Introduction

 The act of buying and selling art is called art finance. Art finance has always been active regardless of the times. However, there was a strong perception that art is a symbol of wealth and a hobby that only rich people can enjoy. The rich often buy the works of famous artists betting that the values that will blow up in the future or showing off their taste. In terms of a nation's cultural revival, the nations have also focused on collecting artworks. The Pushkin Museumin Russia can be seen as an example of this. You can see Van Gogh's the only work sold in his lifetime. Starting with Arles' red vineyards, there are also famous artists’ works from all over the world. When you think of art according to upper information, everyone will think that it is difficult for us to get interest in art, and only wealthy people and large organizations such as the country can buy. However, nowadays, art has broken the above prejudice that many people think. There is a lot of information about art finance on the Internet, and there are also many people in their 20s and 30s who make money through art finance technology. There are keywords that have been central to this art financial technology, which is NFT. What is the NFT that you see a lot on the banner when you go to take the metro? Let us find out about NFT, which has appeared like a comet since last year, and how we can use it.

1. What is an NFT?
 
 Before we talk about NFTs, we need to understand the technology of blockchain, and we need to understand it by connecting cryptocurrency and NFTs. First, block means data. It is easy to understand that blockchain is what creates a system that connects data so that everyone can check out all of the information and people cannot manipulate it. Blockchain technology is characterized by being able to easily make important transactions in that it can be traded without going through powerful institutions such as the government or banks. Cryptocurrency is a technology that uses blockchain technology to allow everyone to trade equally without giving preferential treatment to one organization or person, and NFTs are a certificate of trading similar to cryptocurrency in that it uses blockchain technology. Then let's look at the detailed definition of NFTs.

1-1) Definition of NFT
 NFT stands for Non-Fungible Token. The irreplaceable token is literally impossible to exchange and can be seen as a product that gives economic value using blockchain technology. It is easy to think of it as a registration certificate. The history of ownership, information of owners, and prices of the products they bought are engraved on the blockchain, so that people around the world can know the exactly who has owned it and when. To give an example, Michael Jordan's game-worn shoes match are likely not to be exchanged for anything if they are guaranteed to be genuine, regardless of who has them. Also, a replica would not be identical to the original. It would be easy to think of Michael Jordan's shoes in that there is only one NFT and it is irreplaceable.
 If you look at the platform used in NFT transactions, the largest NFT exchange in Korea is Pala. It was made by Naver, and its advantage is that the sales fee is relatively cheaper than other places. It also has the advantage of being very safe because only verified NFTs are uploaded. However, as a disadvantage, only the NFT of the blockchain called Clayton can be traded. In other words, Ethereum and polygon, which are widely used in NFT transactions, are not allowed.
 In addition, OpenSea is the most commonly used platform. As it is large in size, it has good liquidity and supports various chains as well as Clayton. Therefore, it is more convenient than Pala when it comes to using it. However, unlike Pala, which has no worries about fakes, OpenSea is always careful because there are many cases where individuals can sell NFTs, so they can always track people with fake photos.
 In addition, OpenSea is the most commonly used platform. As it is large in size, it has good liquidity and supports various chains as well as Ethereum. Therefore, it is more convenient than Pala when it comes to using it. However, unlike Pala, which has no worries about fakes, people should always careful while using OpenSea. There are many cases where individuals can sell them at will, so they can always trick people with fake photos.

1-2) Type of NFT
 NFTs are largely divided into four types.
 First, it is called Art NFT. It is the center of our discussion today. It includes paintings, photos, music, and videos. It is released in various forms such as 2D and 3D. It can also be seen as a starting point for NFT. The most representative example of Art NFT is the digital art of Grimes, a Canadian singer and former girlfriend of Elon Musk. Grimes made the painting based on the baby figure in her music video, which was sold for 4.58 million dollars in 20 minutes.
 Second, there is a profile NFT. This is NFT in the form of a picture that can be used as a profile on social media such as Twitter. It is characterized by a large number of pictures being taken in one group. For example, if there is a human shape, the face shape, skin color, accessories, eyes, nose, mouth shape, and expression are drawn one by one, and the computer synthesizes them into different shapes and gives them uniqueness. Those who purchase profile NFT often set it as their SNS account profile or purchase it for attention. Crypto Punk, one of NFT's famous works, can be seen as the most representative example.
 Third, there is the land NFT. It is a concept mainly related to Metaverse. If there is a Metaverse platform, there is bound to be land in it, and the land can be easily viewed as a digital land document. You can purchase the land in the game and use the land yourself. Nike Land is a representative example, and Nike also purchased the land NFT so that people can see Nike items and purchase virtual clothes within Roblox.
 Fourth, there is the game NFT. It is also often called P2E (play to earn). It is a form of buying a character or good item to raise a character to make money. One of the most famous P2E companies is Gala Games. It is a company that makes games like its name, and it had released games with virtual currency and NFT. Among them, the representative game is Townstar. If you buy the items shown in the picture, you can get Gala Coin. This allows you to upgrade to a better farm or sell it to the exchange. You can think of it as a game NFT that you can make more money by investing money.

