Wikipedia defines “Information Goods” as “commodities that provide value to consumers as a result of the information it contains and refers to any good or service that can be digitized.” Common examples range from: music, art, books, journals, videos, etc.
As blockchain technology and the Internet continue to grow, the economics of these information goods can be improved by the introduction of NFTs (Non-Fungible Tokens). According to CoinDesk, “Non-fungible tokens (NFT) are digital assets that represent a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate.” In terms of art, Non-fungible tokens enable the issuer to encode identifying information in their smart contracts such as- who created the art, previously owned, and who is currently the owner.
Traditionally, artists would create their physical artwork and then sell the artwork for money and that’s the end of it. The value of their artwork could go up, but the original artist would reap no monetary benefit. What NFTs mean to artists is that block-chain technology enables creators of information goods to exchange their art with 100% verifiability to the original issuer. For artists, this is game-changing and revolutionary. Never before have artists been able to monetize their creations online to this caliber and protect their copyright online.
Imagine if NFTs were around in the late 1800s, a great example of an artist whose art could have benefitted from NFTs would be Vincent Van Gogh. Van Gogh only has sold 1 piece of art in his lifetime- The Red Vineyard at Arles. This piece sold for 400 Francs ($2000 today) and is currently valued in the millions. However, Van Gogh has many other art pieces that have been counterfeited by others and new art pieces of his that were recently discovered and accepted as his. If NFTs were in existence at this time, this would not be the case. Van Gogh could have had the option to issue an NFT for his other art pieces to protect ownership of all his art pieces and track their art pieces back to him. Also, Van Gogh could have a lot of options for selling his artwork with NFTs and make money.
- Van Gogh could have let the market decide its value and auction/sell his NFT for the physical art for Ethereum or Bitcoin.
- Van Gogh could have sold his masterpiece as fractional shares to anyone interested to own part of his masterpiece as fractional NFTs.
- Van Gogh could have crafted the NFT to automatically send himself a % of secondary reselling of his artwork as the creator and issuer of the NFT.
Non-fungible tokens have the ability to protect artists’ creative works and give artists passive income in a laborious/ competitive market. I think artists creating digital artwork, create many more opportunities to sell their artwork and protect their owners from people screenshotting their image and using their artwork without consent. It also creates more channels to sell and make money from their art in a secure way. I feel that some artists are still reluctant to shift onto the blockchain bandwagon; but I feel that as the blockchain grows and virtual/ augmented reality becomes more common, NFTs will become common practice and essential for artists.
Imagine the unlimited use cases that NFTs pose for other information goods such as sneaker collecting and the music industry. I am excited to see how this new type of technology impacts other industries.
.ART. 2021. What’s this Non-Fungible Token (NFTs) Craze All About, Anyway?. [online] Available at: <https://art.art/blog/whats-this-non-fungible-token-nfts-craze-all-about-anyway> [Accessed 27 February 2021].
CoinDesk. 2021. What Are NFTs and How Do They Work? – CoinDesk. [online] Available at: <https://www.coindesk.com/what-are-nfts> [Accessed 27 February 2021].
En.wikipedia.org. 2021. Information good. [online] Available at: <https://en.wikipedia.org/wiki/Information_good> [Accessed 27 February 2021].
Linda.mirror.xyz. 2021. A beginner’s guide to NFTs. [online] Available at: <https://linda.mirror.xyz/df649d61efb92c910464a4e74ae213c4cab150b9cbcc4b7fb6090fc77881a95d> [Accessed 27 February 2021].
Medium. 2021. The Rise of NFTs and What It Means for Marketers. [online] Available at: <https://medium.com/ipg-media-lab/the-rise-of-nfts-and-what-it-means-for-marketers-628efc68c90> [Accessed 27 February 2021].
Vangoghgallery.com. 2021. Frequently Asked Questions | Van Gogh Gallery. [online] Available at: <https://www.vangoghgallery.com/misc/faq.html#:~:text=during%20his%20lifetime%3F-,ANSWER.,famous%20until%20after%20his%20death.> [Accessed 27 February 2021].