American artist Mike Winklemann, also known as Beeple, was auctioned as NFT on March 11, 2021, and was sold for $69 million. According to the auction house, he earned the sobriquet of the top three most valuable living artists, the other two being Jeff Koons and David Hockney. Beeple’s work — Everydays: The First 5000 Days — broke the world record of the most expensive NFT ever sold. It paved the way the global collectibles will be traded or acquired in time to come.

NFT democratises art. Anybody can download the art, but the token belongs to only one person. It is a technological innovation.

Digital art has been around for years. It is now that an effective monetisation is possible of such art. Sotheby’s introduced sales of NFTs at the beginning of this decade, and it has witnessed impressive sales.

It should be noted that digital art and NFTs are not superior to traditional art. They are different. Many traditional artists are now creating NFTs. It is an opportunity. NFTs empower artists and protect their ownership, and make a viable secondary market for digital art. While creating NFTs, artists can frame rules regarding licensing, royalties and profit sharing.

Many NFTs are minted so that the artist receives a percentage of the sale, each time it is sold.

At Sotheby’s, NFTs can be attached to physical objects such as traditional paintings to enhance the transfer and proof of ownership and secure the authentication process of physical works.

Every transfer or purchase of an NFT is recorded; it has also access to documentation of ownership history which is non-alterable.

It is necessary to monitor the transactions continuously, and take advantage of the time stamped for the transaction in future.

The creators benefit from NFT accounting. On an asset being sold, the original creator gets a percentage of the sale. The platform gets a small percentage and the current owner gets the remaining revenue. The whole thing has a potential for continuous revenue as the digital assets are bought and sold over time.

NFTs are not governed by any specific regulation in India. Maybe, Indian Contract Act, Securities Contract Regulation Act can govern them. It is a high-risk asset, and the person who acquires it must have high risk tolerance. NFTs could also be treated as commodities.

Rhiti Entertainment runs as its part BeyondLife.club, a curated NFT platform. On November 3, 2021, it revealed most awaited NFT auction of Dr. Harivansh Rai Bachchan’s Madhushala (Hindi) NFT. It surged 1500 per cent as compared to its base price and is currently being sold for close to $480000 ( Rs.3.57crore). Madhushala (English) too attracted huge bids and is currently being bidded for $276000. You can keep your favourite author’s memorabilia or signature for times to come after paying the price. Madhushala has seen a phenomenal response, and so also the other Bachchan NFTs. Rhiti would like to launch NFTs of other stars too.

Non-fungible tokens or NFTs have taken the financial world by storm. Essentially, an NFT is a piece of code (written on a blockchain). This code is associated with something — usually digital or collectible. It could be a photo, music, artwork, a screenshot of Facebook page or even a tweet. As this something is digital, it is easily reproducible.

Imagine somebody creating a digital art work or music or something else. It is then associated with an NFT. A dog is being bathed by a Hollywood heroine . Or this is the first Facebook posting by Zuckerberg who founded Facebook. The next step is to sell the NFT, mostly in cryptocurrency, which too is recorded on a blockchain. NFT and crypto transaction blockchains are not necessarily the same.

The NFT associated with blockchain entry is unique. It can be sold. Every time it is sold, there will be a blockchain entry of the transaction.

People are ready to pay huge sums currently for the rights of owing blockchain entries. An NFT is thus basically worth whatever people are willing to pay. Will an NFT appreciate in value? Or is it just a passing fade?

Is NFT a work of art? If it is, it differs from physical paintings of M.F. Husain. Digital art is easily reproducible. Is it a financial derivative, an option? An option has an underlying asset, say shares, with agreed valuation. An NFTs underlying is indistinguishable from any digital copy.

We are reminded of Tulip mania in the 17th century. People bought tulip bulbs in anticipation of price rise. They paid extravagant prices in anticipation and appeared foolish. They feared that a greater fool may come along and pay even a higher price. It is pure speculation.

Snafu uses artificial intelligence (AI) to sift through several thousand songs each week. It uses a combination of neural networks for sentiment analysis, collaborative filtering and some other deep learning architecture. It has its offices in Los Angeles, Mumbai and Bogota. It was started in March, 2018 and has signed 50 artists across the globe. Raghav Meattle, a Mumbai-based singer-songwriter and Armaan Malik have been signed by Snafu.

It focuses on unreleased music. It identifies talents and tries to market them. An artiste finds the song — collaborator process is slow and random. They blur everything and create a community of artistes and collaborators.

A song writer may have a repertoire of songs. It is all put on a cloud. They would like to match the right song with the right artiste with the help of AI.

Finance is an issue in emerging markets such as India. They will forcast the streaming potential of a song based on projected earning. That will facilitate the financing decision.

Snafu tries to identify rough diamonds from millions of songs. AI has to find a needle from a haystack. They could source talents from social media. A song’s growth is monitored. Its buzz is examined. Its structure is studied. Algorithm ranks the songs on these parameters, and facilitates the prediction of its success.

Snafu is taking on well-established music companies. Another issue — the shift from long-form of music to short form music listening. Hits emerge from short reels.

Other companies such as Musilo, Singapore has developed Hit Potential Algorithm. Warner Music Group bring music piece and an unsigned talent together by using a repertoire tool called Sodatone.