1-3) Why is NFT important?
 The reason why such NFT is important is that it has a great influence on the Metaverse. Since Metaverse operates on the basis of an economic system in which digital assets are distributed and various people try to benefit from their creations, NFT can be seen as essential to the operation of the Metaverse economic system. For example, maps or clothes that are made by others in the Metaverse, people may sell them at the cheap price within the same virtual space after replication. In order to prevent this and receive the right value for the creation you created, you need your own unique identification value, which is the same as you need a certificate of authenticity in reality. NFT plays this role, and NFT allows users to expand their world by trading assets with other users on Metaverse.
 Then, let us take a look at the works that have been a big issue in the NFT market among the works traded so far and look at the process of gaining popularity.

2. NFT's Famous Works

2-1) Crypto Punk (2017)
 The start of NFT's full-fledged business is in the Crypto Punk series with Matt Hall and John Watkinson. Crypto Punk consists of 6,039 male characters, 88 female characters, 88 character of zombies, and 33 ape aliens, which can be viewed as profile NFT. Serena changed her Twitter profile from Serena Williams' husband's gift of Crypto Punk, which resembles Serena. This made the spotlight and caused a huge price increase.
 This is related to changes in the consumption pattern of art. In addition to the general personal possession we know, the purpose of boasting on social media is now added. This change in consumption patterns became an opportunity for the price of NFT to rise further because it became a means of showing one's wealth.

2-2) Crypto Kitty (2017)
 Crypto Kitty is a kind of game that can be played with Ethereum and was created by a company called Dafer Labs. NFT is created as a result of the game. When you grow the Krypto Kitty you bought, a partner appears next to you, and you can make money depending on what character comes out of the egg with the partner. In fact, the rare Crypto Kitty NFT was traded for more than 100 thousand dollars and the Ethereum network was paralyzed by many people's connections. As a result, those interested in cryptography could understand what NFT is, even if they had no experience of playing Crypto Kitty.

2-3) NBA Top Shots (2020)
 Until the days of Crypto Kit ty, NFT was known only among those interested in cryptocur rency. However, Dafer Labs began to secure the popularity of the NFT service by releasing NBA Top Shots with the National Basketball Association (NBA) in 2020, based on their experience at Crypto Kitty.
 NBA Top Shot is a service that publishes games of NBA basketball players on NFT. It was launched with a global sports association, drawing public attention, and the inf lux of users was quick because there were enthusiasts who collected cards from sports players before. NBA Topshot's sports card with LeBron James' dunk scene was traded at 14 million dollars in 2021.
 With the success of NBA Top Shots, various sports industries have begun to show interest in NFT. This is because ticket sales and advertising sales have decreased, since sports games have been canceled or spectator participation has decreased due to COVID-19. According to the EU Commission, in 2020, NBA canceled 258 games due to the suspension of the season, and suffered losses in admission fees ranging from 170 million dollars to 210 million dollars. The loss of revenue from broadcasting rights amounted to 800 million dollars.
 As a result, NFT issuance has emerged as a new business in the sports industry. In the long run, spor ts fans' interest and par ticipation can be maintained without any decreasing. The National Football League (NFL) announced its plan to launch the NFT service "NFL All Day" with Dafer Labs. Italian professional football club AC Milan also introduced 100 NFTs last month, collaborating with Chiliz.

2-4) Every Day: First 5,000 Days (2021.3)
 The reason why NFT became a hot topic of conversation even to the public was when NFT applied the technology to the auction of expensive art. At Christie's online auction in New York in March 2021, digital art artist Biffle's work with NFT technology were sold for 54 million dollars.

