15.03.2022 Finance Luxembourg Tech Trends

NFT, show me the "Monet"

NFTs fame has continued to grow in recent months. NFTs were first seen as a new gold mine before being highly criticised. According to a Financial Times article published on 11 March, the “daily trading volumes on OpenSea, the biggest marketplace for NFTs, have dropped down by 80 per cent to $50mn in March, just a month after they reached a record peak of $248mn in February.” [1]

NFTs: trend that lasts or buzz that fades away?

To answer this question, let’s start with some basics.

What is an NFT?

NFT is a digital asset, standing for Non-Fungible Token. It means that it is unique and cannot be replaced with something else, unlike other cryptocurrencies considered fungible, meaning that they can be traded or exchanged, one for another. For example, one bitcoin is always equal in value to another bitcoin. NFTs shifted the crypto paradigm by making each token unique and irreplaceable.

How do NFTs work?

Put it simply, most NFTs are part of the Ethereum blockchain, although other blockchains support them as well. An NFT is created or “minted” from digital objects that represent tangible and intangible items from art, music, in-game items, and videos.

What’s the point of NFTs?

As a buyer, you can imagine NFT as your “personal art collection”, but instead of having an actual painting or an exclusive music record, you buy a digital file. With your NFT, you get exclusive ownership rights, meaning that NFTs can have only one owner at a time. NFTs’ unique data allows you to verify ownership, transfer tokens between owners and store specific information. For example, an artist can sign their artwork by including their signature in an NFT’s metadata, potentially increasing your artwork’s value. NFTs allow content creators to build a unique opportunity to monetize their art as an artist.

NFT 2.0, at the edge of a new “market frontier.”

The uniqueness and non-duplicate nature of NFTs create, by definition, scarcity and makes these cryptographic assets more valuable. If we have witnessed some turbulence within the market, it is unlikely to say that it is the end of the NFT market, but more likely the edge of a new “market frontier”. In this context, Farvest, creator of the global tech conference ICT Spring, which is taking place in Luxembourg on 30 June and 1 July 2022, has set up an exclusive partnership with Luxembourgish artist Sumo, Metaverse pioneer Mathias Keune, and Luxembourg Fintech Hub, the LHoFT, to offer the event’s participants a unique dive into the world of NFTs. Sumo, who recently designed Luxair’s Boeing 737, will create for this occasion a unique NFT collection called “Beyond Frontiers.” On-site, each participant will be granted a digital character, and they will be able to contemplate physical objects and broadcast them in a virtual exhibition where Sumo’s works will appear in a metaverse universe created by Mathias Keune. The latter recently launched a metaverse for Luxembourg called the Duchy. This partnership between significant players in Luxembourg is meant to democratise the use of these new technologies and demystify the craze around NFTs, showcasing the best insights of a fruitful collaboration between the “digital” and “physical” worlds, echoing one of the central themes of ICT Spring: “Beyond Frontiers.” Discover www.ictspring.com

[1] The great NFT sell-off: has the digital collectibles craze hit its peak? By Financial Times