Is NFT your Cup of Tea ?

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To NFT or Not to NFT is that the question ?

Do I turn the art I own into a NFT ? or if I bought an NFT would it make me rich ? Perhaps there are just some of the questions doing the rounds.
To explore the answers let me walk you down memory lane.

Let me start by sharing a childhood experience. As a child I grew up in a household which has the tradition for the whole family to come together once a year for the winter vacation.
Almost like a ritual my grandparents would give us children some money to spend.
They would then accompany us to the nearby city fare which would have a lot of attractions for us kids.
From the candy vendor to the marry go round there was so much to vie for our attention and money!

There used to be this sketch artist who could do remarkably good job of creating realistic sketches.
I was quite enamored by his skill and decided to see if I could afford getting a sketch done by him.

Turning Money into something Non Fungible

It was a princely sum of money for me that I paid for the sketch to be made.
Thinking of the experience the $ 5 bill that I had and paid him was like any other money bill that you may have in your pocket.

One could exchange one $5 bill for another and it would not make any difference in terms of value of the bill.
Upon receiving $5 from me, the artist transferred a digital sketch to my phone.
The moment I handed over the $5 bill and took possession of the sketch I had something that was non fungible.
The piece of art that I had in my possession was unique.
It had memories associated with the event that the artist had painstakingly captured.It even had the details of the surrounding.
In a lot of ways the artist had captured that moment in time.
for the memory it created it was priceless for me.

Cut to now I wish to display that image on my social media profile however doing so means anyone can copy it and use it the way they want it.
This is certainly not something I would like or want.

I want to maintain and be able to prove my ownership over the digital piece of work that I own so I turn to the blockchain.

I visit https://opensea.io a platform that people use to trade NFT's
A part of the service they offer is to convert a digital document or painting into an NFT
At this point I could choose to pay a fee and turn my digital painting into an NFT on the ethereum blockchain.
However if one wants to mint or create an NFT for free the process requires choosing the polygon blockchain and minting the NFT for free.

Advantage 1 : NFT is a proof of ownership

So what I just did was convert a digital image into a NFT
In simple terms we have created a proof of ownership on the blockchain. This can be used as a receipt of ownership and used to prove that I own the sketch.
Since the account is having a metamask account linked to it so the ownership can be tracked back to me.
Here is the NFT that I created https://opensea.io/assets/matic/0x2953399124f0cbb46d2cbacd8a89cf0599974963/103910695660818121766857057132511695495355764431739307170320540672015531507713

Advantage 2 : Turning digital art to something sale-able

I can showcase the art I own without the fear of loss
An NFT is authentication of the digital object underlying it.

That already being said it is a great way to showcase it to the world. After creating an NFT it feels like being part of a digital new age Renascence.

Advantage #3 Why just art almost anything digital can be turned into an NFT

Be it audio, video, a piece of code, a domain or anything digital can be turned into an NFT and the underlying blockchain would validate and prove the ownership.

Advantage #4 Buy Sell or loan or Exchange

Platforms like opensea.io let you buy and sell your digital holdings aka NFT's without having to even step out of your home you can do this from anywhere anytime.

Advantage# 5: Enormous opportunity for artists

NFT as a medium of expression is a legitimate way of taking your art to the world. Thus one can showcase ones art by way of turning into an NFT or a series of NFT's

So turning art in NFT would make one rich and famous ?

You do not always get rich Disadvantage #1

Well there is a lot of hype around the topic of NFT's selling for millions and people who own or create them getting rich.

However though it is easy to create an NFT it is not always easy to sell it.
This is on account of the fact that it is not always easy to find the true value of an NFT
An artist can take years to develop his style and get recognized.
Similarly on the NFT market it is all about finding the right audience and finding the buyer for your digital art.

Price discovery is an issue (Disadvantage#2)

It is said that the idea of beauty is subjective so it is often heard that 'Beauty Is in the Eye of the Beholder'?
The same goes for a NFT
You never know what would click with the audience.

NFT market is not a very liquid market (Disadvantage 3)

You may create a NFT and list it however that does not mean that tomorrow there would be a long line of people of willing to buy it.
Some people try to flip NFT's by buying them cheap and trying to sell it for a profit.
Even they have to wait for some time for the right buyer to come up to pay the right price.
Thus having a NFT does not mean it would sell as hot cakes.

Your art is never private again (disadvantage 4)

Once you create an NFT and it gets created on a blockchain then anyone having your wallet address can simply lookup and search for your wallet address and see what all NFT's you own in your wallet.
This can expose your NFT wealth to the world and can be seen as another flip side of having an NFT.

Though this issue can be resolved by holding your NFTs in a separate wallet.

Concluding thoughts

Like the two sides of a coin there are advantages as well as disadvantages associated with NFT's
The NFT market is highly cyclical and illiquid. Yet it is a trend that has caught on human fancy and looks like it a trend that is here to stay.
Standard disclaimer: This is not financial advice. DYOR Do Your Own Research before making an investment.