Friday, May 10, 2024

The Value of NFTs: Ensuring Authenticity in Collectibles, Art and Antiques

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Dominik Nawracaj

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The Value of NFTs: Ensuring Authenticity in Collectibles, Art and Antiques

NFTs world

NFTs in the service of art.
The use of NFT in art is driven by people's attachment to "original work" and its "legend," i.e., the nimbus accompanying it. The fact that the original cannot be distinguished from its copy has always been a problem for art. It seems that this problem has existed in artistic works, for example, through the use of engraving techniques, before the Digital Age.
With the use of this process, the artist was able to produce any number of exact duplicates of the same piece; therefore, to guarantee the worth of each copy, they started to be numbered and signed (forming a sort of "analog" NFT). More recently, Andy Warhol's Factory made this style of art distribution prominent in the 1970s and 1980s.
https://en.wikipedia.org/wiki/Shot_Marilyns

This issue is exacerbated in the case of digital art, where anyone who has mastered the relatively simple task of copying files on a computer can create a replica of a digital piece, in addition to the original artist.
The concept of "numbering and signing" is currently being transferred to blockchain via NFTs. They are much safer than the analog NFTs stated above since they are encrypted using cryptographic techniques. We no longer have to accept the creator's word that he has not released more copies than he promised because everything that occurs on the blockchain is public. Because they may be quickly exchanged over great distances on the Internet, blockchain NFTs are also simpler to monetize and have a lot of utility.
In real life, a work of art is produced by the artist as a digital image and posted online. Anyone with an Internet connection can reproduce this image, print it off, and put it on their wall at home, for example. Only information about the image's owner is stored on the blockchain. The original owner of this piece is the one who sells it, though. A "virtual deed of ownership" may also contain obligations; for instance, it can stipulate that its creator must consistently pay "royalties" to keep it operating.
At least, this is how NFT supporters see things. It works as long as enough people think it works, as I have stated. Thus, everything here is a question of agreement. Technically, the author of the work may, for instance, resell it by establishing a new contract on this or another blockchain. The public will then understand that this new copy is not the only original copy of the work, though. Although the future is uncertain at this point, it's feasible that new internet methods of producing and exchanging items will be covered by legal laws.

NFTs are in the service of the antique market.
To draw in younger, more tech-savvy customers, antique dealers are employing blockchain technology to generate non-fungible tokens (NFTs) for historic antiques. Dealers turned to new technology to spark interest among potential customers who spend more time online, while physical events were postponed and lockdowns affected sales at art galleries.
For instance, in December, Imperial Arts auctioned off NFTs linked to Napoleon Bonaparte's items, each of which granted immediate ownership of the actual items.
The NFT also grants permission to view the swords, which are kept in a gallery-owned safe. Based on the value of the cryptocurrency on Wednesday afternoon, the starting price of the NFTs is half an ether, or around US$1,240. However, every time a new token in the batch is sold, the price increases by 5%, possibly causing FOMO (fear of missing out)  to increase demand. According to Warren Cheng, the founder of Wui Po Kok Antique, NFTs have attracted a new generation of younger purchasers in their 20s who are interested in the history associated with antiques, even though the blockchain has value in proving the authenticity of an artwork.
In 2020, overall sales in the global art market were $50.1 billion, down 22% from 2019, according to a report by UBS and Art Basel. Additionally, some buyers are prepared to make offers on NFTs that are disconnected from the actual items. For instance, New Old Stock, a project by four antique watch enthusiasts, will release its initial batch of NFTs in the metaverse in February and will include watches from companies like Rolex. According to consultant Quinton Ng, who also owns a vintage watch store in Hong Kong, the project aspires to replicate the community of vintage watch collectors in the metaverse.


NFTs in the service of counterfeit fighting.
In the very extensive and diversified collectibles market, forgeries always arise after an item becomes precious and collectible.
Nobody likes to leave a valuation knowing that the collectibles they spent hundreds of dollars on are essentially worthless. However, it can be challenging to authenticate collector objects, such as jerseys and purses that have been autographed.
That is a concern for everyone who wants security for their possessions, but it is particularly troublesome for upstream owners who may wish to resell what they have.
On top of that, blockchain is the ideal instrument for both authenticating an item and archiving its vital narrative.
A great example of using blockchain to deliver proof of authenticity is shown in the article attached at https://medium.com/@SamRadOfficial/why-blockchain-will-change-the-collectibles-landscape-its-more-than-authentication-cc7bd43f008d site:
“Let’s say you go to the NBA finals and purchase a game-worn jersey of your favorite player.
If the company selling the jersey used blockchain to authenticate it, you could get far more than just a jersey.
For example, the company might have decided to send a representative to the NBA finals to take a picture of the player wearing the jersey. And after the game, they also got a picture of the player signing the jersey. Maybe they even put together a video montage of the player’s performance in that game.
All of that media and information can be linked to the item on the blockchain.
So, when someone buys the jersey from the company, they don’t just get the jersey — they get a timeline of the life of the jersey and the backstory behind it.”

The history of an item is frequently more than simply a lovely addition; it influences the item's worth and price.
Especially if antiques, art, or collectible items (weapons, comics, etc.) come into consideration, every piece of such an item has some form of history, which makes it challenging for the salesperson to negotiate a lower price. It makes you wonder if the collectible truly originated from an authorized antique or collectible shop or if the owner just happened to stumble upon it by the side of the road or in the basement.


Resources:
https://ideas-ncbr.pl/en/blockchain-and-nfts-what-do-they-have-to-do-with-art/
https://www.chineseantiques.co.uk/blockchain-enabled-nfts-rejuvenate-antiques-market-attracting-young-collectors/
https://filipniziol.medium.com/blockchain-nft-for-real-world-numismatics-881ab3ab8435
https://bithub.pl/inwestycje/sztuka/blockchain-zmienia-rynek-sztuki/
https://www.catawiki.com/pl/

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