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NFTs aim to reshape the art world
Digital tokens tied to artwork expected to gather momentum in Asia
Darryl Yu 1 Oct 2021

Ever heard of “The First 5000 Days”, “CryptoPunk #7523” or “Ocean Front”? While not as famous as da Vinci’s “Mona Lisa” or Picasso’s “Guernica" – or even Jeff Koons’ “kitschy” sculptures or Banksy’s graffiti – these digital artworks are some of the most expensive non-fungible tokens (NFTs) ever sold to date. “The First 5000 Days” by Mike Winkelmann, for example, sold for a record US$69.3 million at a Christie’s auction earlier this year.

Unlike their better-known and well-documented digital asset cousin cryptocurrencies, NFTs are slightly different with the key contrast being that they are unique and distinguishable from other NFTs. NFTs are similar to popular cryptocurrencies Bitcoin and Ethereum as they are all verified on the blockchain and don’t change throughout time.  

Whenever a buyer purchases an NFT, they are actually not buying the artwork itself but rather the verifiable rights to that specific artwork. In most cases, it’s buying a piece of data that points to a server that hosts either an image or a GIF.

Interest in NFTs has grown significantly over the past few years. According to data from Nonfungible.com, the market capitalization of NFTs has increased considerably from just under US$41 million in 2018 to around US$338 million in 2020. Information from Google likewise shows that searches for NFTs have been skyrocketing, with interest mark last month hitting 100 or the peak popularity for the term.

In the Asia-Pacific region, NFTs are likewise gaining the attention of art enthusiasts. At the recent inaugural Digital Art Fair Asia (DAFA) held in Hong Kong, various artists got together to feature and highlight the growing importance of NFTs in the art world.

The event features 200 pieces of digital and NFT art which can be purchased online or at the fair itself. As with all NFT-based art, potential buyers will need to fork out some Ethereum to purchase a piece. According to DAFA staff, interest in NFT art has picked up over the past year as more people appreciate art in the digital world. The Digital Art Fair will be ongoing in Hong Kong for most of October.    

The valuation of a NFT can depend on several factors, from whether an NFT is a first of its kind such as a baseball card collectable or if holding an NFT entitles you to some real-world benefit such as a chance to meet a celebrity or thought leader who minted the NFT.  

Still clearly developing as an industry, the success of NFTs going forward will depend on the people’s awareness and appreciation of the concept – and, probably, also on the perceived quality of the artwork on offer.

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