This exploratory applied study examines the nature and dimensions of cryptocurrency, namely bitcoin, a peer-to-peer network for facilitating digital barter. As the most widely used cryptocurrency, bitcoin has carved itself a niche market while also promoting the use of other cryptocurrencies. Through descriptive analysis and a visual analytic approach, the study highlights key characteristics and dimensions of bitcoin. The study helps understand the nature and extent of bitcoin use, assisting policymakers to shape and regulate the cryptocurrency marketplace in this contemporary volatile environment.
The market for non-fungible token (NFT) art is expected to reach USD 44.2 billion in 2021 and increase by 67.57 percent in 2022, revolutionizing the relationship between artists, collectors, and investors. Despite this, concerns regarding the environmental impact of blockchain technologyâs high energy consumption persist. NFT art transactions will continue to generate significant carbon emissions after Ethereumâs âMergeâ to a Proof-of-Stake (PoS) system in September 2022, rendering many low-carbon solutions obsolete and necessitating further research into post-Merge alternatives. This study identifies solutions in the NFT art market, such as carbon neutrality, lazy minting, alternative consensus mechanisms, Layer 2 solutions and policy interventions. Carbon neutrality is achieved through investments in renewable energy or carbon credits to mitigate emissions generated by NFT art transactions. Lazy minting reduces energy consumption by postponing the creation of NFT art until a buyer is secured. In the NFT art ecosystem, alternative consensus mechanisms such as Proof of Authority (PoA) and Proof of Spacetime (PoST) reduce energy consumption. By offloading transactions from the primary blockchain, Layer 2 solutions enhance scalability and reduce energy consumption. Carbon taxes and energy consumption levies are examples of policy interventions that promote cleaner energy sources in the NFT art market. This study will explore the role of artists, collectors, galleries, and other significant players in encouraging environmentally sustainable practices in the NFT art market. In addition, it will investigate the effect of prominent NFT art sales on carbon emissions and the adoption of eco-friendly alternatives. By integrating and optimizing current carbon reduction strategies, the NFT art market can continue to flourish while reducing its environmental impact. The study emphasizes the significance of implementing a comprehensive strategy that incorporates multiple solutions that are tailored to the specific challenges of the NFT art market.
This article is about the role of cryptocurrencies, for example, decentralized autonomous organisations (DAOs) and non-fungible tokens (NFTs), in the international art market. These are cryptocurrencies which can be used to work with local governments to deliver non-state-funded consultancy in, for example, funding bid writing or community risk assessment. Self-polycentric and cause-based DAOs typically focus on actively listening to their token owners, utilizing the groupâs skills under a transparent incentive structure fostering trust. This article delivers a critical evaluation of DAOs as an organisational management structure and business operations vehicle. This evaluation considers DAOsâ utility in supplying goods and services, through the critical lens of facilitating the international art market. The objective of this article is to raise wider awareness and understanding of DAOs as a legal entity. This paper acts to introduce the uninitiated to the business, societal value and legal uncertainties of DAOs and NFTs. DAOs are internet-based organisations built upon a set of instructions presented in and controlled by a computer programme, i.e., a smart contract. Effectively, DAOs are an artificial, electronic, online, digital technology entity, with no physical form.
The adoption of non-fungible tokens (NFTs) has revolutionized digital art transactions, providing artists with unprecedented opportunities to tokenize and monetize their generative creations, leading to increased scrutiny and demand within blockchain-oriented marketplaces. The pricing of NFT artworks, however, exhibits substantial variations within and across collections, influenced by various factors. This study aims to investigate the relationship between visual features and pricing, shedding light on the variations underlying the pricing of NFTs. First, measures of both computational aesthetics and visual complexity were applied to extract multi-faceted visual aesthetic features, encompassing aesthetic factors such as color and composition as well as complexity factors like entropy. Second, with extracted visual aesthetic features and preprocessed price data, the study proceeds to conduct correlation analysis within collections and statistical modeling across collections. Through these approaches, we reveal a moderate correlation between visual features and prices within collections, while also identifying different influential visual features across collections. The differential performance of price models highlights the distinctiveness and unique pricing characteristics of NFT collections.
