I just read an article on Reuters about a new type of digital asset – known as a non-fungible token (NFT). The digital asset, stored on the blockchain, is a single asset that is one-of-a-kind instead of being reproduced indefinitely online. Or, that is the idea.
Here is the Reuters article.
““Non-fungible” refers to items that cannot be exchanged on a like-for-like basis, as each one is unique – in contrast to “fungible” assets like dollars, stocks or bars of gold.”
This is clearly a new way for artists and investors to value digital artwork. The enormous amount of digital artwork produced is beyond what I can think through this morning but I am regularly in awe by the quality of some digital artwork. When I think about artwork by Picasso that took him an afternoon to paint and it now sells for hundreds of millions of dollars, I can’t help to think that established artists using this token strategy will see similar rewards – in the digital age.
It all comes down to how to protect digital assets when everything is digital. It is increasingly challenging to protect digital assets when more people are savvy in ways to copy and possibly profit from them.
OpenSea, a marketplace for NFTs, said it has seen monthly sales volume grow to $86.3 million so far in February. Wow!