Non-Fungible Token (NFT) art has made plenty of headlines in recent years, and Blockchain technology is continuing to aid its evolution.
Through its many mechanisms, Blockchain tech is enabling new forms of ownership and investment in both digital and physical art assets thanks in large part to NFTs. Here, we take a look at how this is happening.
Ownership:
Blockchain offers a robustly secure and transparent way of recording ownership of assets. An NFT contains unique metadata which ensures its originality, and thanks to Blockchain’s immutable chain of data a buyer can easily verify a piece of art’s authenticity.
Investment Opportunities:
Fractional ownership of high-value pieces via tokenization lowers barriers to entry thanks to reducing the capital required to invest.
Artist Power:
Smart contracts enable artists to remove intermediaries from the sales process and sell directly to customers, retaining a larger portion of the sale price. They can also set up smart contracts to ensure a royalty each time the artwork is resold.
Enhanced Efficiency:
Blockchain tech allows faster transactions compared to traditional art sales processes, and opens up the artist’s reach to a global customer base.
As with all investments, the digital art market is also exposed to certain risks, and there are also environmental concerns around energy consumption with some networks and their impact when creating new NFTs.
The NFT market is also volatile, and there are still questions around copyright and consumer protection that legal and regulatory frameworks have not yet completely addressed.
The descriptions provided above are all based on publicly available information, and cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include Forbes and ResearchGate. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.