NFT, blockchain, Ethereum, Ether, cryptocurrency, eWallet, Metaverse… You have probably come across these terms often in the last few months. After all, they can be found in numerous headlines and fuel the debate over whether digital asset trading is just another investment bubble or if the hype has the potential to usher in a new era after all. For artists and investors in particular, this question seems to be of great importance. But what are buzzwords all about? What is the definition of NFT and why is it important? And how could a digital market for additive manufacturing be of interest? We spoke to Danit Peleg, a fashion designer known for her 3D-printed garments, and Ioan Florea, creator of the first 3D-printed art collection, to find out what art creators hope to gain from cryptocurrencies, especially artists within the community. 3D printing. Additionally, blockchain expert Jerome de Tichey, Global Head of Customer Success at Ledger and President of Ethereum France, provided insight into the legal challenges surrounding NFTs.
What are NFTs?
Although it may seem that NFTs are still a fairly recent phenomenon, they actually emerged in 2014/2015. But first, let’s clarify what NFTs are in the first place: NFT stands for non-fungible token, which means they are non-exchangeable. However, for this uniqueness of tokens to make sense, it is first important to understand that a non-fungible token has a certain value similar to other known forms of currency such as the Euro or Bitcoin. However, unlike Bitcoin, an NFT is not interchangeable with another NFT, they have an individual identification code and cannot be exchanged one-for-one with each other (as would be the case with Bitcoin or Euro). Because of this, it is possible to extract digital assets of any kind (such as illustrations, video clips, social media posts) and assign a certain value to them.
Let’s take a look at some of the works that have already been successfully sold as NFTs. The most expensive work is a JPEG file called “Everyday: The First 5000 Days” which was auctioned by Christie’s earlier this year for a whopping $69 million. It is a collage of 5,000 individual works of art by artist Beeple (Michael Joseph Winkelmann), making the American one of the three most valuable living artists. Another well-known example includes Twitter co-founder Jack Dorsey’s first Twitter post, which sold for $3 million.
NFTs meet 3D printing
In addition to this, in the world of additive manufacturing, it is increasingly possible to find artists who offer their works for sale on digital markets such as Rarible or OpenSea such as NFT. Danit Peleg is one of them. Not only is she one of the pioneers when it comes to 3D printed fashion, but she also knows how to create value for her designs using non-fungible tokens. In an interview with her, it turns out that the young fashion designer has been thinking about how to safely document the digital process of her works in some way and make it available to others for several years. She explains the process as follows: Once an interested party purchases a non-fungible token from you, the person gains access to a folder assigned to the NFT number. In this folder are a number of files, including instructions on print setup and a guide on how to assemble the individual pieces into the finished garment.
By providing buyers with files at the time of purchase, Danit Peleg creates a bridge between the digital asset and a physical object that buyers can 3D print themselves or order from you. She adds, “I allow my buyers to make the garments additively. I don’t restrict buyers in any way, quite the contrary, I find it extremely exciting to follow what they do with my creations later on.” For example, buyers have the opportunity to choose the material and color of their garment themselves, which in turn creates a unique physical object. If Danit Peleg had her way, entire collections could be sold as NFTs in the future. The purchased digital good could transform according to the season: a t-shirt could become a sweater for the winter season. In any case, he appreciates the multitude of new business opportunities that NFTs create for artists.
Ioan Florea, whose art is based on the philosophy and possibilities of open source technologies, also offers 3D printed art objects such as NFTs for sale. He explains, “I became interested after exhibiting my 3D printed liquid metal Ford Torino at the Inside Bitcoin-Inside 3D printing fair in New York in 2014. The theme for 2014 was the third industrial revolution with the 3D printed liquid metal Ford Torino making the transition from assembly line to blockchain open source 3D printing technologies… NFT gives you access to own and use the 3D printed file artwork, I think that is the first step of printed art in 3D to become a new art form. At this point, 3D printed art is not recognized as artwork for tax or customs purposes. It is considered machine-made industrial prototype not art. This reminds me of Constantin Brancusi in the early 20th century when his “Bird” sculpture was classified by American custom and registered in the same category with kitchen utensils.”
