Are the days of auction houses and gavels becoming a figment of the past? With the rise of NFTs and encouraged investment in digital assets, what will the future of object value look like, when we own everything on our phones?
This year, the NFT boom drastically diversified the definition of ownership. Using the blockchain to create a novel art scene, the non-fungible tokens roused confusion at their unexpected arrival given their crypto-existence. In essence, they occupy the role of a digital file of data that refers to a commodity, be it a painting, a GIF, a video, a piece of music or virtual avatars. Someone can own it, and while it might be available for the many eyes of the internet to view and download, only one copy of that NFT exists.
An alternative investment opportunity
The future of digital property has spawned new life online with the craze of NFTs that kickstarted last December when Beeple, an American digital artist Michael Winkelmann sold a selection of artworks for over $3.5 million. Naturally, the internet had something to say about it, but it wasn’t long before you could actually buy a slice of the internet and people wanted in, for $5.4 million, to be exact. Pitched as a milestone for digital art collecting, Christie’s – the British auction house founded in 1766 and steeped in heritage – recognised that the duplication of art has made it notoriously difficult to “assign provenance and value to the medium.” Thus, the recent introduction of NFTs has allowed collectors and artists to ascertain the rightful ownership and authenticity of artwork.
The impact of NFTs on the cultural economy has been colossal, and while no one quite knows the longevity of this rush, the stock market continues to expand, and by result, integrate with the digital domain, for people to invest their money in culture. Offering alternative investment opportunities, Otis is determined to deconstruct the barriers of investment. “These asset classes have long been part of the investment portfolios of ultra-high-net-worth individuals, but now can be accessible to the everyday investor,” shares the founder, Michael Karnjanaprakorn.
Breaking down the barriers between auctioning and affordability
A platform to buy and sell shares of collectibles, and art, Otis is a mobile app, created in 2018 to bring artistic expenditure to all, not just for the financial elite. Devised to create fractional shares, users can view their portfolio and stay informed on the latest news and pricing at any given moment in time, via the app with option for potential return. Otis is available to both accredited and non-accredited investors. Since the rise of the NFT, traditional market trading has become more varied, with sneakers owned by Kanye West the new Picasso painting.
The emphasis on fractional ownership, whereby a company purchases a particular asset and breaks it down into shares that can be sold on, means that eventually the company will sell the asset resulting in an increased value for shareholders. Given the digital format of the company, the emphasis is based on 24/7 trading in order to make assets liquid. This means that at any time, and from anywhere, users can invest and profit from the cultural assets around us. But what does that mean for the value of the present if we’re constantly searching for artefacts of the past and predicting what will become the next coveted object? Do we lose the precedence of material value if we have to become the sole owner, rather than appreciate its function?
Owning assets, while empty handed
While owning assets presents obvious benefits of access, insuring the asset isn’t always as easy, particularly if you’re looking for a return. Gone are the days of the gavel at auction, usurped by a simulated button on the screen. The internet is many things and a host to opportunity it continues to be. With high net-worth individuals investing around 5% of their worth into collectibles, the internet broadens the possibilities for anyone to do the same, without the staggering pay grade. But what will the ubiquity of the race for possession do to our perception of ownership, when it’s no longer tangible? As the NFT market tripled to more than $250 million in 2020 alone, according to a report by NonFungible.com, and the culture economy for brands like Otis follow suit, are we simply in another pyramid scheme of the future, missguided by the belief of getting rich quick, time poor, and this time, with nothing to show for it in our hands?
Image credit: Raychan via Unsplash