2-5) Other hot winds
 In addition, as the popularity of collections increased, the art world also stepped into the NFT. The artist Grimes, who was mentioned in Art NFT above, made 50 million dollars by selling works made of NFT. There have also been people, who make NFTs out of meaningful events which they are not pictures. Twitter founder Jack Dorsey published his first Twitter post on NFT. The NFT was sold for 3.4 million dollars through an auction.
 The NFT craze continued not only in the art world but also in the cultural circles. An NFT that Lee Se-dol beating artificial intelligence Alphago was sold for 250 million dollars. The KanSong Museum of Art released 100 NFTs containing the Hunminjeongeum Haeryebon in July 2021. The Hunminjeongeum Haeryebon NFT was sold for 129 million dollars each. The proceeds were spent on art museum operations and cultural property research. It can be understood that NFT has emerged as a new moneymaker for cultural projects following sports.
 The entertainment industry has also begun releasing NFTs that containing photos of celebrities. The NFT collection, which stimulated the fandom of idols and broadcasting programs, was published in anticipation of making profits. MBC has created an NFT featuring popular scenes from the entertainment show Infinite Challenge. JYP Entertainment also announced that they will enter the NFT business. BTS agency HYBE will establish an NFT joint venture with Dunamu in the United States in 2022.
 NFT became very popular and gave good benefits to various artists, but several problems also occurred due to its rapid increase of popularity. Let us find out what are the advantages and disadvantages of these NFTs and what are the complementary points.

3. Advantages and disadvantages of NFT

3-1) Advantages of NFT
 First, it opened the door to opportunities for amateur artists. Art works are generally traded through galleries, and one can sell one's work through galleries only when the artist's awareness is accumulated. Amateur artists did not have a chance to sell art works because they did not have a reputation, but it is significant in that they can easily sell their works through the Internet environment called NFT.
 Second, even though it is a digital file, it has the advantage of scarcity in that it is one and only. Works traded in real life can be easily reproduced even though they are copyrighted. However, using NFT creates a clear scarcity of a single genuine recognition code as the first at the time of production, so the value can be recognized compared to unauthorized copies.

3-2) Disadvantages and complementary points of NFT
 First, there is a problem with copyright and the legal issues. In July 2022, a cryptocurrency businessman burned a picture that existed in reality to sell the NFT which is Ominous Ghosts that Frida Carlo drew in her diary. It can be seen as an ulterior motive to burn the original and sell the value of online NFT higher. This problem is similar to a trading company that tried to burn Basquiat paintings in 2021, and it can be clearly understood that there is a conflict with real works in online work transactions and that copyright problems arise. NFT is a technology using blockchain and it is a technology that can be used worldwide. In other words, there is a problem that the copyright can vary every time on the Internet based on which country's law should be observed.
 Second, there is a problem that the price has gone way too high. This is caused by people's speculation, and the problem is that the overall price has become expensive as a result of a series of articles saying that information on NFT was sold at a high price in a limited state. In many cases, the price is significantly higher than the actual value because it was made by a famous artist.
 Third, there is also the problem of contributing to environmental destruction. Like other coin and blockchain technologies, NFT also consumes too much electricity, which is one of the most serious aspects. Currently, most NFTs operate on an Ethereum basis, where enormous power is used in the process of proof-of-work method used. Considering that the average power consumption of Ethereum transactions is 48.14-kilowatt hour, NFT, which trades thousands a day, creates a big problem in power consumption. The average power consumption per person in major OECD countries is 8,165 kWh, which shows how much power is used for NFT compared to thousands of NFTs.
 Accordingly, some NFT platforms are trying to promote image improvement by accepting criticism and operating based on blockchain that uses less electrocity, but they are currently recognized as a technology that causes global warming.

4. Points to note before trading NFT
 First, checking the original is important. When you access the platform as OpenSea, there is a cover that shows the work in advance like YouTube's thumbnail. Some people exploit it by putting an address of a whole different work on the thumbnail. Thus, unlike a thumbnail, there is a possibility that the other work would appear instead of the original one.
 Secondly, caution should be taken against the collapse of the NFT. NFT is traded in cryptocurrency, so it is affected by the price of cryptocurrency. In other words, investing in NFT holds a buying position in cryptocurrency and NFT at the same time. Since the cryptocurrency called Ethereum is mainly used, understanding of Ethereum should be the basis. If the price of cryptocurrency and NFT fall at the same time due to the large association with cryptocurrency, they will suffer a greater loss than ordinary cryptocurrency transactions. Therefore, when investing in NFT, it is necessary to simultaneously consider the fluctuation prospects of cryptocurrency and NFT used in the NFT platform.

