The blockchain sphere is dynamic, with interesting inventions that continue to take the world by storm. Non-Fungible Tokens are 2021’s trendy digital assets in blockchain technology. Artists and athletes are reaping big from these trendy assets, with sales of up to 1 million dollars or even more for their NFTs. But what is the craze behind the surging sales and staggering prices of these tokens that do not physically exist? Or, will they benefit Africans, especially African artists and athletes? The benefits of NFTs are not only limited to artists and athletes since other parties including corporate companies, pioneering investors and other individuals are exploring the NFT space to reap the benefits of the crypto asset that was previously reserved for insiders.
What are NFTs? An Overview
NFTs are digital assets that use blockchain technology to record the ownership of the assets which include images, collectibles, music, and videos. These digital assets are unique in the sense that they cannot be changed or cannot be split¹. This means they are distinguishable from each other and maintain their uniqueness regardless of the dynamics of the market. Other forms of crypto assets such as Bitcoin can be converted into other currencies, therefore their form can be altered. Also, the value of one bitcoin will remain to be the value of one bitcoin. On the other hand, one NFT is different from the other NFT. Their form is unchangeable and will not change throughout time. The only thing that changes is ownership. Even in the course of ownership, the blockchain technology records the ownership history, and it is easy to track the original owner or creator of the NFT².
The digital asset is therefore a piece of data owned by an address. The owner of the password of the address with the piece of data owns the NFT. This piece of data can be bought and sold by different parties. The original creator can put the NFT on one of the different NFT marketplaces (eg OpenSea and Decetraland), and interested parties could seek to buy the digital asset. This transaction process is verified in the blockchain, and a history is recorded³.
Are NFTs Valuable?
NFTs are relatively new and have just gone mainstream, meaning they are still fresh in the market. This already makes them valuable. This is coupled with the fact that there are first NFTs created by specific creators which will have value⁴. Their entry into the market could be compared to the first cryptocurrency, Bitcoin, whose popularity and value are high because it was the first cryptocurrency.
The other reason why NFTs possess value is that they are unique and rare⁵. Their uniqueness could be compared to the uniqueness of art items such as paintings and other artifacts. Historic artifacts and paintings could be replicated but there is always that one original item that could be owned by a museum or a person, which is probably extremely expensive, and very rare. The same applies to NFTs, where their value is tied to their uniqueness.
NFTs are valuable because of their ownership history⁵. The contemporary world has people who seek bragging rights. This means they would pursue ventures that will accord them bragging rights. Simple things such as owning an item that has previously been owned by someone important are grounds to have bragging rights. If today I owned a watch previously owned by former US President Barrack Obama, I would have the bragging rights, and if anyone wanted to buy the watch, I would sell it 10 times higher its original price. This also applies to the ownership history of NFTs. If someone important owned the tokens, the price would go up with each change of ownership.
The real-world benefits or utility of the NFTs is another factor that makes them valuable⁵. This is probably the most important factor that makes NFTs valuable. In the future, important creators will sell NFTs, which will grant owners exclusive access to membership communities. This could also apply to artists. Imagine if Michael Jackson was still alive and he minted and sold 100 NFTs. The owners of these NFTs would then be granted exclusive access to all his concerts. The prices of these NFTs would be marked up by each change of ownership, and their real-world value would be paramount.
How African Artists Are Reaping from the Wave
NFTs can be pieces of artwork, music, videos, and GIFs. These are digital artworks, designed and produced by artists. These pieces of artwork are based on artists’ creations. They are an artists’ original idea. These digital pieces of artwork have value tied to them. Value means people are interested in the particular digital artwork and are willing to pay to possess the piece of art.
Value is given by people, and this depends on how people perceive the artwork. The Mona Lisa by Leonardo da Vinci is given value because it is the most recognizable painting on earth. Its popularity makes it one of the most expensive paintings. This is reflected in NFTs where popular digital tokens are more expensive.
Jacon Igwe, popularly known as Osinachi, is one such African artist who has harnessed the benefits of NFTs. Osinachi learned early that NFTs possess unique qualities and no two units are equal. He also learned that digital paintings, his fort, could be NFTs. In March 2021, Osinachi sold art worth $75,000 of NFTs in 10 days⁶. Osinachi compared digital art to traditional art, attributing their equality to the rise in value as an asset changes ownership.
The story of Osinachi is one in which many other African artists are emulating and making the most of their music and other pieces of art. Osinachi gives a pattern of how African artists are making money from NFTs.
Based on Osinachi’s experience with NFTs, there are two critical ways African artists benefit from NFTs. One is through the creation of content and pushing the content out to the world, to make money. Osinachi created his artistic digital paintings and put them out for sale. His works attracted interested buyers and the man who was once an academic librarian made $75,000 in a record 10 days. This is a huge amount of money in third-world African countries.
The second way African artists can harness the benefits of NFTs is through taking advantage of the uniqueness of stuff in Africa. Africa has unique physical assets. NFTs can be created to represent these physical features⁷. The NFTs can then be pushed to the public to create value and make money. Musicians such as Don Jazzy are making money from the NFTs but the benefits of the NFTs are not only limited to musicians⁸. Other artists and content creators can make the most of the NFTs from the ingenuity of their ideas.
Problems NFTs solve in Africa
African artists have been pit to problems with their work when it comes to ownership. Musicians have fought over beats and lyrics. Content creators have been in battles over ideas. Different parties often claim the rightful ownership of music, ideas, beats, and lyrics, but when it comes to proof of ownership, neither party can convince one of the ownership. NFTs can now solve this menace digitally. When a person or company creates a digital asset, they can claim ownership, as they have the password to the address of the token. Artists, therefore, can resort to NFTs to deal with the challenge of ownership, and further protect their digital assets including images, music, and videos⁹.
NFTs are not just a craze that will soon die down. NFTs continue to prove their worth and importance. African artists have realized the importance of NFTs and they are up in arms to make the most of these digital assets. The artists can get direct payments from their fans without the need for intermediaries and they can further protect their digital assets from other malicious artists. A few African artists and individuals who have discovered the merits of NFTs are reaping big and enjoying the convenience of NFTs.
Sankore 2.0 is an Africa-focused community integrating the NEAR blockchain with projects and solutions conceived and built by local developers in Kenya. As noted in the content of this blog, Sankore 2.0 seeks to promote the development of Web3 products in Nairobi — for Kenya and for Africa as a whole