NFTs are blockchain-based tokens, and they verify the authenticity and ownership of a digital asset, making the use of NFTs particularly appealing to digital creators who want to ensure the scarcity of their creations.
Professor Xu Jianliang, Head of the Department of Computer Science, says that currently there is no other platform besides the blockchain which can better support NFTs as well as produce the same trusted means of conducting business transactions.
An HKBU computer scientist examines the new trend in the creative market
Non-fungible tokens, or NFTs, have exploded in popularity in the past few years, and they now dominate the digital art market. A minute and a half long scene from Wong Kar-wai's iconic film In the Mood for Love fetched HK$4.28 million at auction last year, making it the first Asian film NFT to be offered for sale by an international auction house. The rising popularity of using NFTs to sell digital work has illustrated the potential of different applications of the technology, and it has also sparked discussions on whether digital assets are worth the value assigned to them, as they can be easily copied or shared online.
A digital certificate of authenticity
NFTs are blockchain-based tokens which are built using the same kind of programming that underpins prominent cryptocurrencies. But unlike fungible assets such as physical money and Bitcoin, one of the most well-known cryptocurrencies, NFTs are unique and therefore they cannot be exchanged or substituted with similar assets.
NFTs live on the blockchain, which serves as a ledger of transactions, and they record encrypted information that can verify the ownership of a digital asset. This allows NFTs to act as a digital certificate of authenticity and ownership of the asset, making the use of NFTs particularly appealing to digital creators who want to ensure the scarcity of their creations.
"One of the benefits of selling digital art as an NFT is that it operates as a different business model," says Professor Xu Jianliang, Head of the Department of Computer Science, who has been leading cutting-edge research projects on blockchain technology. "In the common business models found in the art market, artists rarely profit from the resale of their artworks. With the blockchain underlying NFTs, you can set smart contract terms within it, for example, the artist will get a royalty upon each resale of the artwork. This provides artists with opportunities to benefit from the increase in value of their artworks over time."
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