Collectors of digital NFTs see a 'Wild West' market worth the risk

New York

THEY are technology enthusiasts on the hunt for opportunities in the Wild West market surrounding NFTs: the popular certified digital objects that have spawned a new generation of collectors convinced of their huge potential.

Brandon Kang, a 25-year-old videographer from California, started buying NFTs in December, and already owns more than 500. In February he spent US$50,000 for "Reflection," a digital work by electronic music artist Feed Me.

His collection includes digital images of simian heads (Bored Ape), a beverage can and a cube, as well as an animation of a car driving down a road, all of them created by artists little-known by the general public. He displays them on screens in his house and - with few exceptions - has no plans to sell them.

Mr Kang has made believers of some of his friends and family members. "One thing that they thought was cool is the way to verify ownership of these digital NFTs. It is truly a unique experience," he said.

NFTs - non-fungible tokens - are digital objects such as drawings, animations, pieces of music, photos or videos, whose authenticity is confirmed by blockchain technology, preventing forgeries or manipulation.

NFTs have generated nearly US$2.5 billion in sales over the first five months of 2021, based on numbers from the specialised NonFungible website. The big auction houses now regularly sell them, as Sotheby's is doing through June 10 with its "Natively Digital" sale.

The ability to prove the authenticity of NFTs was decisive for Mr Kang, long an investor in cryptocurrencies, which rely on the same blockchain technology. Before, he said, "there was no way to prove and show ownership of digital assets cryptographically."

It was that same guarantee of authenticity that drove Devan Mitchem, a Singapore-based cloud engineer, to begin collecting digital objects, after at first being sceptical because of the "inconsistent formats, marketplaces and storage options".

But the emergence of websites like OpenSea and Nifty Gateway allowed artists to sell their works directly while enabling collectors to buy, store and resell them, making the NFT world almost as accessible as the stock market.

For anyone interested in exploring this new market, Mr Mitchem offers this advice: "Read up on the philosophies behind blockchains like Bitcoin." That should make it clear, he said, that "these are global computers not owned by a single entity."

"It's still very much the Wild West," he said, "but also a land of opportunity."

NFT collectors, many of them computer programmers and most of them men, say they are also drawn by the constant innovation in the market. They foresee a world in which NFTs can move between platforms, sites and virtual universes, unbound by the constraints of the physical world. AFP