Thursday, May 23, 2024

The Profitability of Investing in Art: Navigating the Digital Age

User avatar of Dominik Nawracaj

Dominik Nawracaj

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The Profitability of Investing in Art: Navigating the Digital Age

Art and NFTs investing

What makes investing in art profitable?
While I was looking for some information about buying art for investing purposes, one of the main tips was:
It mostly depends on whether the artist will be consistently creating throughout his life, especially if he keeps his individual style.
That means, I suppose, that the most worthy art for buying, will be the one, which comes from widely recognized, usually older artists, who create art for a long time.
Well, I guess I didn't discover anything new.
When we buy the physical piece of art, for example, painting or sculpture, at local market, we can easily identify it and verify its value.
However, the thing changes when it comes to buying a digital one. Supposing, we found a marvelous painting (or graphics), that attracted our attention, and in our imagination, we can see it printed out and hanging in the main place of the living room.
But, in this case, how can we be sure of its originality and the real value?
Here there come NFTs...
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Disclaimer!
Under no circumstances it is an investment advice.
Believe me, I’d be the worst financial advisor you’ve ever met.
Nor am I an art specialist, advisor, or kind like that; I'm just a guy who likes nice-looking things (in the deepest part of my soul, I'm a romantic one).
This post is published for entertainment purposes.
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The challenges

The digital art addressed existing concerns and doubts about the authenticity and worth of virtual art. The development of NFT tokens resulted in objects that existed exclusively in virtual space entering the auction circulation. All types of animations and digital painting have gained legitimacy and recognition. The primary reason for purchasing NFTs is to support the artist and collect digital objects, but investors also believe that digital works have the potential to increase in value in the future.
With the rise in popularity of NFTs, not only new virtual works emerged, but also virtual exhibitions and platforms that brought together digital art. They allow you to purchase an NFT, sell it, or construct your own. Some of them also have a feature that allows you to create an online store using your assets.
Most virtual marketplaces sell works in cryptocurrencies, therefore before an investor decides to invest in a work, he should first build a specific wallet to convert and store his digital assets. There are numerous portfolios available, and the choice is mostly determined by the investor's unique preferences.
The sale of NFT works is similar to typical online auctions, with the exception that we obtain a visual identification of a specific work as well as a unique code ensuring the object's originality. The evidence of purchase, which is recorded in one of the blockchain networks indefinitely, signifies that we now own it and can resell it or display it in our collection. Special frames have also been made to exhibit digital art in a manner akin to traditional ones.

NFTs displayed at auction houses

Christie's and Sotheby's are the most well-known overseas auction houses that deal with digital art. This is where the current NFT sales records are recorded. The collection of works is expanding, and access is becoming more convenient, which is why, in addition to platforms designed specifically for the sale of NFTs, traditional auction houses are expanding their offerings with virtual works.

Conclusion
I feel that the tokenization of works of art marks a new chapter in the digital art industry. NFT will not only allow for widespread trading in tokens related to digital works of art, but it will also provide new methods of expression for artists, and extend the scope of their range.

I hope you enjoyed while reading this post, thanks for stopping by.
Greetings!

Resources:
https://desa.pl/en/stories/nft-art-market-auction-house-and-platforms-activity/
https://www.ha.com/information/nft-auction-guide.s
https://www.sothebys.com/en/departments/digital-art
https://www.youtube.com/@nftnarynkusztuki3762
https://www.thenftmag.io/nft-auction-houses-timeline/
https://www.thenftmag.io/nft-auction-houses-timeline/

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