The Rise of NFTs in the Collectibles Market
Whether it’s vintage baseball cards, limited-edition vinyl toys, antique coins or fine art masterpieces, world of collectors is diverse and multi-faceted. But in recent times, a new celebration of collectibles has arrived. It’s called the Non-Fungible Token (NFT) and is revolutionising the way buyers and collectors perceive a digital medium. It’s changing the very nature of authentication.
Understanding NFTs
NFTs, or Non-Fungible Tokens, are one-of-a-kind digital collectibles with a unique proof of authenticity on a blockchain. Unlike NFTs, a collectible using a traditional medium can refer to a digital or physical item, always ‘backed’ by a foundational item like a card, and collected to gain more value in the future. An item’s ownership is clearly logged in one digital record or entry on an Ethereum blockchain. As such digital records cannot be duplicated, NFTs represent an absolutely perfect medium for digital collectibles.
Impact on Traditional Collectibles
By superimposing NFTs on the case, scale and distribution of digital collectibles, a digital artist can sell collectibles such as paintings to anyone, anywhere in the world without going through galleries or auction houses. A collector can purchase digital art and be confident that the object they buy is indeed theirs, and the ownership is securely kept in a public ledger.
Even more traditional collectibles like sports cards and memorabilia are being tokenised: the NFT can represent a physical item such as a signed football jersey, with an indisputable record of ownership and provenance. The digital certificate makes it much easier to authenticate such items, and also allows for a more open and transparent market as opposed to the murky collectible auctions of yore rife with forgeries.
Benefits for Collectors and Creators
Image by Digital CollabWhat are the benefits of NFTs to the collectibles market? Collectors can own original unique digital items. NFTs create a more open market. Collectors can buy and sell items, without any physical restrictions, from anywhere in the world. The blockchain ledger provides a trustworthy record of an item’s ownership history.
While users can own any of those, creators can sell work as NFTs, cut out the middleman, and earn a much larger proportion of the revenue. And they can include ‘smart contracts’ that pay royalties every time the NFT changes hands, a revenue stream that was impossible with physical goods but is a routine benefit of blockchain ownership.
The Future of NFTs in Collecting
While we cannot say how the NFT market will evolve, its potential in the collecting arena seems wide open. For example, one current innovation is fractional ownership of NFTs (ie, for many people to share ownership of an NFT), which could potentially enable more collectors to enter this market by making a high-value collectible NFT accessible to them.
But so does the NFT space – especially in terms of greenwashing and energy use. The majority of NFTs rely on technologies that are highly energy-intensive, which developers and other stakeholders in the NFT market are working to solve with more sustainable alternatives. Hopefully, these solutions won’t come at the expense of artists whose work is being erased.
To sum up, NFTs are changing the market for collectables through providing a safe and verifiable way to own digital and physical collectables. With the technological developments that are taking place, and overcoming current challenges, it is clear that the NFT collectables market has a lot to grow into, making it a very interesting area to keep an eye on for collectors and investors.
