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Two NFT experts and a digital artist believe that NFTs have more potential beyond the realm of digital art

In March 2021, the artist Mike Winkelmann, better known as Beeple, sold a non-fungible token (NFT) of his digital artwork at Christie’s auction for a whopping US$69 million. According to the auction house, the sale of the collage titled Everydays: The First 5000 Days catapulted him to rank among the top three most valuable living artists.

Before the sale of Beeple’s artwork, the earliest and most notable use of NFT was CryptoKitties, a virtual cat that can be purchased, collected, bred and sold. One of the most expensive NFTs ever sold was a CryptoKitty called Dragon, which was sold for 600 Ethereums (ETH), estimated at US$1.8 million today.

See also: Red Hong Yi On Why NFTs Are The Future Of Art

Artists in Malaysia have also been quick to catch on to the NFT trend. In August, graffiti artist Katun sold two NFT collections titled Apes Stand Strong and Mystical Fruits for a total of 127.6 ETH, or US$408,000. The combined sale of the pieces makes them the most expensive NFTs sold by a Malaysian artist. Not too long ago, contemporary artist Red Hong Yi sold her piece titled Doge To The Moon in an online auction for 36.3 ETH, which is valued at US$116,000.

Where NFTs Come From

According to Dinis Guarda, a serial entrepreneur who specialises in blockchain, fintech and artificial intelligence: “Originally, NFT was created on the Ethereum blockchain as a way for developers to interact among themselves, but along the way, they discovered NFTs could be used for digital certification.”

Guarda says the sudden explosion in interest around NFTs in late 2020 was unexpected. It’s worth noting that in the first quarter of 2021, NFT sales volume soared to US$2.5 billion.

Matthew Le Merle, co-founder and managing partner of Fifth Era, says an NFT is essentially a modern way of digitising a certificate of ownership. This means you can digitise any type of assets like artworks, collectables, real estate or public shares, and use an NFT to track it and its ownership.

Due to the fact, NFTs are recorded in the blockchain act as a secure, permanent public record of transactions on a digital ledger. The data cannot be altered, and it is totally transparent, unlike ledgers overseen and updated by a bank.

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A Boon For Digital Artists

Digital artist Alvin Koay is also excited about the technology as it has democratised the art world for all artists. Koay, who is also the founder and CEO of MobileApps.com, looks forward to the new possibilities and opportunities that NFTs present to artists that wish to sell their art.

“Before blockchain came about, many artists could not attribute their creations back to themselves. Now, artists can finally take ownership of their creations and find new ways to sell it,” he explains.

Although he prefers to express his art on a physical canvas, Koay has learned to digitise his physical artworks and turn them into NFTs. The self-taught artist says he’s managed to sell a number of his art pieces through blockchain-powered technology.

“There are many creative ways to use NFT to create art, this includes animating your art as a video file and even take portions of your painting and turn it into a 3D model,” he says. Koay cites one of his recent artworks, titled The Hypocrites, as an example, where he took several characters from the piece and made a new collectable NFT series of 3D models.

On top of being able to sell their art digitally, Koay says the most revolutionary feature of NFT is how artists can now earn royalties for their artwork. This is because the smart contract under which the NFT operates can accommodate terms and conditions like stipulating that whenever a sale of artwork occurs, the original artist earns a 10% royalty from the sales price.

More Than Just Art

But beyond the world of art, NFTs can be just about anything. Recent trends show that artists, celebrities and even organisations like Twitter, CNN and the US Space Force have jumped onto the trend.

“If you look at some of the biggest sales in NFTs today, it no longer revolves around the art world,” says Guarda. Instead, sports collectables such as those sold by the National Basketball Association consist of short videos like a slam dunk or a winning moment by a player or team.

Beyond virtual cats, pet rocks and digital works of art, NFTs have legitimate real-world use cases. Guarda cites the potential of NFTs to replace paper certificates, acting as a digital certificate of a house, property or a certificate for a course.

NFTs have even found their way to the luxury goods market. Fashion labels like Louis Vuitton are already using digital certificates to record the origins of each product sold. This includes information about the raw materials of the product, the factory where it was manufactured and the store where it was bought. In addition, fashion conglomerates from Richemont to the Prada Group are also adopting similar practices.

This transparent certification process comes in most useful in marketplaces and e-commerce platforms dedicated to the sale of second-hand luxury products, where NFTs help authenticate that a product is real.

Tips On Buying Your First NFT

Le Merle concurs that NFTs are still not universally accessible to everyone. But the good news is that more banks, payment companies and asset managers are getting in on the trend. “Before we know it, the infrastructure to support NFTs will be universally accessible,” he assures.

So, what if you are interested in investing in NFTs? “Right now, if you are getting into NFTs you would be an early adopter,” says Le Merle. He advises first-time buyers to take the time to familiarise themselves with the market and not rush to invest until they’ve researched it.

Just because someone says an NFT is worth a lot doesn’t mean that’s true and it pays to double-check other sources on the true value of the NFT. “Do it in the spirit of getting educated. Once you know what the market is like and how it works, only then consider investing,” he says.

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