, 2, 1 and sold – but what? Great attention was paid to the auction of perhaps the most famous NFT of the present day by digital artist Mike Winkelmann, better known as "Beeple", whose work "EVERYDAYS: The First 5000 Days" sold at Christie's for a record-breaking USD 69.3 Mio.
The acronym "NFT" stands for "non-fungible tokens" and these are basically digital assets with unique identification codes and metadata recorded in a blockchain ledger representing the ownership and authenticity of an associated unique tangible or intangible asset. The technical composition of NFTs builds on the buzzword technologies DLT, Blockchain and smart contracts.
As the name suggests, NFTs are characterized by their non-fungible nature. In economic terms, fungibility is the ability of an asset to be exchanged with other individual assets of the same type for the purpose of transacting value. Correspondingly, fungible assets in the same denomination imply the same value and include, for example, gold, a specific security or currency in FIAT/ crypto. Conversely, this means, that NFTs are, by definition, not interchangeable, irreplaceable and unique.
The playground of NFT applications extends over many more possible fields of application. Providing the uniqueness of the underlying asset, almost anything can be represented by an NFT – real art works, real property titles, houses, cars, bottles of wine, as well as digital assets such as images, documents, videos, and tweets.
But watch out for the cat in the sack or the kitties in the wallet - what exactly do NFT holders acquire? Ownership of the original work, its digital representation or both? Also, attention should be paid to potential legal pitfalls in the context of NFT. These cover aspects in relation to, e.g.:
- intellectual property laws;
- licensing laws;
- contract laws;
- financial markets laws;
- anti-money-laundering laws;
- data protection laws;
- tax laws; and
- cross-border laws.
- More information can be found in the brochure.