This is following the 2 most prominent cryptocurrencies, bitcoin and ethereum, reaching their all-time highs this year
by NURUL SUHAIDI / pic by BLOOMBERG
THE digital universe has placed new opportunities witnessing the crypto community creating a new way of valuing art through blockchain technology.
Non-fungible tokens (NFTs), a type of digital token issued on a blockchain, have recently sparked a new conversation about value and creativity in the digital form. It has been used as proof of ownership and authenticity for digital artworks, preserving the exclusivity of the art piece among the creatives.
Luno Malaysia country manager Aaron Tang stated that NFTs use blockchain technology for a similar purpose to bitcoin.
This ensures that ownership of the original item is tracked on the blockchain and provides buyers with proof of ownership. They also use smart contract technology to facilitate the secure sale of the item.
It is unique and cannot be replicated, but can be bought and sold. However, they cannot be swapped because no two NFTs are the same.
“Given that the two most prominent cryptocurrencies, bitcoin and ethereum, have reached all-time highs this year, it makes sense for related technologies like NFTs to gain traction and embed themselves in the ecosystem,” Tang added.
Since the market is still in its early stages, it is impossible to predict how the future of NFTs in Malaysia will pan out. Despite this, a number of Malaysian digital artists have made a name for themselves in the local NFTs’ scene.
For digital artist and VFX & motion graphic director, Kia Hau Lau, there is always an opportunity for those who are ready to embrace the technology.
NFTs are beyond the artwork and has lucrative potential for the community.
“NFTs isn’t just limited to artworks, it has potential for events, digital collectibles and even forms of digital certificates to prove authenticity. I believe it will have its place in Malaysia once cryptocurrencies are more accessible to the mainstream audience,” Lau told The Malaysian Reserve (TMR).
“What really caught my attention about it is the fact that it is a new technology and opens up so many opportunities for artists to build their own self-sustainable brand and career,” he added.
He added that MalaysiaNFT and NFXT are a few of the Malaysian communities that are very approachable and helpful for anyone new to NFTs.
As the value of NFTs rise, others, particularly in the crypto world, are eager to diversify their investment portfolio by purchasing it.
Similar to other investments, Lau shared that evaluating the risk is important because the NFTs are still relatively new.
Treating NFTs as a value-holding investment carries a similar risk as such for the physical art market where collectors or investors will benefit more with knowledge and experience.
“I have collected a few pieces of artwork but for more personal than investment reasons, because those pieces resonate with me and I enjoy having them in my little collection,” he said.
Meanwhile, Tang explained that liquidity is an important issue to consider. For example, how quickly one’s NFTs could be converted into cash. Unlike well-known digital assets like bitcoin and ethereum, which are extremely liquid, NFTs are unique by design. As a result, there is significantly less liquidity.
“For instance, it is much easier to convert bitcoin into Malaysian ringgit — because there’s demand from tens if not hundreds of thousands of Malaysians — than an NFT, which might appeal to only a very small number of people,” he told TMR.
Another factor is price volatility. Although there are instances where investors earned huge and quick returns on NFTs, many investors have been burned because they invested in an NFT project expecting quick profits seeking low demand and even lower prices.
“By better understanding cryptocurrencies and blockchain technology, you will have the necessary knowledge to decide whether NFTs are worthwhile investment opportunities,” he added.
NFT has changed the landscape of digital art. In comparison to the past, it is now easier for digital artists to turn their passion into a sustainable lifestyle and reach a larger audience.
“Besides providing extra income for me to continue creating artwork, NFT also opens up opportunities for me to build my own branding as an artist on an international level,” Lau added.
“Most digital artists are mainly commissioned to work on clients’ projects, but NFT gives us the possibility of selling our own artwork or vision to people who enjoy the art and believe in them.”
“I tend to set my art pieces at a lower starting bid and let the market determine the price via http://tryshowtime.com/neverasleep. That way, they are more accessible to collectors with a wider range of budgets, and also lets the higher bidders decide how much they would like to invest in them,” he added.
While many other NFT platforms have emerged, according to Tang, Luno Malaysia has no plans to launch an NFT marketplace at this time yet and will instead focus on being the safest and easiest place for investors to begin their journey into digital assets.