Purpose Given the cryptocurrency market boom in recent years, this study aims to identify the factors influencing cryptocurrency pricing and the major gaps for future research. Design/methodology/approach A systematic literature review was undertaken. Three databases, Scopus, Web of Science and EBSCOhost, were used for this review. The final analysis comprised 88 articles that met the eligibility criteria. Findings The influential factors were identified and categorized as supply and demand, technology, economics, market volatility, investorsâ attributes and social media. This review provides a comprehensive and consolidated view of cryptocurrency pricing and maps the significant influential factors. Originality/value This paper is the first to systematically and comprehensively review the relevant literature on cryptocurrency to identify the factors of pricing fluctuation. This research contributes to cryptocurrency research as well as to consumer behaviors and marketing discipline in broad.
Since 2021, non-fungible tokens (NFTs) have been a popular topic which has kindled the interest of art and technology enthusiasts and professionals. Some had very high expectations for the potential of NFTs, and in some cases, made an assessment for NFTs that go beyond the existing limits of NFTs. There have also been others who approached NFTs suspiciously and in some cases, described them as a hoax. The purpose of this study is to examine the important effects of NFTs on the art world and art law, and to consider NFTsâ current and potential impacts. In this context, this article first provides an introduction to NFTs and why the author finds it interesting to think about legal issues surrounding NFTs. After providing definitions of non-fungible tokens and highlighting technical aspects of NFTs, the article then discusses select legal issues surrounding NFTs, such as the importance of legal terms and conditions of an NFT purchase, legal qualifications of NFTs, artwork ownership, artwork authenticity, artwork provenance and intermediary liability for NFT sales. One of the aims of this study is to put forward clearly what should be expected of non-fungible tokens and their potential. Another objective is to underline the fact that the unique dynamics of the art world necessitate having a unique perspective for legal matters relating to them, which is satisfied with art law and its professionals. Ultimately, this paper aims to contribute to having a more comprehensive understanding of non-fungible tokens and their impact on the art world and surrounding legal questions.
A non-fungible token is a digital unit of accounting, with the help of which a digital impression is created for any unique physical item or object, including a digital one, for subsequent performance of various types of transactions, including transactions within a closed blockchain system. The development of digital technologies, including NFT, poses many questions to the researchers. The author of this article conducts a comparative analysis of digital objects and NFT, considers the problems regarding NFT and copyright to the works of fine art, the transition of the right to NFT and the transfer of copyright, possible violations of copyrights using NFT, etc. The need and feasibility of changing the current legislation is assessed.
Non-fungible tokens are a revolutionary concept that combines art, authenticity, proof of ownership and enables large-scale commerce. Their value does not come from their use in financial transactions, but from the fact that they are linked to specific assets, whether digital or real. Non-fungible tokens thus represent a new driving force in the areas of digital ownership. Owners of these tokens can earn huge sums at a time when the art market is on the verge of revolution. The non-fungible token market experienced enormous growth in 2021 with traders investing a huge amounts of billions of dollars worth of cryptocurrencies into digital collectibles. Since 2021 the transaction activity in this area cooled, although the number of active investors continued to grow in 2022. While the popularity of certain non-fungible token collectibles can fluctuate depending on market conditions, some traders may try to manipulate the prices of certain non-fungible tokens to make them appear more valuable. The token will be sold at a higher price to a new wallet, which is also controlled by the original owner. Transactions between wallet addresses are saved on a blockchain and can be accessed publicly, so that anyone can see when the token was traded and for how much it was sold. However, wallet addresses contain no identifying information making it very difficult to discern who is behind a transaction and whether two addresses are owned by the same individual. This process is called wash trading and its analysis is a goal of this contribution.
Jan Schwiderowski, Asger Balle Pedersen, Jonas Kasper Jensen, Roman Beck
Abstract Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially, non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance, in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholdersâ different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFTâs value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.
The study investigates the relationship between the returns of Non-Fungible Tokens (NFT) and its categories; and fear indices during times of crisis. The fear indices considered are Global Fear Index (GFI), Global Economic Policy Uncertainty Index (GEPU), Twitter based Economic Uncertainty Index (TEU), Global Consumer Confidence Index (CCI), Infectious Diseases Equity Market Volatility Index (IDEMV) and Crypto Volatility Index (CVI). Employing Granger Causality Test, Autoregressive Distributed Lag technique and ARDL Bounds test on data for the period starting 1st February 2020 and ending 28th February 2022, it is found that short run association exists between TEU, CVI and NFT returns. Further, GFI leads NFT Art returns while TEU leads NFT Metaverse returns by lag 5 and lag 2 respectively. No association between fear metrics and NFT Collectible, NFT Game and NFT utility is observed. No long run association in found between NFT returns and fear indices except TEU which influences NFT returns. It is concluded that NFT, NFT Art and NFT Metaverse returns have positive association to at least one fear index during times of turmoil, especially for the short run.
