Empowering Creators

Source details

NFTs (nonfungible tokens) are digital items that are not interchangeable and can represent artwork, videos, music, and in-game purchases.
NFTs record ownership through unique IDs and metadata on a blockchain, making ownership verifiable even when the digital work can be copied.
NFTs have opened potentially lucrative opportunities for artists, particularly in developing economies that previously struggled to access the multibillion-dollar traditional art market.

Creators "mint" an NFT by executing code stored in smart contracts that assign ownership through a unique ID and metadata.
Ownership information is recorded on the blockchain, a public distributed ledger, enabling easy verification of ownership of the associated metadata.
NFTs allow creators to sign self-executing agreements that ensure royalties on future resales.

Trading in NFTs hit $17.6 billion last year, according to Nonfungible.com.
Chainalysis estimates trading at more than $40 billion.
One Larva Labs CryptoPunk sold for $23.7 million.
As of May 14, the cheapest available CryptoPunk was ETH 60.95 (about $128,000 as of May 14).

NFTs can bypass traditional gallery business models that typically take 40 to 50 percent of sales, enabling artists to trade directly online with only a small transaction fee.
NFTs commonly program royalties on resales, often between 10 and 30 percent, providing ongoing income to creators.
For creators in developing economies, NFTs reduce barriers to market access and can provide financial security that traditional markets often do not.
Example: Rich Allela now runs a company working with 157 artists across Africa and aims to generate $2–$5 million from sales this year.

NFTs enable real-time royalties as works are resold and flipped, which artists like Osinachi view positively compared with the traditional art market where artists often lose visibility on ownership changes.
The ability to capture royalties even after an artist's death (through access to the artist’s wallet by relatives) is highlighted as a significant financial advantage.

Environmental concerns: crypto’s environmental track record is described as dismal.
Scams and cybersecurity risks are significant:
- "Rug pulls"—projects where creators cash out and abscond with investors’ funds—are a major problem; crypto investors lost over $2.8 billion to rug pulls last year, according to Chainalysis.
- Cybercrime risks include account takeovers and fake marketplaces.
Practical barriers for artists include complexity, difficulty building a following, and gas fees (the cost of a transaction on the blockchain), which can hinder participation—particularly among African artists.

New entrants are advised to do their own research and seek out a community to mitigate security risks and navigate the space.
Practitioners view flipping less negatively in the NFT context because artists can receive royalties from resales and have greater transparency over ownership changes.

Empowering Creators, F&D Magazine, ANALISA R. BALA, June 2022

Empowering Creators
- Empowering Creators (Markdown version)
- Empowering Creators (PDF)