IN GENERAL or editions of more than 1.”
Some Nigerian creatives are already tapping into NFTs. They include Daniel Benson, popularly known as Buju, Folarin Falana also known as Falz, Mayowa Alabi, a digital artist known as shutabug, etc.
