AlexCocoPro explains and shares what NFTs are and their impact on the art sector

In recent years, the technological advances that are impacting the way of doing business have been evident. With the arrival of cryptocurrencies as a decentralized alternative to the traditional banking system for investments and financial operations, many businesses are changing rapidly. It is evident that day by day applications and use cases of decentralized technologies are developed in different sectors in order to generate greater productivity and security.

In this opportunity, the creative sector is the protagonist with the adoption of cryptocurrencies, NFT technology and the impact that this is generating in the orange economy is significant. For this reason, we invited and talked, as a digital media group, to Alex Cabello, known as AlexCocoPro,, a Venezuelan engineer and programmer of smart contracts who, in addition to mastering the technological area, is also immersed in the aforementioned orange economy and NFTs as a musician. and visual artist. Who better than him to tell us about this business trend that is booming in the world and learn more about NFT technology and its impact on the artistic sector.

What are NFTs?

NFTs are non-fungible Tokens, technically they are assets that are protected by cryptography, supported by a smart contract registered in a blockchain in order to make counterfeiting impossible thanks to their unique, consensual and distributed registration in many nodes of a digital network. However, each one of the transactions is reflected, allowing its traceability. The system is based on a cryptocurrency blockchain whose registration is immutable and is not only constituted as a means of digital payment. Cryptocurrency networks such as EthereumSolanaTezosPolygon and Hive have a chain of blocks that allow programs to be saved. These are executed automatically when a series of conditions agreed by the parties are met, which is known as a smart contract.

– As a digital artist, how could you define Non-Fungible Tokens in a simple way?

They are like a certificate of authenticity that can be used to protect the intellectual property of digital files such as a song, an animation or a photograph, as well as being used to certify physical works such as a painting through digitization and registration in the blockchain. The registration process is commonly known as mint, which allows it to be a unique virtual piece that cannot be modified.

Cryptocurrencies are fungible assets, because they can be exchanged with others for their equivalent value, they can even be exchanged for fiduciary money, they are also divisible, such as bitcoin, the dollar or the bolivar. Non-fungible assets cannot be substituted for another, and their value may be subjective. An apartment is a non-expendable asset because it cannot be replaced by another due to its unique characteristics, in addition its value can be influenced by the location, the view, how it is conditioned, how the spaces are distributed, if it is close to a trending business, their nearby means of transportation, among many other factors. Works of art are non-fungible since a work by Picasso cannot be easily replaced by another of the same work by Picasso since its value will be influenced by many factors such as technical characteristics, technique, creative, conceptual, philosophical and historical value. . You can also expand and deepen on this technology by consulting a good article available on Wikipedia.

Why are NFTs in fashion?

Because they benefit both the artist and the collector. Through the smart contract, the artist can certify the authenticity of the work, can guarantee its scarcity by defining the specific number of authentic copies available, and can also program the percentage of royalties that can be received for each transaction made with the work. If the person who bought my work sells it for a higher or lower price, I can automatically get 5% at the time the transaction is executed, in case I have defined that royalty percentage, because it can be more. When an artist places their music for sale on Spotify, they only charge when their music is played on the platform, however, users often download music and share it from one device to another without being able to trace its use, for therefore, royalty money for intellectual property is lost.

So this technology allows artists access to the international market, especially with digital works. Digital works can be copied and shared on different devices, but these would be ordinary copies since there is a record that indicates who is their creator and who is their owner, therefore, selling an NFT is selling a certificate of authenticity. Pablo Picasso’s “El Guernica” is a unique work of art, and while many copies may exist, only one is the original. The same goes for NFTs, but in digital format. Some of my buyers have used the NFT to print and display it in their living room without being limited by geographical locations, but at the same time they have it stored in their digital wallet as a certificate of ownership.

When an artist mints an NFT, there is an immutable record of who was the creator of the work and when it is placed or sold, there is a record of the wallet address (digital wallet) that acquired it, which certifies who is the owner of the work in a decentralized public registry supported by a network made up of millions of computers around the world, which empowers the artists and the holders (the owners of the work). This registration also serves to grant benefits to the aforementioned holders, the latter serving as a tool to generate value and to create marketing campaigns.

– That is, can artists offer benefits beyond the sale of the work?

Absolutely. Many artists publish a roadmap and white papper so that their target audience is aware of the benefits they will receive from the purchase of the NFT or how the money will be used. Some artists use NFTs as a form of crowdfunding, offering holders a percentage of sales, percentage discounts on their projects, and even membership in an exclusive community. There are nightclubs that have VIP spaces for holders of a collection of NFTs. A work of art already has a use, however, many artists give it some additional use.

– So is it a good investment to buy NFTs?

Many wealthy people buy NFTs as a form of safe haven, much like buying a Rolex watch, for example. I don’t want to give investment advice, but those who want to collect Very Fungible Tokens should study the project well if they are looking for the purchase to be a refuge of value, since the value of art is quite subjective. A good use case is to find a work by an emerging artist whose technical and creative mastery allows it to be highly valued by other collectors.

Alex Cabello emphasizes that he has always considered buying art a good investment. “I have always considered that any type of asset is better than fiduciaries. The currencies issued by a central bank of a country over time have lost confidence. Financial indicators currently warn or show a recession in the United States, which will not take long to impact the rest of the world. The monetary policies of many governments do not guarantee to keep inflation at bay, which makes our money lose value. There will be people who find it more convenient to invest in machinery, work tools, properties and even precious metals, and others who prefer to invest in NFTs, physical art, stocks or cryptocurrencies. What I am sure of is that this technology is here to stay and evolve.

– Specifically or in summary, what is the impact that NFTs have had on the creative sector?

Now digital artists have a way to guarantee authenticity and exercise their rights as an author. In many fields of the cultural and entertainment sector, NFT technology is being implemented, to the point that artists are financing their tours with the profits obtained from their collectibles. There are artists who in a short time have become millionaires and have achieved international recognition. Others have simply crossed the borders of their countries using NFTs.

I would say that this is a revolution in the art sector and has a significant impact on the orange economy. Globally, the cultural and creative industries (CII) represent 3 % of GDP and generate 25.9 million jobs. OpenSea, an online marketplace for non-fungible tokens, moved over $202 million in July 2021 (read more). According to a study carried out by finder.com in September 2021, Venezuela was in the 9th position of countries that have adopted NFTs, in addition, 13.5% of those surveyed plan to buy an NFT. According to the same study, 67.6 % of those surveyed did not know about this technology, which indicates that as the benefits of NFTs become known, the intention to invest in them will increase (see report).

On the other hand, a market analysis company called Grand View Research, recently published a report projecting that the NFT market will grow almost 13 times over an eight-year period. Due to these data, I have decided to plan a massive training to educate on the subject of NFTs, in addition to the development of an organization that helps reduce the technological gap that exists in the creative sector to include more artists in this market, thanks to the support of several companies in the technology sector, whose dates will be announced through my social networks. “I really appreciate this conversation, your attention, and I greatly appreciate the opportunity.” This is how Alex Cabello closes his explanations and said goodbye to our editors.

BF.N

Based upon conversation with the interviewee

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