NFT: Non-fungible tokens: What you need to know

Activist and Artnet contributor Kenny Schachter believes digital art will overtake conventional art in five years.

Both Coinbase and Sotheby’s, which has been around since 1744, announced this month that they will be creating NFT marketplaces.

Nonfungible tokens (NFTs) are non-replaceable assets that are verified and stored utilizing blockchain technology. From music to a website domain, the current fad is digital artwork.

Activist and Artnet contributor Kenny Schachter believes digital art will overtake conventional art in five years.

Both Coinbase and Sotheby’s, which has been around since 1744, announced this month that they will be creating NFT marketplaces.

Nonfungible tokens (NFTs) are non-replaceable assets that are verified and stored utilizing blockchain technology. From music to a website domain, the current fad is digital artwork.

Where can I buy NFTs?

Purchase the digital artworks on Opensea.io, Niftygateway.com, and Superrare.

A computerized artwork sold for $69 million at a recent Christie’s auction. This month, Sotheby’s announced the establishment of its own NFT marketplace.

Managing director Sebastian Fahey said Sotheby’s is in a great position to apply its experience and curation to the developing world of art for the digitally native youth.

How big is the NFT market?

According to DappRadar, a business that collects statistics on crypto-based applications, the market reached $10 billion in Q3 2021.

How much are NFTs?

‘What you can get away with,’ Schachter says.

However, the artist’s reputation, gallery exposure, and fan base are important criteria, he adds.

Who taxes them?

NFTs usually taxed at the IRS’s collectibles rate, according to Shehan Chandrasekera, CPA and tax strategy head at Cointracker.io.

Thus, appreciation on digital artwork held for less than a year taxed at up to 37%, and appreciation on artwork held for more than a year is taxed at up to 28%.

Notably, if someone uses cryptocurrency to buy an NFT, they will be charged capital gains taxes on their digital coin income, according to Chandrasekera.

“Many people are unaware,” he stated. “They assume I used my crypto. No cash out.’ People must be very cautious.”

Who buys NFTs with cryptocurrencies?

In fact, Schachter claims there is a substantial overlap between the two groups. “These are internet natives.”

Cryptocurrency owners have had limited options to spend their gains until recently. Buying a house or automobile using bitcoin or ethereum is more difficult.

It’s as if there was a sudden glut of inventory.

What are the flaws?

The old art industry is afraid of change, so it criticizes NFTs, Schachter argues.

“The first step is to equate it with money,” Schachter added. It’s only money. What’s more valuable than art hidden in a freeport?

Others contend that art should seen in museums, not on screens. “But you already have dedicated NFT gear at your desk,” Schachter added. “It’s a standalone device that loops NFTs.”

Skeptics abound.

The area controlled by people hiding their desire to make money behind a passion for art, according to entrepreneur Anil Dash.

“The same folks are purchasing meme stocks,” Dash remarked. “They don’t expect GameStop will suddenly become a master at selling videogames, any more than they think this awful monkey painting is worth a fortune.”

Are there risks?

Schachter said buyers should safeguard digital artworks as carefully as they treat online bank accounts.

“Whenever there’s money on the table, there’s going to be criminality,” he say.

The major risk is losing all your money if a digital artwork loses value.

Is it art?

NFT has already exhibited in big locations including London and Cologne.

Meanwhile, an NFT museum is coming to Midtown Manhattan.

“The genie is out of the bottle,” Schachter say.

The technology will coexist with ancient art forms like sculpture and painting, he said.

“There will be 3-D hologram projections of sculptures,”.

What are NFTs? Here’s what you need to know about non-fungible tokens (cnbc.com)

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