“While there have been comments by the government and the RBI, and news of a framework being developed for cryptocurrencies—all these do not address NFTs themselves,” adds Ganapathy.
It’s raining non-fungible tokens (NFTs) this year. At the March 11 auction of Christie’s in London this year, an artwork by American artist Mike Winkelmann, also known as Beeple, sold for whopping $69 million. The sale positioned him “among the top three most valuable living artists”, according to the auction house, the other two being Jeff Koons (one of the stainless-steel sculptures in his Rabbit series sold for $91.1 million in 2019) and David Hockney (his Portrait of an Artist sold for $90.3 million in 2018).
Beeple’s work—Everydays: The First 5,000 Days—not only smashed the world record for the most expensive NFT ever sold but also started a global conversation around the way digital collectibles will be traded or acquired going forward.
“NFT is about democratisation of art and additional forms such as photography, installations and digital art—anybody can download the art, but the token belongs to only one person. This is a technological innovation that is likely to see a lot more visibility in creative sectors,” says New York-based Deepanjana Klein, international head of the Department for Contemporary Indian & Southeast Asian Art at Christie’s.
To simply define an NFT, it’s a unique, digital certificate based on cryptocurrency technology called blockchain. It is stored on a blockchain to provide certain ownership rights of a digital asset space. They are described as ‘non-fungible’ as each one of them is unique and of different value. This contrasts with ‘fungible’ assets such as dollars or bitcoins, which are identical and interchangeable.
An NFT is generated (or ‘minted’) using a ‘smart contract’ which is a computer code stored on a blockchain. The NFT includes a few different fields such as the NFT’s unique identifier (typically…