D. C. Jain, Megh Dedhia, Jinay Parekh, Kiran Bhowmick
Non-Fungible Tokens (NFTs) have emerged as a popular form of digital asset ownership and trading on Web 3.0. In particular, generative NFT art collections such as Cryp-toPunks, Bored Ape Yacht Club, Mutant Ape Yacht Club, and others have seen significant hype and monetary value, with some individual NFTs selling for millions of dollars. With such high stakes involved, it is critical for NFT collectors and those interested in starting their own collections to have access to reliable and comprehensive data analysis tools that can help them make informed decisions. This research paper presents a data extraction and analysis tool for generative NFT art collections that aims to address this need. The tool leverages publicly available data from blockchain ledgers to scrape and extract information on various collections, including details such as ownership, transaction history, rarity, and more. The extracted data is then transformed from an unstructured to a structured format and analyzed using various statistical and machine-learning techniques to identify patterns, trends, and insights. Through the use of this tool, NFT collectors and individuals interested in starting their own collections can gain valuable insights into the performance and value of different generative NFT art collections over time. For example, the tool can help users identify which collections have experienced the highest growth in value, which NFTs within a collection are the most valuable, and which collections are most likely to increase in value in the future. Overall, this research paper presents a comprehensive data extraction and analysis tool for generative NFT art collections. By enabling users to conduct better research and make more informed decisions, the tool has the potential to increase the success and profitability of NFT collectors and those interested in starting their own collections in rapidly evolving NFT markets.
The emergence of non-fungible tokens (NFTs) has created a new market with significant implications for stakeholders, particularly in industries such as art, fashion, gaming, and real-world assets, leading to challenges in finance, financial pricing, financial management, risk management, and cryptocurrency issues. This research paper adopts a quantitative approach to provide a comprehensive analysis of the challenges associated with NFTs, including their impact on the art market, risks related to ownership rights, and proper financial statement treatment. Additionally, the paper examines the challenges of accounting for NFTs under the International Financial Reporting Standards (IFRS), including valuation, tax treatment, and accounting considerations. The use of artificial intelligence (AI) in creating, verifying, and authenticating NFTs, as well as detecting potential fraud and valuing them in the market, is also discussed. Finally, the paper provides recommendations for companies and accounting professionals on addressing the challenges associated with NFTs under IFRS. The research contributes to the ongoing debate on the best practices for NFT accounting, the evolving nature of digital assets, and the role of AI in this emerging market.
Abstract While most influential in art markets, the non-fungible token (NFT) phenomenon also has serious ramifications for museums and other cultural institutions. This chapter explores these applications to core nonprofit missions and activities, including audience development, fundraising, earned-income generation, acquisitions, and institutionsâ relationships with their communities. Any initiative involving NFTs at a museum is also an exercise in strategic planning. We develop a novel conceptual framework around mapping institutionsâ financial and philosophical priorities to guide strategic planning around NFTs. We present this framework through five case studies that range from existing museum projects around revenue generation, conservation, and endowment to two hypothetical scenarios around deaccessioning, restitution, and institutionsâ relationships with their audiences. Cultural institutions apart from museums may also find the framework valuable and worth incorporating into their strategic planning processes, as it can be tailored to an organizationâs individual priorities, artistic missions, and financial needs.
Sze Wing Wong, Mimi Mei Wa Chan, Dickson K.W. Chiu
The most popular uses of blockchain technology in the art market are related to non-fungible tokens (NFTs). This chapter explores the adoption of NFT in the digital art market and its future development. The authors explore NFT adoption in the digital art market with the five pillars of the digital entrepreneurship model, including knowledge base, business environment, finance, technology, and culture. Their scarcity and utilities determine the value of NFTs. Collectors and artists should also be aware of the benefits and drawbacks of blockchain technology and take appropriate steps to guarantee their rights are protected. This chapter provides a fundamental review of the current development and outlook of NFT and opens new opportunities for future study. Scant research focuses on the present condition and adoption of NFTs within the Hong Kong digital art market. This review offers a much-needed exploration and understanding, particularly beneficial for potential investors and participants seeking a comprehensive insight into NFT adoption.
