{"id":5837,"date":"2022-01-26T00:15:00","date_gmt":"2022-01-26T08:15:00","guid":{"rendered":"https:\/\/www.cultofmoney.com\/?p=5837"},"modified":"2022-01-26T10:55:51","modified_gmt":"2022-01-26T18:55:51","slug":"what-is-art-blocks","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/what-is-art-blocks\/","title":{"rendered":"What Are Curated Art Blocks NFTs?"},"content":{"rendered":"

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One of the most popular purposes for non-fungible tokens (NFTs)<\/a> is to collect interesting and unique digital art. Art Blocks is one platform using this interest to offer access to generative, on-demand digital art. If you\u2019re interested in NFT art, this might be the platform for you.<\/p>\n

Let\u2019s take a look at Art Blocks, how it works, and what you need to know if you want to invest in NFTs through this platform.<\/p>\n

What Is The Art Blocks Platform?<\/h2>\n

Art Blocks was founded by an artist that goes by the name “Snowfro<\/a>.” Inspired as a collector of CryptoPunks<\/a>, he set up his own platform on the Ethereum blockchain for generative art. The Art Blocks project focuses on a type of collectible that deals with randomly-generated attributes. Digital artists can use a generative algorithm to create art. An artist makes a \u201cdrop\u201d using a generative script. Then, a collector can \u201cmint\u201d a piece of artwork through a purchase (made with ether). The script generates a unique piece of digital artwork as an NFT.<\/p>\n

Basically, Art Blocks is like being able to commission a piece of art from a digital artist.  Later, it\u2019s possible to sell the NFT on the secondary market. Some pieces of art generated from Art Blocks have sold for millions of dollars on markets like OpenSea.It\u2019s important to note that licensing is part of Art Blocks projects. In some cases, you may receive a fully unrestricted license, but other artists may only license the piece for personal use. Carefully consider how you want to use your artwork before you make your purchase.<\/p>\n

Art Blocks Curated<\/h3>\n

The Art Blocks platform is based on having three different tiers of artists and releases. The top tier is called Art Blocks Curated<\/a>. These curated collections are arranged in series and must be approved by the Art Blocks curation board. Artists and collaborators can submit their artwork and script for approval.Once a series is approved, it\u2019s dropped on the Art Blocks platform. Each set has an approved maximum number of iterations. So, once enough people have minted something by an artist in the series, there are no more new works in that set. Because of the limited nature of the drops, many people try to be first when a drop takes place. You can find out more about when a drop is likely to happen by following the Art Blocks Twitter account<\/a> or joining the Art Blocks Discord server<\/a>.<\/p>\n

Art Blocks Artist Playground<\/h3>\n

While the Curated works are considered part of an official Art Blocks collection, there are other opportunities for artists to create drops and experiment with their digital art.<\/p>\n

The Artist Playground<\/a> is exclusively for artists that have been featured in the Curated collection. Here, artists can also experiment further with on-chain art. <\/p>\n

If you miss out on a drop as part of the Curated Art Blocks, you could potentially purchase some unique artwork by going through the Playground. Once again, after you purchase the NFT, you’ll have the option to keep it or to sell it on the secondary market. <\/p>\n

Art Blocks Factory<\/h3>\n

Rather than waiting to be accepted as one of the Curated Art Blocks artists, it\u2019s possible to launch your collection in the Factory<\/a>. You\u2019ll use your script to offer different versions of your generated art and people can buy it. <\/p>\n

The NFTs aren\u2019t always as valuable when they come from the Factory, but they can still be interesting. And some Art Blocks Factory NFTs sell for tens of thousands of dollars.<\/p>\n

How Much Are Art Blocks NFTs Worth?<\/h2>\n

As with any asset \u2014 and especially with art and other collectibles \u2014 Art Blocks are only worth what someone is willing to pay for it. In general, art released as part of the Curated Art Blocks collection will fetch higher prices than those released from the Artist Playground or from the Factory.One example from the Curated collection, Chromie Squiggle #3784 from Snowfro<\/a>, sold for the equivalent of about $2 million in August 2021. When buying something from Art Blocks on the secondary market, the floor price is often in the thousands of dollars, no matter which type of project it comes from.<\/p>\n

How To Buy Art Blocks Pieces<\/h2>\n

There are two ways to buy Art Blocks: through an initial drop or on the secondary market. You\u2019re likely to get a better price if you\u2019re able to buy through an initial drop.<\/p>\n

NFT art continues to rise in price, especially for rare and unique tokens. So if you want to buy on the secondary market, you might have to pay more.<\/p>\n

Buying Art Blocks NFTs During Initial Drops<\/h3>\n

In order to mint your own NFT from a particular Art Blocks project, you need to have Metamask<\/a> as a browser extension. Start by installing Metamask if you don\u2019t already have it. When you have Metamask connected to Art Blocks, you\u2019ll be able to see a purchase button next to available projects.Remember: many artists limit the number of iterations available from their script. If a project has reached its iteration limit, you won\u2019t see a purchase button.<\/p>\n

If there\u2019s still availability, you can use the purchase button, and then the transaction will pop up. You\u2019ll see your purchase price and the gas fees<\/a> involved. Once you confirm, the transaction will be completed and the NFT will be sent to your wallet.<\/p>\n

Buying Art Blocks NFTs On The Secondary Market<\/h3>\n

If you want to purchase something from a collection that\u2019s already reached its iteration limit, you can check to see if there\u2019s something on the secondary market. Many of the Art Blocks tokens are sold on OpenSea<\/a>.Even if something isn\u2019t listed for sale, you can make an offer. Pay attention to the price history, though. In many cases, an owner isn\u2019t likely to sell their NFT artwork to you if you offer less than they paid for it. If you have an OpenSea account and a connected wallet<\/a>, buying the NFT of your choice is as simple as making the offer or completing the purchase. As long as you have enough ether<\/a> in your wallet to cover the purchase price and gas fees, you should be able to carry out the transaction<\/p>\n

Taxes Consequences Of NFTs<\/h2>\n

It\u2019s important to note that there are likely tax consequences<\/a> associated with purchasing (and later selling) Art Blocks NFTs. First of all, whenever you use cryptocurrency to buy something, you create a taxable event. For example, let\u2019s say you bought 10 ether for $500. Now, you\u2019re buying something from an Art Block collection for six ETH. However, ether is now worth closer to $3,000. Your original ETH has a cost basis of $3,000 (6 x $500), but now it\u2019s worth $18,000 (6 x $3,000). You\u2019ve got a capital gain of $15,000.Because you\u2019ve likely held that ETH for more than a year, you\u2019ll probably pay the long-term capital gains rate \u2014 but you\u2019re still paying taxes.Later, if you sell the Art Blocks NFT for more than you bought it for, you\u2019ll be taxed on any potential gain. The IRS hasn\u2019t issued any guidance about NFTs like it has for cryptocurrency. But there’s speculation<\/a> that NFTs will be treated as collectibles and taxed at the appropriate collectible capital gains rate.<\/p>\n

Related<\/strong>: Best Tax Software For Crypto And NFT Traders<\/a><\/p>\n

Pros & Cons Of The Art Blocks Platform<\/h2>\n