Dmytro Buryak talked about NFT and cryptoart: what it is, why the prices of digital art are increasing

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Today, Ukraine ranks first in Europe and fourth in the world in terms of the adoption index of cryptocurrencies. According to Triple-A, 12.7% of the population or 5.6 million people own cryptocurrency in Ukraine. This year, the crypto world became an official investment method for Ukrainians. On February 17, the Verkhovna Rada adopted a law on the legalization of the virtual assets market in Ukraine. This innovation will allow our and foreign cryptocurrency companies to work legally and contribute to the development of the country’s economy.
Meanwhile, a new direction of virtual investments – NFT – is increasingly being discussed around the world, and the prices for this type of digital art are growing at an unprecedented rate. For example, the total sale of monkey pictures from the Bored Ape Yacht Club collection reached more than $1 billion.

Bored Ape Yacht Club

What are the investment prospects for Ukrainians in this field?

What are NFTs and how did virtual art objects come about?

A token is a unit in which the assets of IT projects are measured. Tokens can be compared to shares on a stock exchange. “Securities substitute” on the virtual exchange gives the right to own assets.
NFT (non-fungible token) is a token that cannot be exchanged. Digital assets can be traded using this new method. These include images, videos, audio recordings, and GIFs. This method is distinguished by the fact that this type of token is unique and it is almost impossible to break it due to the use of blockchain technology.
Blockchain is a decentralized database that is stored on different computers connected to each other over the Internet. This helps to save information. It cannot be deleted or changed. The uniqueness of digital assets is securely protected and belongs to the sole owner who purchased the NFT token.
They sell and buy digital works for the Ethereum currency, in other words – ether.
In 2014, the CEO of a software startup, Anil Dash, came up with a technology that could protect the copyrights of artists in the digital world. NFT gained global popularity when in 2021 the artist Beeple was able to sell the token “Everydays: The First 5000 Days” for $69 million at Christie’s auction.

Everydays: The First 5000 Days

Everydays: The First 5000 Days

The development of the NFT sphere has taken a step further than even its creator himself expected. In addition to artists, world celebrities, brands, gamers, as well as investors who are looking for new ways to invest capital have become interested in this type of crypto-assets.

Reasons for rising digital art prices and how global brands and celebrities are connected to it

According to experts, world stars of show business also contributed to the unprecedented excitement around NFT-assets. On one of the American shows, Paris Hilton and TV presenter Jimmy Fallon competed in front of each other, showing off their collection of bored monkeys. It turned out that the value of the Bored Ape token #599, which the host owns, is $224 thousand, and socialite Paris Hilton, who has been interested in this area of ​​​​investment since 2020, recently released her own digital painting called Iconic crypto queen, which was purchased by an Iranian collector for $1.1 million Another wave of price growth was when one of these pictures was purchased by Justin Bieber at the end of January for $1.3 million (500 ETH).
World stars of show business and sports not only collect, but also speculate and invest in NFT tokens. Four-time NBA champion Shaquille O’Neal purchased a unique picture from the Mutant Ape Yacht Club collection in September 2021 for $14,000, and now its value is estimated at more than $70,000. Rock musician Ozzy Osbourne bought Bored Ape #9939 a few months ago for $359,000.

In addition to the stars of show business, such world brands as Gucci, Balenciaga, Armani, Calvin Klein and others have already started using this technology to confirm the authenticity of their products.
Why should they invest in NFTs? Experts explain this by the fact that global manufacturers are promoting their products in the metaverse, where online players pay significant sums to purchase virtual assets.
According to some data, about $100 billion was spent on the purchase of items in online games in 2021, and the audience in the virtual world is progressive and 46% of them are women, who are a potential target audience for clothing and cosmetics brands.

Where to sell and buy NFT?

Open Sea – the most popular platform. The user pays once upon registration and can list an unlimited number of his works for sale. Due to democratic prices, the site has about 13 million users, which creates a lot of competition among artists.
Binance – a crypto exchange that occupies a leading position in the world. It recently launched its own separate platform to sell NFTs.
Rare – on this site, an artist needs to pay $100 to exhibit his work, so it may not be profitable for novice creators.
It also became known that Instagram is developing its own platform where it will be possible to trade digital works of art.

Investment prospects in NFT for Ukrainians

In Ukraine, the NFT market is slowly but developing. The technology is incomprehensible to a wide audience, and investors are in no rush to make predictions and invest large sums in the relatively young crypto industry of the universe. However, the creativity of Ukrainian digital artists is highly valued in the world, and the creative NFT community is developing at a rapid pace.
Interest in digital art is growing because it is possible to buy and sell assets with the confidence that ownership rights are securely protected in the virtual world. This made this investment quite promising. In addition, NFT technologies are introduced into the so-called “metaworlds”. With the help of unique tokens, a person can confirm the ownership of land and other objects in the virtual world, therefore NFT is called the “currency of the future” and a huge potential is predicted for it.
Nevertheless, there is also the opinion that this investment is risky, has more speculative opportunities and should not be considered as a “long-term investment” yet.
Hanna Varava, an expert at the Ukrainian Startup Fund and the Creative Economy Development Council under the Cabinet of Ministers of Ukraine, believes that the value of an NFT, like most works of art, physical or digital, depends on who is selling it and who is willing to pay for it.
This situation has arisen due to the large number of show business stars who create their own collections and receive a decent profit from sales thanks to their popularity. Hanna Varava recommends considering NFTs as investments in precious metals or works of art.
The co-founder of the NFT startup Art Bay Yuri Sak believes that NFT, like any other type of investment, has a number of risks and a complex ecosystem. Demand has a wave-like nature and can rise sharply and then fall quickly. Nevertheless, Yuri Sak added that the integration of NFT into metauniverses has serious prospects.
According to Pavel Kartashov, director of the Ukrainian Startup Fund, celebrities have “heated up” the NFT investment market, and in this regard, it is now more important not what is being sold, but who is selling it.

Support of the soldiers of the Armed Forces and civilians affected by the Russian invasion from NFT platforms

In March 2022, it became known that the first NFT war museum appeared in Ukraine. You can visit it by following the link https://metahistory.gallery/warline. Its mission is to tell the world about the military operations on the territory of our country, to remember the tragic days, as well as to collect donations to help the Armed Forces.
The essence of the project is that Internet users can get acquainted with all the works of art on the site, but they buy paintings randomly. This means that after clicking on “buy NFT file”, the user does not know exactly which picture he is buying. All proceeds from the sale go to charitable assistance to the soldiers of the Armed Forces.
Also, on the initiative of the Kyiv School of Economics (KSE), the NFT collection, which includes 1 million digital works, appeared. The project is called Mint For Ukraine. It was created by artist and visionary Phil Bossois with the help of artificial intelligence. The collection is based on the ideas of Ukrainian poets, writers and artists and preserves the country’s cultural heritage. The project allows Internet users to create a virtual wallet on the website and make donations in support of Ukraine. The collected money will be used for humanitarian aid and further reconstruction of the country.

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