Digital Assets Firm Kraken Explains Why Blockchain based NFTs are a Revolutionary New Licensing Technology

 

The team at digital assets firm Kraken notes that humans have “always loved making and displaying art.”

The US-based crypto exchange provider reveals that deep within a cave in Spain, there’s a Neanderthal hand stencil that scientists “have radiocarbon dated to 64,000 years – it’s the oldest known example of art anywhere in the world.”

During the last 60,000 years, human creative expression has “expanded into a plethora of mediums, styles, techniques and capabilities,” the Kraken team adds while noting that one of the newer mediums happens to be digital art: “creative content that exists as a computer file and can be shared readily on the internet. ”

During the last year, digital art has continued to make headlines from the staggering amounts of money secured at different auctions; “sums that could only have been raised using non-fungible tokens (NFTs),” Kraken claims.

The company pointed out that the Beeple piece sold at Christies recently for almost $70 million by using an NFT. Then there was Square and Twitter CEO Jack Dorsey who managed to raise $2.9 million for charity by auctioning off his very first tweet with a non-fungible token, of course.

Kraken wrote in a blog post:

“CryptoPunks, 24×24 pixel digital images and one of the first examples of an NFT, now regularly sell for anywhere between $30,000 and $100,000 – one even went for more than $1 million recently. Established artists are now moving in on the game. American DJ 3LAU raised over $11 million selling revenue rights to his new album, and incidentally, played at Kraken’s virtual holiday party in Decentraland – a NFT-based virtual reality platform.”

However, the overall market activity might have “lulled slightly since the freneticism of late February, but it was still worth more than $33 million in the last week of March,” Kraken confirmed while noting that Damien Hirst, one of the most famous artists in the world, has revealed their plans for an NFT initiative, which was “still shrouded in mystery at the time of writing.”

As mentioned in a blog post from the Kraken Learn Center, NFTs are a type of virtual or digital token that resides on a blockchain or distributed ledger tech (DLT) enabled network. It’s basically just a computer file “for digital trading cards, in-game items, audio clips or artworks.” Kraken further explained that just like Bitcoin, these so-called NFTS may be traded online or kept in a cold storage wallet. But unlike Bitcoin, each NFT token is “a unique asset and digital.” Kraken also mentioned that all of these tokens “represent and confer ownership rights to a particular piece of digital creative content.”

Kraken also noted that if you “boil down what an NFT really is, it’s just a form of licensing technology that allows owners of, say, digital artwork, to exercise their proprietorial rights online,” however it’s “still a very significant innovation.”

That’s because artists and content creators may use the Internet to freely distribute their work “at a scale unimaginable thirty years ago,” Kraken claims while adding that “rather than being obligated to go through galleries or record labels, many digital artists have been able to freely share their work directly with the public.”

Kraken’s blog post further noted:

“Long before cryptocurrencies, the internet was the original ‘middlemen cutter.’ It overhauled the very way in which human creative expression was disseminated. A particular piece of artwork can be shared thousands of times on social media long before it’s ever heard of by an art critic. Similarly, a piece of music can be played on the radio long after it first went viral on YouTube or SoundCloud. Content creators can harness the power of the internet to speak directly to people, not just in their own towns, cities or countries, but to disparate global communities.”

However, the Internet has “proven to be a double edged sword,” according to Kraken’s blog post whch also mentioned that up until fairly recently, a piece of art or a music sample “shared online effectively, if not legally, entered the public domain.” Kraken added that basically anyone with Internet access was able to “easily copy and download computer files of a picture that they liked, or of a song that they wanted to listen to again.”

Kraken further explained:

“Ownership was difficult to enforce, leaving content creators, even highly successful ones, struggling to properly monetize their work. What made the internet highly effective as a tool for sharing has also made it abysmal as a means for artists to make a living. The only solution so far has been to bring middlemen back into the picture, who keep access exclusive, and profitable, with paywalls and subscriptions. Some of these platforms take bigger cuts than the content creator themselves.”

But with non-fungible tokens, artists can, “for the very first time, assert rights of ownership over their digital work,” Kraken noted while adding that “the beauty of an NFT is it doesn’t preclude anyone from viewing or enjoying a piece of content online – they can download their favourite digital artworks to use as screensavers as much as they want – but they don’t own it.”

Kraken also mentioned that it’s a bit like “owning a famous painting; everyone knows what it looks like, and they can view it online, but the only one with any rights of ownership is the person with the right documentation – the right licensing.”

According to Kraken:

“For the content creator, NFTs represent a highly lucrative proposition. The internet has been the catalyst for a Cambrian explosion in forms and styles; the last thirty years have been one long revolution in the creative arts. The only thing that was holding back further innovation and progress was the absence of revenue. NFTs directly address this. They enable individuals to earn the rewards they deserve from the content they create and share online. How the NFT tale ends is still too hard to tell, but it is likely the next exciting chapter in a story that began thousands of years ago in a Spanish cave. NFTs will undoubtedly be a part of the digital asset space to watch closely in the months and years to come.”

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