“There are hundreds of thousands of prints and reproductions of the Mona Lisa, but since they are not the original created by Leonardo they are definitely worth much less. The same principle applies to NFTs: you can copy and paste an image or a video but the original one, digitally signed by the artist, is the one which has value “. In the words of Danny Chu, CEO of the NFT MakersPlace trading platform, we can grasp the meaning of the revolution that this new trend is bringing to the world of digital art. The quality or usability of the good itself on the internet does not matter so much as the satisfaction of being able to claim ownership, as for any material collectable object. As the market evolves, we hope that this system will also serve to protect copyrights and property rights of the very same works.

NFT Rawfish

NFT, what are they?

But what is an NFT? The acronym stands for Non Fungible Token, which is an asset with a unique value that is not interchangeable for another of the same type. The most classic example of a fungible good is money, in fact the same “quantity” of good, even if expressed in different denominations (for example, two five euros bills against a ten euro bill) is perfectly exchangeable, and there will be no loss of value in the transaction. On the contrary, it is impossible to compare the value of a soccer card with one that is the same, but signed by the champion represented on it. Even if the two stickers would otherwise be the same, the signature increases the face value of one of them. In the same way, one could not directly exchange a painting by Monet and one by Picasso, even if of equal value, given the history that each of them has. Each time one of these works is “coined”, a block of information is created, and this will then be the one on which all future transactions will be based. Everything can therefore become an NFT, if in digital support, from Jpegs to tweets (the first tweet in history was sold for more than two million dollars). And, as with all collectables, it is not the quality of the work that decide what an NFT is, but the properties that someone decides to associate with them.

The NFT market

What makes these assets unique is the tokenization process, i.e. the translation of data into a hash file, a binary sequence certified and guaranteed by blockchain technology, through the recording of data on numerous servers around the world, facilitating the transcription of all asset transactions within the network. Once the sequence has been recorded and the token created, only the holder of the relevant license will be able to claim the title of owner of the work. Not necessarily, however, the owner owns the work itself, as much as its metadata. This means that he cannot take advantage of the copyright or commercial exploitation of the work itself. In any case, transactions are made much simpler and now disconnected from many limitations, such as geographical ones.

Until now, it has been practically impossible to determine the economic value of these assets, but with their increasing popularity, over time various models have been created that can “predict” the value of an NFT. One of the most popular at the moment is based on the analysis of three factors:

1) visual characteristics, analyzed through a machine learning process that takes into consideration the main physical characteristics, especially to identify any copy or minimal variations that may affect the value of the original.

2) previous sales of correlated NFTs calculated on the transaction history and sometimes even the “personal” one of the NFT in question (for a collector, a work that has already been owned by a VIP could acquire greater value regardless of the real market value of the same). The volume of previous sales is assumed to represent up to 50% of the value of an NFT.

  1. the popularity of buyers and sellers, this calculated as in the real world, based on the sales history that characterizes each subject.

Rawfish NFT

However, this system is flawed: if the tokens are 100% guaranteed and therefore offer a certain legitimation to the buyer, unfortunately it is not yet possible to check the legitimacy of the creation of the same, that is, there is a risk that someone who is not the artist themselves can create and enter tokens of works that do not belong to them into the market, thus damaging the artist who produced the original work. A vulnerability of no small importance, considering that this technology was born among other things to guarantee artists a monetization of their works, previously difficult in the world of the internet, given the great ease with which most of these can be replicated by anyone, just by pressing copy and paste. The fact is paradoxically made even more worrisome by the fact that every artist has the right in this field to royalties on any future sale of the NFT, and that consequently, the creator of the token could take advantage of the earnings from the work even if he has no right to do so.

Rawfish NFT