He also explains that the buyers of his NFTs are a generation that invests in cryptocurrencies and is convinced of its value and continued existence. Among them there are usually people who spend a lot of time in the virtual world. Like Danit Peleg, Florea buyers also receive the 3D file with unlocked content, in some cases also a link to the original STL file. Here, Florea specifically points out the advantage of 3D printing NFTs, as they are often associated with a physical object; At a minimum, buyers would have the opportunity to generate a physical item themselves, which is not the case with other digital goods. This makes 3D printing an ideal candidate for NFTs, as even if the cryptocurrency price fluctuates, buyers would still have a physical art object to touch.
Where is the token located and what is the legal basis for owning one?
Like other cryptocurrencies, NFTs are based on a blockchain, that is, a decentralized database, which helps to store the “fingerprint”, the so-called “hash” of the work and to identify its uniqueness and ownership. Among the most popular blockchains is Ethereum. Jerome de Tichey explains the following, “Ethereum provides the flexibility to list, auction and automate NFTs. Smart contracts (basically the software used within the blockchain) get to play an important role in Ethereum, while they are used to a limited extent in Bitcoin.” These smart contracts can stipulate, for example, that the creator of the work will receive a certain percentage of the sale value each time it is resold. This gives artists the great advantage of being able to benefit from an increase in the value of their works.
NFTs are virtual goods, located on a blockchain, and are intended to attribute ownership of a work of art to buyers. This, of course, raises many legal questions, especially regarding copyright, data protection laws and financial aspects. Jerome de Tichey explained to us in a conversation that we are currently still in a completely gray area when it comes to intellectual property rights. A variety of experts in the field of intellectual property, he says, agree that there are no rights associated with NFT to the file to which the token is linked, and that no regulations can currently be applied to this case. The rights associated with NFTs could only apply in the context of the blockchain on which they are issued and exist.
Jerome de Tichey expanded on this, noting the following: “Take the example of a work of art: As an artist, I use a cryptographic key pair to sign a blockchain transaction that generates the NFT. This step is similar to the technology used in most digital signatures of documents, which you may have received by email yourself. At the same time, I am assigned a file that represents my art. Now I can transfer and sell this NFT to anyone, and anyone can prove that this NFT originally came from me because it has my digital signature. After releasing the NFT, someone can copy the file and create another NFT with the same file using their own signature, there is no barrier here. However, if a third party runs a blockchain-based museum, that third party can only whitelist and publish the NFTs of verified artists, while the art curator can track every NFT an artist has created in real time.”
Future prospects and challenges
Ioan Florea explains in the interview that it is currently not yet possible to store 3D print files (STL/OBJ) directly on the blockchain; this would be called with a link (which is therefore not protected with the blockchain, which is a significant disadvantage for buyers). He hopes that this will change in the future and that platforms will also make crypto mining more efficient or sustainable. He also points out that some platforms are prioritizing animations and JPEG videos, traditional digital media. 3D printing, he says, is a relatively new art form, but one that will become more common. Danit Peleg also hopes that NFT can help democratize fashion entirely. She can imagine that in the future her clothes will be worn not only in the real world but also in a metaverse (a collective virtual space). Peleg is also convinced that NFT’s high energy consumption, and thus its damaging impact on the environment, will improve significantly over time. Why blockchain needs so much power will be explained in the next video.
Now you may wonder why non-fungible tokens are offered and then bought. Can digital goods have any value? And how can the negative impact on the environment be justified? Admittedly, opinions are still divided on this question at the moment. While some clearly see the added value and potential of NFTs, others have many question marks. Therefore, it remains to be seen whether, and to what extent, NFTs will determine how we value digital assets in the future. In any case, we will continue to follow the trend and are already excited to see what other opportunities will arise in this area for 3D printing.
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