Africa has the youngest population in the world, a population that is increasingly tech-savvy, creative and hungry for new opportunities. NFTs are a game-changer for African artists and creators as it provides a new and more efficient way to monetise their content, manage intellectual property, and set royalties and revenue streams across multiple assets.
In 2021, NFTs have boomed in the African continent. Artists like Rich Allela, Lethabo, Osinachi, and Micah Johnson have shown how NFTs can help artists to build a global network, access to opportunities, and increase their revenues.
The creator economy is one of Africa’s largest and most untapped markets. NFTs can play a big role in boosting the creator economy, however, there is still a lot of confusion surrounding NFTs. This article aims at introducing NFT to those that are interested in exploring the opportunities that this new technology offers. It will explain in simple and accessible terms what NFTs are, how they work, and how they can be used to encourage new creatives to try them out.
What are NFTs?
NFTs — an acronym for the words ‘Non-Fungible Token’ — are digital certificates of authenticity. They are unique cryptographic tokens that represent a digital property on the blockchain, they are thus immutable and not mutually interchangeable like cryptocurrencies.
The most common use of NFTs is the representation of digital property. Most systems that support NFTs today allow digital work to be tokenized, be it a work of art, an image, a game, video or anything that can be digitalised. Although all these assets are indeed reproducible in copies, and NFTs represents ownership of the same: unique and non-duplicable.
To understand the concept of non-fungibility we should spend a few words explaining what something fungible is first. A fungible good is a replicable and replaceable good, thus lacking a specific individuality. A 10$ banknote can be replaced by any other 10$ banknote, as long as it is authentic and undamaged. In a supermarket, a bottle of a certain wine, from a certain winery and of a certain vintage is the same as another bottle of the same wine, from the same winery and of the same year. And in fact, they cost the same.
There are also non-fungible goods, which may look the same but which in reality are not. Like, for example, an authentic painting and every copy, however accurate it may be. Even a very simple painting that can be replicated. An original carries with it an idea and a story that no copy can ever repeat. NFTs are, therefore “digital information” that makes the file to which they are associated have its own uniqueness and individuality. In the case of digital works of art, this means that they are signed by their author, who thereby recognises their authenticity and can transfer ownership if necessary.
The blockchain and NFTs
Some people talk about NFTs as ‘assets’, some say they are ‘pieces of digital content, some talk about them as ‘digital signatures’. It depends on whether one looks at what they are (in fact, files that become assets thanks to a signature) or what distinguishes them (i.e. the signature that makes them unique assets). What really matters, however, is that — from cryptocurrencies onwards — you always need a blockchain for an NFT to exist.
The blockchain (literally ‘the chain of blocks’) is a control system maintained by thousands of computer terminals in which, as in a kind of large ledger, one can keep track of operations and transactions of various kinds. In the case of bitcoins, the blockchain makes it possible to guarantee the authenticity of each bitcoin, and therefore of each transaction using them. Among other things, the blockchain is also what makes it possible that — just like a 10$ bill — two bitcoins are fungible and therefore interchangeable.
Not only art
NFTs are not only about digital art. NFTs can be songs, videos, gifs, tweets or anything else that is digital. This article, too, could become an NFT if it wanted to. It is not the qualities that decide what an NFT is, but the properties that someone decides to associate with it. NFTs are starting to be used in various projects related to climate change and protection of biodiversity and new use cases are discovered every day.
Ownership and copyright
Whoever buys an NFT of either, buys ownership, authenticity and uniqueness. Unless there are specific and rare exceptions, however, the purchase does not include the copyright and the buyer cannot claim the copyright or decide on its uses. Whoever buys a few famous tweets cannot decide what to do with them, and in fact cannot prevent them from being shared, just like any other tweet in history.
In most cases, by buying an NFT you are buying a non-tangible good, which — in the case of an image — you can at most print. But that print, ceasing to be digital, is a copy, as will be that of anyone else who decides to print it in turn.
Theoretically, whoever owns the NFT of an image, rather than trying to limit its dissemination, should hope that the image becomes as widely known, disseminated and shared as possible. The real one, painted by Leonardo da Vinci, is only one, but there are many reproductions of it, and it is largely thanks to reproductions that the original work has such artistic and cultural relevance today.
NFTs — which can also be bought and sold in dollars, euros or other currencies, since blockchains are indispensable for their authenticity but not for their exchange — can cost a few euros or, tens of millions of dollars. It depends, as always, on where supply and demand intersect, what value is attributed to a certain good, and how widespread that good is.
In the last few months, however, a number of NFT buying and selling platforms have become established, often ‘artistic’ ones, but sometimes also others. Among the most popular NFT marketplaces are: Nifty Gateway, OpenSea and Mintbase. In the next article we are going to discuss in detail the pros and cons of different NFT marketplaces and identify the best ones for artists and creators.
The most important of the standards used for NFTs today is ERC 721, which provides relatively simple rules for the creation of a unique token on the Ethereum blockchain. The token is created on the blockchain, incorporating an ID that uniquely represents it. Since they are crypto tokens in their own right, these tokens can be exchanged either through smart contracts or manual exchange. They are, to all intents and purposes, assets that we can buy and sell, and many marketplaces have sprung up for this purpose, allowing for auctions or private deals.
The ERC 721, however, is not the only standard for NFTs. On the NEAR Platform the NEP 171 standard was developed which allows for both forever royalties and split revenues. This is a considerable improvement that guarantees the creator’s full monetization of their own works. With NEP-171, a royalty system is embedded in all the NEAR NFTs from the get go so that creators will be guaranteed to generate passive income from secondary sales.
Launching The New Creator Economy in Kenya With NEAR Protocol
In the African context, more people are turning to Web3 platforms to earn from their creations and this trend is clearly visible in Kenya too. Being the major tech hub in East Africa, as well as home to many artists, Kenya is well-positioned to become a major player in the new creator economy.
NEAR Protocol, with its infrastructure, can help further the penetration of the new creator economy in Kenya. Currently, NEAR offers some of the most innovative and user-friendly NFT platforms on the market such as Mintbase, DAO records, and Mitgate.
Being built on top of the NEAR blockchain, these platforms can perform extremely fast transactions, and unlike Ethereum based platforms, they guarantee stable and extremely low gas fees.
This infrastructure allowed NFT platforms to provide a wider range of benefits for artists. Mintbase, for instance, allows artists to mint their NFTs and deploy their shops for unparalleled prices. But it also allows the building of separate marketplaces on top of its infrastructures like DAO record, a marketplace dedicated entirely to music NFTs and events.
These platforms could greatly benefit Kenyan artists looking to monetise their creations and help launch the new creator economy in East Africa. And Sankore will remain committed to spreading the word and help people navigate the possibilities that Web3 opens up.