Should Creators Consider Selling Their Art Online As NFTs?
“Anyone can create NFTs. Even a stickman doodle can be an NFT,” said Raghav Reggie Jerath, Founder and CEO of blockchain platform Gather Network.
Non-fungible tokens, or NFTs, have been taking the world by storm, offering creators a unique and arguably better way to monetise their work. However, just like cryptocurrencies overall, there is still a general lack of understanding among the masses on what an NFT actually is, and how exactly can a creator turn their art into NFTs and earn money off them. To get a better understanding of NFTs and the monetisation opportunity they offer, ABP Live spoke to Raghav Reggie Jerath, the CEO and Founder of Gather Network, a Dubai-based layer-1 blockchain platform that has its own token, GTH. Gather looks to provide publishers with a fair content monetisation model for their work.
What is an NFT? What is a blockchain?
Putting it simply, NFT is a one-of-a-kind entity that exists on a blockchain. If you own an NFT, you can rest assured no one else in the world can own an NFT with the exact same attributes as the one you have. As per Jerath, a blockchain is a “glorified, distributed database which is managed and updated by millions of people all around the world.”
“Within a blockchain, there are different types of tokens. NFT is one such standard of token,” Jerath said. As a creator, you can turn your art or music or nearly anything else into an NFT on a blockchain, and then sell it off via an online marketplace.
How many types of NFTs are there?
While each NFT is unique, NFTs can exist in two forms — a singular piece of art or a collection. Jerath explained, “Suppose you have a drawing of an apple. That can be an NFT that you can sell.” He added, “Now, suppose you create another drawing of an apple that looks similar but has an additional leaf at the top, then that would become another NFT.” Creators can develop a vast collection of such NFTs, which may look similar to each other, but each NFT will be marked by certain features or attributes (like the leaf on top of an apple) that no other NFT will have, even if they are from the same collection of apple NFTs.
Take CryptoPunks NFTs for example. Jerath said, “CryptoPunks is one of the first collections of NFTs that are algorithmically generated. While they may appear similar, each CryptoPunk has different attributes, different traits, all of which are random.”
Why should creators consider selling their art as NFTs?
“The unique aspect of NFTs is that they can represent real art. There are artists who are making their livelihoods purely off NFTs now” said Jerath. “A physical art piece can be sold at Sotheby’s or Christie’s. Whereas in the case of NFTs, you can sell on online marketplaces such as OpenSea, LooksRare, and so on.”
Not only would online marketplaces make the whole selling process a lot easier to manage, but it would also remove the middlemen (like Christie’s or Sotheby’s) from the selling process, offering creators a chance to make more money than traditional methods.
Keep in mind that online NFT marketplaces will charge a nominal fee for their services. OpenSea has a transaction fee of 2.5 percent (on earnings) and LooksRare is slightly cheaper, at 2 percent.
Can anybody create and sell an NFT?
“Anyone can create NFTs. Even a stickman doodle can be an NFT. You can create a single stickman NFT, or create a collection 1,000 stickman NFTs, each with a unique feature, like a carrot nose for example,” said Jerath.
But things aren’t as simple as listing an NFT on a marketplace and becoming a millionaire overnight. Jerath explained, “You need to have a community of followers, you need to have an idea of what the NFT is going to do.”
“Sure, you can make a little bit of money by dropping a single NFT. But, it’s better to have a whole idea an execution plan around it, as is the case with any honest business idea.”
How much taxes must a creator pay to sell NFTs in India?
“India has come up with… honestly… not-the-best tax laws,” Jerath said. In India, cryptocurrencies and NFTs are considered to be Virtual Digital Assets (VDAs), which attract a tax of 30 percent on all gains under the current tax regime that went live on April 1.
“For daytraders, that’s horrible,” said Jerath. “People who make, like, 0.5 percent on each trade and does 10 trades a day, you kill their business. You kill their income.”
Cryptos and NFTs also face a 1 percent TDS in India, in addition to the 30 percent taxation on gains.
When will the NFT bubble burst?
NFTs are not without their own set of problems. Given the decentralised and unregulated structure of cryptos overall, any anonymous creator can drop an NFT on a blockchain and it just might go viral overnight. This may bring an anonymous NFT’s true ownership into contention in some cases.
However, Jerath believes NFTs are here to stay for “the next decade.” “As is the case with any new trend that catches on, there’s a lot of speculation around NFTs. While there’s a lot of froth in the NFT space, there are also some solid attributes that are here to stay.”
Advise for budding NFT creators
“Build a community,” Jerath said, “If you need people who love your art, just keep dropping NFTs to get everyone interested and talking about your creations.”
“Since NFTs are unique, NFT owners often like to brag among themselves, ‘Hey, look what I have that you don’t.’ So, make sure your NFTs are unique,” Jerath added.
Gather Network has recently opened its first commercial establishment in India. “With our new operations opening in Gurugram, we look forward to connecting with Indian tech talent who can help empower Gather’s mission to spread and connect with various creative businesses in other parts of India as well,” Jerath said. “Gather hopes to help contribute a better economic solution catered to the emerging digital ecosystem.”
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.
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