The NFT phenomenon escalated on a massive scale last year with great media coverage and inspirational success stories, as well as the emergence of several NFT trading platforms. The main beneficiaries of this new technological fashion are people of digital arts and those who have digital possessions that some see as historical value and would like to own officially and eventually, and are willing to pay big money for it.
How has the digital collections market evolved over the year since its sensational launch? Is the market still active and maintaining prices and the volume of its daily operations? And what is its future?
The most important work of art sold in the field is a digital work of art by Pebble that sold for $ 70 million through the famous Christie’s auction, which then accepted cryptocurrencies at its auctions, whether to buy digital or other collections. . Prior to that, there were other properties that sold for several million dollars, which included digital products related to electronic games, and royalties for various songs and logos, and even one of the biggest sales took place last year for $ 2.9 million. to be purchased. The first tweet made by the founder of the Twitter platform at the time of its launch. The platform was purchased in 2006 by a person working in Malaysia in the field of cryptography and blockchain and is of Iranian origin. Weeks ago, the owner of this Twitter post offered it for sale through one of the largest digital collection platforms and set the sale price at $ 48 million and stated that he would donate half the value to charities, but demand more large was in the range of only $ 14,000, compared to $ 2.9 million purchase cost.
The failure to sell the first tweet raised doubts about the feasibility of the phenomenon of owning digital items and whether the whole process was merely a passing fad that would go away over time. Is it really a passing fad?
There has been a decline in the number and volume of purchases made through digital platforms, the largest of which is the Open Sea platform, where daily sales sometimes reach more than $ 100 million, but it has started to fall to around $ 30 million in days. as well as a drop in the average value of a sold asset that has fallen below $ 2,000 per product these days.
Is it a transitional fashion based on the phenomenon of high wealth in recent years and the increase in the volume of liquidity in the hands of investors?
Yes, there is a transitional fashion regarding the volumes of some transactions and the diversity of holdings offered, but at the same time there are real benefits from being able to register ownership of digital holdings in a final, binding and secure manner. This is the reason for the joy of many segments of artists, illustrators and others who have the design, innovative and benevolent skills of heritage and history, as it has become possible to sell or rent their products electronically. The phenomenon of granting absolute ownership of a digital asset is a natural product of great development in the field of blockchain technology, which is the technology on which all cryptocurrencies, such as Bitcoin and Ethereum, are based. The idea of giving undisputed ownership of digital products without relying on a central authority, whether governmental or non-governmental, began to take on a serious and practical nature from the beginning of cryptocurrencies, but gained rapid fame last year as a result. of a series of large announced sales boxes, which opened the door wide.For marketing this type of digital collections.
The attractiveness of this technology comes in that it allows agreement on the truth of something, for example, this person owns a bitcoin number, or that this person has sent ten pieces of “Ether” to another person, or that this person has the tweet the first to land on the Twitter platform, or that someone else owns the artwork that was drawn by artist Doe. The truth is that the value of artistic and historical products, whether digital or non-digital, and the prices paid for their purchase, are not due to the buyer’s need to see and enjoy the work of art, but mainly due to a sensation. of power, influence, love of boasting and self-affirmation, and some people find this in mastering these things. . There are those who bought collections worth millions of dollars, and then donated them to one of the famous museums, showing that they are among his fortunes. It is this human feeling among some that has paved the way for the use of encryption techniques to eventually give ownership to those who buy a digital asset, or even a non-digital one, from the real owner, and then register ownership in it. . name.
Unique properties are heterogeneous things, and this is different from homogeneous things that are called interchangeable in financial markets, i.e.: all units of the item are identical, so the rial bill in your pocket is exactly the same as the rial bill in your pocket your. pocket, or Sen’s share is identical to any other stock for the same company, or that one Bitcoin is identical to any other Bitcoin. But unique digital collections are not homogeneous, so each product is different, has a different price, and has a different value.
The concept of homogeneity is very important for the functioning of commodity and financial markets, because the matching of traded units facilitates the process of pricing and trading. Compare with the rest of the markets e.g. identical, even if they are in the same real estate scheme, neither the used cars are identical, nor the agricultural products are homogeneous and they differ. the same brand, color and type, are largely identical. So the pricing of unique things is hard and that is what makes commodity exchanges set the exact specifications to be able to trade products that do not match, which is finally addressed through blockchain and cryptography.
The first to address the idea of this discrepancy and insert it into the blockchain is the Ethereum currency, which competes with Bitcoin, creating a sophisticated mechanism for what is known as smart contracts, where data and scripts were added. operations that take place in the blockchain to maximize the benefit of the infrastructure in the blockchain, rather than limiting it to cryptocurrencies.
The trade in digital collections will remain and grow in importance in the future, not necessarily in the ability to sell all kinds of products, but rather in being a technically controlled method through which digital and non-digital possessions can to be registered in names. of their owners, where there is no room for conflict in the reality of ownership and no place to deny this property. Despite this, digital fraud occurred last year with more than $ 14 billion, some of it in the field of unique collections, and the reasons are often due to negligence by some unique collection platforms in not verifying traditional ownership before transferring its in digital. ownership, in addition to the usual hacks and engineering-based frauds.
Quoted from Al-Ektisadiah