Forgers have existed in the art world since time immemorial, but for digital art objects the problem is amplified. 

It goes without saying that Digital art market insiders are learning about NFT technology (non-fungible token), a system based on blockchain which promises to completely revolutionize the sector by providing a guarantee of authenticity. 

What does NFT technology mean?

Il non-fungible token (NFT technology) è It is a digital file with a unique value, as is true for cryptocurrency. However, unlike other cryptocurrencies:

• it does not have a standard value;
• it does not have a “liquid” value, i.e. one based on the market;

In essence, thanks to NFT technology it is possible to mark a file uniquely and certify its sale and value in a non-falsifiable way.

What does “fungible” mean?

The English “fungivable” is the exact translation into Italian of “fungible”, or rather “replaceable”.

It is clear that for crypto art or NFT art it is essential to declare its irreplaceability. There cannot be 1000 identical copies of Picasso's Guernica, otherwise it would no longer make sense to talk about an original. 

Instead, a one euro coin can have a certain number of perfectly identical copies, because its function is different: the original no longer counts, but each copy has a fixed value.

If currencies of equal value were not interchangeable with each other, they would not constitute a trade good. 

NFT Art: How It Works

Digital art often faces some threats, precisely because:

• It is accessible to everyone 
• it is infinitely replicable. 

For example, how do you determine which of the infinite copies of a digital photograph is the original?

How to protect the author but also the buyer, giving authenticity?

Photographers' watermarking is no longer enough, in a world where digital objects encompass increasingly disparate fields. C'is an alternative: blockchain, aka NFT art.

The Importance of Certification in Digital Art

In the art world, highly structured certification practices have been in place for centuries. NFT art fits into this context, seeking to add certification authority to a digital work of art.

Understanding NFT technology well allows us to understand this revolutionary innovation: with NFT artworks, the certifying body is none other than the network itself. 

This is the main feature of blockchain technology, which is based on the visibility of all operations by the entire network of users. Every time an exchange of the NFT artwork is made, it is recorded so that all users see it and no central authority can intervene for any changes.

Is Selling NFTs Safe?

Selling NFTs becomes an operation protected by a third party, as has been the case for centuries in the "classic" art market.

So yes, it is safe, as long as you know how to consult the information about buyers and sellers. By consulting this data related to NFT technology we can understand not only if a work we see is authentic, but also who owns the rights to it.

Does buying NFTs make you the owner of the artwork?

Whoever buys NFT art from the owner or creator of the work becomes the owner of the work and the rights to the work. Of course, we are still talking about digital art, so the object continues to be visible to everyone.

Other applications of NFT technology 

The reason why NFT technology is so much talked about at this time in history is its huge success in promoting and marketing digital artworks, as we have seen. 

We also have another interesting application of NFT technology in the field of collecting.

Take Jack Dorsey, the founder of Twitter, who sold the first tweet ever as an NFT, for an incredible $2.500.000. Or Elon Musk, who says he wants to sell his song about NFTs as an NFT.

What keeps this market afloat?

On the one hand, the guarantee of authenticity of the single object. Furthermore, the limitation of the quantity of the good, which gives it value. 

As long as these two preconditions can be guaranteed, it can be a wise choice to invest in NFTs. These tokens can be used for a single work, or for a limited number of collectible digital objects.

UAnother point in favor of the NFT market is thereliability, due to the solidity of blockchain technology and the fact that it should not be tampered with in any way. 

Investing in NFTs: Main Problems 

As with all new technologies, there are several drawbacks lurking. The massification of a practice - as always - makes it more problematic, so investing in NFTs is not 100% safe, because NFT technology still has some flaws. 

Here are the main problems that limit the reliability of NFT technology:

1) Failure of platforms to buy NFTs

Take a contemporary digital painting that is sold as NFT art: very often the actual digital object is not on the blockchain, but is located along with other metadata at the NFT service providers.

What would happen if these providers’ platforms were shut down, perhaps because the startup that created them went bankrupt?

One risk is that all NFT metadata stored outside the blockchain will be erased.

The hope is that in the future there will be organizations capable of recovering and managing these semi-living NFTs, but to date there is no similar service.

The case is different with metadata that is completely stored on the blockchain, which can survive the bankruptcy of the company.

2) Unreliable supplier

Another problem is that many providers for creating NFTs do not have blocks as strong as they claim. In trying to sell a service, providers pass it off as the best on the market, but we must always remember that blockchain is an expensive technology and in many ways still dispersive.

What happens if there are code errors in the blocks?

Or, if a hacker gets into the system, as happened with DAO and the Ethereum ProtocolAre we sure that the supplier has an adequate Disaster Recovery plan and protection of user data in case of a leak?

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If you have decided to invest in NFTs, always rely on platforms for buying and selling NFTs that are widely reviewed, even by official sources.

The same goes if you are an artist who has decided to create an NFT. Choosing the right provider is crucial, especially in this phase in which the market has yet to stabilize.

In conclusion

The future developments of NFT technology will certainly be interesting and will provide significant opportunities for investors, especially for the digital art market.

As long as you know the technology, the suppliers and their reliability, and all the related risks.

Still have some doubts about NFT art? Would you like to understand more about how blockchain technology works?

Contact Pizero Design for a digital consultancy!