Since the beginning of its inception, NFT has been disrupting the traditional art marketplace with its value surging up to $2.5b in the first half of 2021. Lately some successful Malaysian artists have been contributing to that growing number. Here is a quick guide on how to get started.
By Eeyan Chuah
To this day, the term ‘digital art’ is still causing a certain amount of controversy mainly because traditional galleries and art institutions have yet to properly determine its monetary value due to its lack of physical form and the difficulty in establishing the original copy of an art-piece. Still, more and more artists today are no longer chained to the confines of a blank canvas and digital art practitioners have now emerged as a new artistic community that is here to stay.
Enter the NFT (Non Fungible Token) market. Since the beginning of its inception, NFT has been disrupting the traditional art marketplace with its value surging up to $2.5b in the first half of 2021. Lately, some successful Malaysian artists in the NFT forefront such as Katun, Ronald Ong, and Red Hong Yi have been contributing to that growing number.
The Nyan Cat meme which sold for nearly $600,000.
Why NFT
Being a Non Fungible (replaceable) Token, when you mint—the act of registering a digital file on the ledger—your artwork as an NFT, it automatically gets assigned a unique set of code information that authenticates the file as yours. Basically, your artwork is now a digital asset. And when it gets sold, the asset will be transferred to the new owner.
Essentially, NFTs create digital authenticity. This makes it valuable in the digital world where almost everything is a copy. By selling their artwork as an NFT, the artists get to decide the scarcity of their assets (the artist can also decide the number of editions made available for each NFT).
Perhaps the most rewarding feature of the NFT market is the royalty scheme. Not only do the artists profit when their works get sold, they continue to earn a certain percentage of royalty every time the artwork gets resold. This is usually 10% and the platform takes roughly about 2-3% from it; on some platforms, the artists can set their own percentages. This is completely automatic as everything is programmed in the ledger. Therefore, if your work gains popularity on the platform, it will continually balloon in value.
Frisky Cat Club series by Sumidik
How to get started
For Malaysian creatives who are interested in gaining exposure in the NFT marketplace, I have been talking to some of the local artists who are already active in the platform. Here are some suggestions on how to get started:
1. Choose your platform
If you are lucky enough to be invited on certain more exclusive platforms, Foundation.app is a good one to be on and so is KnownOrigin. In September, KL-based street artist Kenji Chai was invited by Red Hong Yi to be part of the drop that launched TIMEpieces, a new NFT community and initiative from TIME. Invites aside, NFT is such a mass market space, with something like a new NFT being minted every minute, that the digital world can be your oyster. OpenSea and Rarible are two of the most popular global NFT markets right now that are accessible to anyone with an internet connection. Penang-based artist Sumidik uses OpenSea but if you are looking to start out in a smaller pool, he also suggests local platforms such as deNFT and Pentas. To research more about NFT platforms, you can visit https://decrypt.co/80595/best-nft-marketplaces.
2. Set up your crypto wallet
Since NFTs are built on a cryptocurrency blockchain, all sales are conducted in cryptocurrencies. If you would like to get started, you need to set up a crypto wallet. Most NFT platforms would have a built-in wallet you can set up when you sign onto their platforms. Most Malaysian creators use Metamask or Trustwallet as they are most widely used by the NFT marketplace. It is free to set up a wallet.
3. Invest in some cryptocurrency
Once you have set up your wallet, you would need to invest in some cryptocurrency as there is a set-up fee required when you sign onto an NFT marketplace. Most NFT platforms are built on the Ethereum blockchain. Therefore Ethereum (ETH) is the most widely used currency in the NFT market—and yes, it is approved to be used by the Securities Commission in Malaysia. You can buy ETH at one of the Malaysian approved crypto currency exchanges, most notably Luno, SINEGY and Tokenize. (To understand more about investing in cryptocurrency in Malaysia, visit https://ringgitohringgit.com/investing/cryptocurrency-malaysia/.) However, there are platforms such as Hic Et Nunc which is built on the Tezos blockchain and uses its currency ZXT. Some of the Malaysian artists who recommend this platform are Orkibal and Chun Woei.
4. Start minting!
The last thing to note while you get ready to mint is you have to be prepared to pay a one-time fee at the platform of your choice. They call this a gas fee. In the Ethereum blockchain, gas is a unit of measurement for the amount of computational power required to execute certain operations on the blockchain. Every operation, be it a transaction or smart contract execution, requires some amount of gas. Gas is used to calculate the amount of fees owed to the network in order to execute the operation. So for example if you are a collector, you would also need to pay the gas fee every time you purchase an NFT. Every platform differs. For now, OpenSea charges about 100USD for newcomers. To be safe, you would need to prepare around MYR500 to start minting.
Cryptocurrency mining in Bratzk, Russia. Picture by Maxim Shemetov, taken from https://qz.com/2023032/how-much-energy-does-bitcoin-use/
The downside of NFT and the measures taken
It is important to note that while blockchain technology used in the world of cryptocurrency is revolutionary, it is relatively new and users are still learning of its disadvantages. Namely, its effects on the environment. The way in which transactions are secured and trusted on the blockchain is highly energy-intensive by design. According to an article from Harvard Business Review, Bitcoin (the first and most expensive cryptocurrency) alone currently consumes around 110 Terawatt Hours per year—0.55% of global electricity production, or roughly equivalent to the annual energy draw of a country the size of Sweden.
When I spoke about this issue with Desmond Santhanasamy, a Certified Cryptocurrency Expert (CCE) and the co-founder of School Of Cryptocurrency Trading (SOCT), he sounded hopeful. According to Santhanasamy, the Crypto community is already working on measures to reduce the carbon footprint, for example, by moving mining to Iceland where they have a natural cooling system for the computers using the cold weather. Ethereum has also announced that they would be launching a new currency ETH2 which uses the ‘proof of stake’ algorithm instead of ‘proof of work’ that would cut their energy consumption by 99%. To learn more about how these algorithms work and the effects of blockchain, you can watch this Ted Talk by Tara Shirvani.
Lastly, while it is encouraging to see some artists gaining success on this digital platform, the artists themselves need to put in the effort to promote their work as there are no galleries involved. If you are a creator who is seeking more guidance on NFT, you can consider signing up for Santhanasamy’s short module on NFT for beginners. In it, he will be guiding you on how to create your wallet and how to mint your first NFT.
Cover Image: Silap La Sheitan by Orkibal, minted on Hic Et Nunc
Eeyan Chuah — from Penang, lives in Penang. Writing is one of her very few skills.