Art advisors are usually engaged by collectors to help them assemble their collection. In that role they may accompany their clients to galleries, artistsâ studios, and especially art fairs. Art advisors can be self-standing firms. Gallerists, however, will also often take of this role for clients who trust their advice and judgment. The phenomenon that art can accrue value over time forms one of the foundational premises of an art market. Very much simultaneous with the art worldâs pivot from the physical to the virtual during the COVID pandemic, the disruptive technology of Non-Fungible Tokens (NFTs) emerged quite suddenly in early 2021. Kickbackâa payment received by the agent of a commercial transaction from a supplier, usually in compensation for the agent having facilitated their clientâs business with the supplier. All blockchain transactions incur a gas fee including minting of NFTs.
Blockchain technology has brought notable advancements to diverse industries. The introduction of non-fungible tokens (NFTs) has particularly led to a lucrative market for unique digital asset ownership verification, including digital artworks. However, this trend has also given rise to concerns such as fraud, stolen works, authenticity, and copyright issues. Illicit traders exploit the market by trading unauthorized copies of digital objects as NFTs. In this study, we propose the use of digital watermarking as a means to establish the authenticity of NFTs and enhance the marketplaceâs credibility.
Open access
Advanced Steganography and Watermarking Techniques
The rise of non-fungible tokens (NFTs) has been astonishing, in particular for the arts and creative industries. The dominant discourse both in mainstream media and in academia today focuses predominantly on what this new technology can do for the art market rather than art itself. However, framing NFTs in art in the context of money and markets draws attention away from the more subtle and creative role of NFTs. Consequently, this article asks: What is the role of NFTs in art, beyond the market? This research complements existing empirical work, by conducting a case study and interviews with members of DADA, a historic NFT art project which is particularly critical towards the role of the art market. The findings foregrounded five roles that NFTs play in art: as (1) a tool for systemic change, (2) a new way to community, (3) a ritual artefact, (4) a means for preservation and (5) a new medium.
Cryptocurrencies have attracted extensive attention from malicious actors. Numerous studies have reported various cyber attacks and scams targeting this domain. This paper takes the first step to characterize the visual scams occurring within cryptocurrency wallets. Scammers exploit deceptive visual features â specifically, the omission of detailed information on the walletâs interface such as wallet addresses, cryptocurrency tokens, and smart contract names, to confuse or mislead users. This could potentially lead users to carry out unintended transactions. By analyzing 169,680,580 transactions between December 2022 and May 2023, we identified 5,515,896 instances of fake token scams, 15,807 instances of function name scams, and 89,681,248 instances of zero transfer scams. Our analysis reveals that over 240,000 victims have been affected by these visual scam attacks, resulting in losses exceeding $43 million. These substantial figures emphasize the severity of these deceptive tactics and underline the urgent need for effective protective measures.
Purpose : The study concentrated on identifying several use cases for NFTs and analyzing their potential for creators in the marketplace. The purpose of this paper was to provide a foundational understanding of NFTs and their market applications. The current global market capitalization of NFTs is $40 billion, which is approaching the $50 billion global market capitalization of art. In India, Bollywood artists and athletes have their own NFT marketplaces to sell their merchandise. Methodology : The paper conceptually analyzed the use cases of NFTs and their market potential while emphasizing some trading-related issues. As the concept of NFTs is still in its infancy, there is a severe lack of research on NFT use cases. This paper attempted to resolve the lack of research in this field. Findings : NFT has the potential to create new opportunities for a creative market that has been hampered by a variety of factors related to issues of authentic ownership. NFTs enable artists to sell their products directly to all consumers. No matter how frequently an asset is transferred, NFTs provide secure transactions recorded on the blockchain. Due to the instantaneous global commerce of digital products, barriers no longer exist between artists and collectors. Creators may be eligible for royalties based on a percentage of future sales of their NFT artwork, depending on the terms of the licensing agreement. Practical Implications : NFTs have the ability to destabilize economies, cultures, and society as a whole. As with any new technology, NFTs have enabled the introduction of a new business model. Since there is no specific legal framework for NFTs in India, they are governed by contract lawâs fundamental principles. Until cryptocurrencies are formally sanctioned, it is premature to estimate the impact of NFTs under the current circumstances. Originality : In contrast to previous research on NFTs, the current work expands upon conceptualizing NFTs and analyzes their market applications and issues.
