All images by Rhiannon Adam
You may have heard the term NFT coming up a lot recently, especially within the art world. While they seem to have come out of nowhere, NFT’s have actually been around for years, but there is still a lack of understanding and lots of misinformation being shared about them. With the knowledge and advice of photographer Rhiannon Adam, Redeye’s Rosie Dale has put together this article to help you make sense of what an NFT is, any risks or misconceptions around them, and how we as photographers can utilise them.
So what is an NFT?
An NFT (or Non-Fungible Token) is token used to represent ownership of unique digital items; non-fungible = not interchangeable. NFTs are stored on a decentralised digital ledger, called a blockchain, which is the same technology that is used to buy and sell cryptocurrencies. We are able to tokenise any digital item as an NFT, for example: images, music, videos, virtual objects in video games, even tweets. Each NFT can only have one owner at a time and is secured by a blockchain, meaning no one can modify the record of ownership. This makes them incredibly secure transactions.
One NFT that sparked widespread interest in the market was Beeple’s sale in March of 2021. Digital artist Mike Winkelmann (who goes by the name Beeple) had made a piece of artwork every single day for 13 and a half years, putting all the pictures together in a collage called ‘Everydays: The First 5000 Days’. This NFT sold for $69 million, making it the most expensive NFT ever sold and the fourth most expensive artwork by a living artist. After this sale there seemed to be a huge surge of interest in NFTs; many artists excited by this possibility of making big money.
NFTs are sold on online marketplaces. Sellers will choose a marketplace depending on the type of NFT they can support and which blockchain they want to use. There are many marketplaces and blockchains to choose from. Etherium was the first blockchain to transfer NFTs and is still the most widely used; for example popular marketplaces like OpenSea, Rarible, and Foundation use Etherium. However there are now more blockchains being developed, like Tezos and Wax, which are growing in popularity due to their energy efficiency. Most platforms require buyers to have a digital wallet and use cryptocurrencies to make purchases, however certain platforms are now allow buyers to pay for purchases using their credit card and will automatically convert the money into cryptocurrency for the transaction.
Many photographers have started to sell their images as NFTs and to give me a better idea of what this process is like I spoke to Rhiannon Adam, who has been interested in cryptocurrency for a long time. Rhiannon is an award-winning art and documentary photographer based in London who has been published and exhibited worldwide. She first got into photography through the analogue process of Polaroid and has continued to take Polaroid photographs ever since.
When it comes to NFTs, Rhiannon is more involved in the process of spreading knowledge and furthering understanding around crypto. She has taken part in an NFT residency and is also a part of Kernel; an online community dedicated to open learning surrounding the blockchain and web3 projects. However, Rhiannon does sell some NFTs of her own work. She says, ‘I'm interested in using them to be able to sell things that I cannot sell in real life. For instance, I don't sell my original Polaroids, but I can sell a one of one as an NFT. There is only one, and that is just as unique as my original Polaroid.’ She has also made an NFT of the process of one of her Polaroids developing. This is usually something that can only been seen briefly by the photographer once as the picture is taken. But Rhiannon says, ‘Now someone can own the actual process of wonderment. The developing process and being able to see an image emerge from the blue was the thing that I fell in love with about Polaroid. So I’m interested in using NFTs in this way.’
Risks and Misconceptions
When speaking with Rhiannon, it became clear that the one biggest issues surrounding NFTs come from the spread of misinformation. There has been a lot of talk about the environmental impact of NFTs, whether there is a future for them, and the possibility of hacking the blockchain, so I will go into these subjects below to help provide some clarity.
The environmental impact of NFTs can depend on the type of blockchain that they use. A blockchain is the underlying technology that backs up the validity of an NFT. With every transaction (Be it on an NFT, cryptocurrency or any other asset) another block will be added onto the blockchain. The more transactions that happen the longer the chain becomes as it stores all previous transactions and their information. This means that anything of value can be easily tracked back between ownerships, thus making the blockchain more secure. However to add a new block to the blockchain there are groups of people, called miners, working to come up with a solution to a complex mathematical equation, which verifies the transaction. The miners compete against each other to be the first to find the solution and verify the block as this earns them money. However to find the solution miners have to use highly specialised computers which come up with thousands of potential solutions every minute. On average it takes around 10 minutes for a solution to be found which then allows the transaction to go through. Powering these computers takes an incredible amount of energy, which is where the environmental issue comes from. For example, the energy used each year by Bitcoin alone is comparable to Sweden’s annual power consumption. This model of confirming transactions is called Proof of Work. This has been the most widely used model so far as it was the first model built for Bitcoin and so it has been easy for other blockchains to copy this Proof of Work model.