5. Making NFT

 For a more detailed understanding of NFTs, nothing is more helpful than making NFTs directly. NFT needs to use cryptocurrency in the process of making and selling people themselves, and I would recommend that you learn by manufacturing a platform called OpenSea from the process of registering it. In this article, we will show you how to create a profile NFT.

[Profile NFT]
 Profile NFTs are characterized by mass production of most NFTs, which are made with minor differences. Crypto Punk, which was examined above, is a representative profile NFT, and has the characteristic of completing more than 10,000 photos with only minor differences in detail.

[Create NFT Pictures]
 1) If you plan to produce it through a simple work, such as Procreate or Photoshop, you can also make it by using Pixie Engine.
 2) Draw the pictures you want separately in the order of background, mouth, head, face shape, body, and eyes (you can easily fill them in while setting the layers) and classify them separately.
 Note) The background of each file should be set transparently except for the background file and should be saved as png.
 3) Go to a site called Mitables, sign up for membership, and then go to your project. After specifying the group name, you can make each layer below and put a folder in it.
 4) You can set a rare degree in each folder, which allows you to set the probability that the corresponding head parts or other parts appear for each NFT.
 5) Each of these created pictures can now be sold through a platform called OpenSea.

[NFT Sales]
 The NFT is best sold through a platform called OpenSea. There are many trading platforms other than OpenSea, but OpenSea has the advantage of being able to trust and use it because it is the platform with the most transactions. It can be traded through several cryptocurrencies, but among them, I recommend selling it to Ethereum. The reason for this is because Ethereum is commonly used for NFT transactions. There is also a fee essential to pay in order to sell your painting, so I recommend you to compare several cryptocurrencies and find the cheapest one.
 In this way, if you create a phrase and cover to promote the NFT you want to post and post it on OpenSea, you can sell your NFT directly. Personally, the profile NFT can be easily created through the program, so it is recommended for beginners. If you want to sell your paintings using other programs, you can easily negotiate by just learning how to trade above.

6. Crash of NFT

 NFT, which used to be popular as of 2021, is still actively traded as of 2022, but the market size is decreasing due to the decline in the value of cryptocurrency.
 In the event of an economic crisis, the market has been reduced because the reality is that art transactions, which are the most distant from our lives, will always be pushed back to the bottom. As a result, NFT transactions, which were close to $16.57 billion in January 2022 as of May 2022, plunged to $4 billion in May, with reports of a 92% reduction in the market.

7. Future Value of NFT (Expectations)

 As mentioned above, the market is shrinking, but the reality is that artists can still have benefit and there is no convenient trading platform. Since the past, when creating songs or art, it has been a form of selling and distributing prof its through agencies or trading platforms. However, with the development of NFT, the creator themself became the subject and could sell copyright. In other words, there is a clear reason for the transaction of the art world using NFT to become active again.
 In addition, it is of great significance that the fashion industry has stepped in. Nike has sold virtual clothing through collaboration with Artifact, which specializes in virtual clothing and shoe design, and is paying attention to NFT by opening Nike Land in cooperation with Metaverse game Roblox. In addition, Dolce & Gabbana made 34 billion won in NFT profits with the Collecione Genesis collection that connects the physical and metaphysical aspects of fashion. Tiffany, a famous necklace brand, earned 117 billion won by selling 250 pendants on a limited basis, modeled after CryptoFunk, and Gucci launched Gucci Garden on Meta verse and continues its interest in NFT with 15.5 billion won in profits through the NFT limited edition.
 As such, fashion brands have found a means to prove that their items are genuine in NFT, and they have also confirmed the opportunity to show the value of their clothes on Metaverse. As there is a way to check the value of one's own items online, it is expected that there is an infinite possibility that not only clothes used now but also various items and land with values can be traded using NFT.

Conclusion

 After the advent of NFT, people who were very interested in art became a good opportunity to buy art and own it more easily, and amateur artists were also given the opportunity to easily unfold the art they wanted. Not only art, but also various people have found a place where their value for their creations can be recognized. Of course, the reality is that many problems are occurred. NFT's natural value are disappearing due to speculation and illegal use. However, NFT still has the potential to make the world practical in many ways, and in the future, real estate transactions and other transactions are expected to be available through NFT. Therefore, it is important to know about NFT, and should find out more by trying several things yourself which is an important key to preparing for the future.