How NFTs Are Opening Up Newer Business Prospects in The Art World?
Non-Fungible Tokens Are Changing The Game
According to Morgan and Stanley NFTs could grow to a roughly $240 billion market by 2030 thanks to the rapidly developing metaverse, and digital collectibles from luxury brands could make up to 8% of this. According to the report, Luxury-branded NFTs could become a $56 billion market by then. So, what are NFTs and why is there so much buzz around it?
NFT has become Collins Dictionary’s word of the year for 2021 and it describes the word as “a unique digital certificate, registered on a blockchain, which is used to record ownership of an asset such as an artwork or a collectible.”
An NFT or a Non-Fungible Token is the cryptographically secure data of a particular digital file that is preserved on a blockchain. These tokens represent and ensure sole ownership of unique items like art, collectibles, even real estate, through a secured blockchain. Although most blockchains can implement their own versions of NFTs, most NFTs are part of the Ethereum blockchain. NFTs work in a similar manner as bitcoins on a blockchain. But while Bitcoins operate like fungible cash, NFTs function mostly as certificates of ownership for virtual or physical assets or artwork.
The value of traditional artwork is its authenticity. The original Mona Lisa is the real deal. But in the digital world, artworks can be duplicated almost at the click of a button and there is no way to distinguish or even trace the originals. NFTs solve this problem. The artwork can be tokenized and stored on a blockchain clearly identifying the ownership of the same. It seems that NFTs are the future of the business of digital art. In the digital world, while cryptos are the currencies of the future, NFTs are the future of collectibles.
Anybody can tokenize their authentic work, this can be a jpeg, png, gif, mp4, or even a tweet, and sell as an NFT. Twitter CEO Jack Dorsey sold his first-ever tweet, ‘just setting up my twtter,’ for $2.9 million as an NFT in March 2021. In February last year, an animated Gif of a meme of a cat sold for more than $500,000. Christie’s auctioned its first NFT-based work of art for a whopping $69m in March catapulting digital artist Mike Winkelmann aka Beeple among the top three most valuable living artists. The artwork titled Everydays: The First 5000 Days is a digital art collage of 5,000 individual works created each day over a period of about thirteen years is minted as a non-fungible token. This was a momentous event in the world of digital art.
NFTs allow one to buy and sell ownership of unique digital items. This ownership can be tracked on the blockchain. Through smart contracts, NFTs can be programmed to automatically do a set of actions such as giving the artist a commission each time his/her artwork changes ownership. However, it is to be noted that NFT isn’t the image but the cryptographically secure data of its digital file stored on a blockchain. Hence, when one buys an NFT, s/he is essentially buying the bragging rights, rights to display the digital artwork for a stipulated time, and they can resell the rights.
However, the scope of NFTs is far beyond authenticating digital artworks and collectibles. NFTs are being used extensively in gaming — now the players can have actual ownership of the in-game virtual assets; the fashion industry is using NFTs extensively to curb fakes, NFT-based tickets are becoming popular in music, sports, and even fashion events; and the possibilities are endless.