However there is another model called Proof of Stake, which is growing in popularity. Unlike Proof of Work, which uses miners to confirm transactions, this model relies on people staking some of their own coin into creating the new block on the blockchain. The people who stake their money, called forgers, have a chance of winning the transaction fees as a reward depending on the amount that they have staked. For example, if there were 1000 coins of a currency in circulation and someone was to purchase and stake 100 of those coins then they would have a 10% chance of winning every reward, which is chosen at random. This method uses much less power than Proof of Work as there is no need for miners solving complicated equations and using the powerful computers. More and more blockchains are being built using Proof of Stake; even one of the largest blockchains, Etherium is currently transferring over to a Proof of Stake model. While there is no date for when this will be completed they have said that they are aiming for the end of 2021 and that this transition to Proof of Stake will reduce Etherium’s carbon emissions by 99.5%.
So why are most NFTs still sold using Proof of Work blockchains?
Rhiannon explains ‘There are many alternative blockchains that people could use, for example Polygon is Proof of Stake, Tezos is Proof of Stake. However at the moment Etherium is the main network that most platforms use and Etherium right now is still Proof of Work. The issue has always been that Etherium had the most amount of money in the system, it had the more core group of developers, it has a really enthusiastic fan base because it has so much utility. So most DApps (Decentralised Apps) were built off of Etherium and so that has meant that most of the platforms that emerged were also built on Etherium. Etherium is huge and changing it over to Proof of Stake is a big, big task.’
Whereas there are many smaller blockchains that are already using Proof of Stake as Rhiannon says; ‘It is a lot easier to start off with a vision rather than trying to fix a problem with something that is so massive like Etherium.’ But as these are younger platforms they still don’t have the popularity and amount of users that Etherium does, so although you can sell NFTs using Proof of Stake blockchains, most are still sold using Etherium. There is also the issue of lack of awareness of what blockchain a platform is using. ‘The problem is at the moment on a platform like OpenSea for instance, all different NFTs are mixed in together. There is no tab or filter to see which are Proof of Work and which are Proof of Stake.' This means that someone getting into NFTs without prior knowledge of different models of blockchains wouldn’t know which NFTs are which.
There is also the case that in this modern world, almost everything we rely on takes energy to power. So regardless of which blockchain model is used, there’s no reason why it couldn’t be done by using green, renewable energy. Adam says ‘Everyone has a carbon footprint no matter how you look at it, it’s just about how you offset it. So should the question be: Do we want to stop people from minting NFTs and selling their work? Or should the question really be: Why, in 2021, when we have the technology to not be such heavy carbon burners, why are we still doing it?’ Rhiannon says that to reduce the impact of crypto, rather than just ignoring the issues, it is best to work towards improvements in what is already such a big industry. ‘If there was a consensus of opinion of fully embracing blockchain and wanting to make it carbon neutral, it would be a much easier task.’
Other Risks of using NFTs?
Other than the environmental impact of NFTs, there has also been a lot of talk about whether there is a future for cryptocurrency and NFTs or whether they might die out. ‘Honestly I think the main misconception about cryptocurrencies is that it is all a load of outlier people.’ Adam says, ‘The reality is it’s hundreds of thousands of jobs around the world, it’s not just some nerds sat in their bedroom; there is billions upon billions invested in cryptocurrency. So I don’t think there is any chance of it going anywhere.’ Rhiannon also told me that NFTs have been around for many years, long before this recent surge in interest from a few big sales. ‘CryptoKitties has been going on for years. It was the big boom where Etherium really came into its own, through what was effectively an NFT back in 2017’. So NFTs are not a new fad, they’ve been around for years and look like they are here to stay.
There have also been worries that NFTs and money could be stolen and the blockchain could be hacked. There have been a few instances (See theverge.com) of accounts on NFT marketplaces being hacked into and having either money or NFTs stolen, or using the credit card linked to the account to purchase expensive NFTs and transfer them to the hackers account. However this is due to a lack of account security rather than a breach in the platform itself. Nifty Gateway, one marketplace where accounts had been hacked into, had said that every hacked account did not have two factor authentication enabled and they urged users to use a completly different password for each account they have. So while it can be possible to hack into accounts on NFT marketplaces if their security isn’t high enough (as is possible with any account on any site), it is almost impossible to hack into a blockchain. As the blockchain model is opensource software, everyone can see all the information in the blockchain and has their own copy of the chain. Therefore if any information in the blockchain was to change then it would be very apparent that something has be altered and everyone would be able to find out who the hacker was and restore the information.
So how do NFTs work within the creative industries?
Firstly, NFTs are a good way of opening yourself up to new marketplaces to sell your work. ‘I think NFTs are just a really natural progression from the way that we already create and sell things.’ Adam says. ‘In terms of photography it makes sense because we already work within the confines of an art form that is by its very nature reproducible. There was always the question of what is the authentic photograph? So the thing that is different about NFTs is that if I was to mint an edition of 10 as an NFT, I am releasing them all at the same time and all 10 are identical so there is no questions about which is the authentic one.’