Non-fungible tokens(NFTs) are on the rise. They can represent artworks exhibited for marketing purposes on webpages of companies or online stores -- analogously to physical artworks. Lending of NFTs is an attractive form of passive income for owners but comes with risks (e.g., items are not returned) and costs for escrow agents. Similarly, renters have difficulties in anticipating the impact of artworks, e.g., how spectators of NFTs perceive them. To address these challenges, we introduce an NFT rental solution based on a pay-per-like pricing model using blockchain technology, i.e., smart contracts based on the Ethereum chain. We find that blockchain solutions enjoy many advantages also reported for other applications, but interestingly, we also observe dark sides of (large) blockchain fees. Blockchain solutions appear unfair to niche artists and potentially hamper cultural diversity. Furthermore, a trust-cost tradeoff arises to handle fraud caused by manipulation from parties outside the blockchain. All code for the solution is publicly available at: https://github.com/asopi/rental-project
Andreia Nogueira, CÊlio Gonçalo Marques, António Manso, Paula Almeida
This research contributes to the discussion around the importance of the long-term preservation of non-fungible tokens (NFTs) and minted digital artworks. The paper is based on a review of the literature on blockchain in art and heritage management and conservation, with particular attention to references related to the production, marketing, maintenance, and distribution of NFT-based digital art. The aims of this paper involve anticipating potential problems in the oversight of NFTs and setting out good long-term management principles and practices as well as specific preservation strategies. Despite the fact that it also discusses issues over authorship, copyright, creative commons, and open access, the paper is particularly devoted to raising concerns about the high energy consumption associated with blockchain technology and its impact on climate change. It also highlights how the preservation of NFTs cannot be neglected, despite the belief that they last forever. Most studies dedicated to analysing the impact of blockchain technology on the cultural heritage sector ignore the most important issue: preserving not only the minted digital artworks themselves but also the respective blockchain networks. Overall, this paper seeks to foster a collective awareness of the need to reflect on blockchain-related art practices and their implications for the long-term protection of cultural property.
As CryptoPunks pioneers the innovation of non-fungible tokens (NFTs) in AI and art, the valuation mechanics of NFTs has become a trending topic. Earlier research identifies the impact of ethics and society on the price prediction of CryptoPunks. Since the booming year of the NFT market in 2021, the discussion of CryptoPunks has propagated on social media. Still, existing literature hasn't considered the social sentiment factors after the historical turning point on NFT valuation. In this paper, we study how sentiments in social media, together with gender and skin tone, contribute to NFT valuations by an empirical analysis of social media, blockchain, and crypto exchange data. We evidence social sentiments as a significant contributor to the price prediction of CryptoPunks. Furthermore, we document structure changes in the valuation mechanics before and after 2021. Although people's attitudes towards Cryptopunks are primarily positive, our findings reflect imbalances in transaction activities and pricing based on gender and skin tone. Our result is consistent and robust, controlling for the rarity of an NFT based on the set of human-readable attributes, including gender and skin tone. Our research contributes to the interdisciplinary study at the intersection of AI, Ethics, and Society, focusing on the ecosystem of decentralized AI or blockchain. We provide our data and code for replicability as open access on GitHub.
Financial inclusion is regarded as one of the most important paths toward gender equality. This seems particularly true from the perspective of innovative technology adoption. However, while cryptocurrency, a major fin-tech product, is a potential instrument to accelerate financial inclusion, previous research on its usage among women remains very limited. Compared to women, men are more likely to own and trade cryptocurrencies, as well as to work in the blockchain and digital asset industries. In developing and emerging economies characterized by the lack of access to education and financial resources, as well as by cultural and societal biases, these disparities may get even more pronounced. In this context, the chapter provides an initial assessment of gender disparities in cryptocurrency usage, with a particular emphasis on developing and emerging economies. Among other recommendations to address the gender gap in the cryptocurrency industry, it is important to increase women's education and awareness about cryptocurrency and to promote diversity and inclusion in the industry. It is also equally important to tell the story of women making strides in the industry and their related contextual solutions in order to address societal and cultural biases.