But it is not just photographs being sold as NFTs, digital artworks are the most prominent work on the NFT marketplaces at the moment and Rhiannon highlights the importance of this new space for digital art, ‘NFTs have given rise to a whole new place and a whole new market for digital artwork and video, which never really had a home before. Galleries never used to buy video pieces, real people never used to collect video pieces. An NFT is brilliant because it enables people to be able to showcase something they own and prove that they are a good curator. Now all these struggling artists that were passionate about video, motion graphics, VR, etc have got a space where they can sell that work.’
There are countless other possibilities of ways that NFTs can be used in the art world, other than just through selling work. For example, they can be used to verify authentic works of art. Rhiannon explains, ‘If I had a Rembrandt painting and I wanted to prove that it had provenance, I could get all the expert opinions and every single detail of the painting and upload it all as an NFT. When I sell that painting at auction I can include the NFT, which includes the legal stuff that backs up the provenance. Only when the NFT is transferred to the new owner is the transaction valid. If they then resell the painting in the future, unless that NFT accompanies it, there is every chance that it could be a fake.’
Rhiannon also explained how NFTs could be used to save on paperwork for photoshoots. ‘As a photographer I spend probably at least an hour and a half a week talking to people about usages, payments, campaigns. Imagine all the paperwork that you could save by not having to do that. You could have an advertising campaign that ships with an NFT of all the details of everyone involved and their wallet addresses. So if you wanted to renew it’s all done automatically, you press a button and everyone gets paid.’
There is also the possibility of using NFTs as tickets to exhibitions, concerts or events. This would work by purchasing the NFT ticket beforehand from a legitimate seller, then showing the ticket at the door where it may be a unique QR code or a booking number to let you in. It would stop the possibility of fake tickets as each NFT ticket would be completely unique and you would be able to see on the blockchain if the ticket was coming from an authorised seller. As well as the tickets themselves being NFTs, there are also future plans to have virtual exhibitions showcasing NFT collections. Adam spoke to me about this virtual exhibition possibility, ‘There is no reason why I couldn’t have an NFT that when you buy it, it has some unlockable content like a virtual reality piece of my work in situ. Then you could curate all these VR pieces into a virtual gallery space. There are people who make replica VR spaces of, for instance, the Museum of Modern Art. So then MOMA can have their own NFT collection which would open up their exhibition to viewers from around the world. It makes art much more accessible and allows those with mobility issues to be able to experience it from the comfort of not having to leave their house.’
Finally, NFTs can give the control of selling their work back to the artists themselves. Through selling an NFT of their work, a photographer will still retain full copyright and licensing of their image. This means that while they have sold the ownership of that one file, the photographer can still use their image on their website, licence it to other organisations, enter it for competitions, publish it, and even sell other copies of the same image. If the buyer was then to sell the NFT, the photographer could ensure that they get a percentage of the sale each time their work is sold on. This would be done by writing the terms into the smart contact of the NFT when minting the image for sale, which would be immutable for that sale and every subsequent sale afterwards. This has been seen as revolutionary for the art world, where previously only art resold by art market professionals over €1000 qualify for the Artist's Resale Right. But now any artist selling an NFT of their work at any price can obtain a percentage of money from subsequent sales; NFTs give full control back to the artists themselves.
Who are buying NFTs and why?
When looking at some of the biggest and most active collectors it seems that for many, their motivation behind buying NFTs comes from a plan to later sell them on and make more money. There has been a huge surge in the popularity of NFTs this year and so artists and collectors alike want to make the most of the opportunity to make a big sale. An article in The Economist stated that the buyer of Beeple’s Everydays, Vignesh Sundaresan, boasted that it is ‘going to be a billion dollar piece someday’ but made little remark to its artistic qualities. Many of the big buyers are crypto investors and people who have been involved with and interested in crypto for a long time so they already have a lot of knowledge around the subject; NFTs are nothing new to them.
However, not all buyers are interested in NFTs for their monetary value. Some are interested in collecting for the artistic value. In an article by Bloomberg.com, one NFT collector called Colborn Bell, who is also an artist himself, says that his collection belongs in a museum. Bell has spent around $200,000 on almost 2000 NFTs and has plans to build a VR museum of crypto art, with a website to go along with it, in which he can exhibit his collection.
But ultimately whether NFT buyers are just in it for the money or because they love the art, it is still money into the pockets of the artists.
So to sum up, NFTs and cryptocurrencies already have so many uses and have massive potential to be used in many more different ways, which Rhiannon says are only aiming for improvement ‘I feel like crypto in general has a really noble heart that is working towards making a fairer society and a better society that isn’t governed by greed.’ So while I haven’t been able to cover all aspects of NFTs and crypto, I hope this has been able to give you a bit more understanding of the uses and the potential future that NFTs may have. For any new changes in the NFT art world, keep an eye out for future updates on the blog.
Thank you to Rhiannon Adam for her massive help in getting the information for this blog post. Some of her polaroid NFTs are still up for sale and you can have a look at them here: on OpenSea and Foundation