Crypto has become a hot topic of discussion among investors. The recent announcements of the launch of non-fungible tokens (NFTs) by Bollywood superstars have added to the craze. Should you invest in NFTs of your favourite actors? Or should you refrain from entering the NFT space altogether? Here’s all you need to know.
Wong Kar-Wai, one of modern cinema’s most influential film directors in China, rolled out the first Asian film NFT of never-before-seen footage from In the Mood for Love, which was auctioned via Sotheby's. Bollywood artistes, including Amitabh Bachchan, Salman Khan, Suniel Shetty, Sunny Leone and singer Kailash Kher are also backing NFTs.
Last week, Salman Khan announced he would be rolling out NFTs through BollyCoin, an Ethereum-based marketplace. Amitabh Bachchan is set to drop his first edition of limited edition NFTs on BeyondLife.club, a talent and athlete NFT exchange, in the first week of November. However, NFTs are not for everyone.
NFTs are crypto assets with a unique certificate of authenticity which makes them rare and high-value digital assets. BeyondLife.club says artwork associated with an NFT is stored on a decentralised file system and gives the collector ownership of a unique collectable. It is also traceable on the Blockchain, which is an immutable decentralised ledger of information.
Going by industry experts, Bollywood can open the biggest market for NFTs in the world. “Indians are very passionate about movies with movie stars having a huge fan following within and outside India. The fan base of movie stars could be more than willing to buy an exclusive digital artwork of their favourite movie stars,” says Shivam Thakral, CEO, BuyUcoin. But people, who are exploring NFTs only based on hype and speculative returns, should better stay away. Like any other investment, says Thakral, NFTs are subject to market risks and investors should follow fundamental rules of investing for reaping maximum benefit from their NFT investments.
Some also argue the entertainment industry is evolving continuously. What is liked today may not be liked tomorrow.
Jay Hao, CEO, OKEx, a Seychelles-based crypto exchange, believes people who think NFTs are a quick and easy way to make money should not invest in them. “NFTs act as digital collectables, art pieces and music royalties, but also a new revenue model via tokenisation that decentralises and vibrates various industries.”
Also, NFTs are not suitable for non-tech savvy audiences. NFTs are mostly for people who like to collect unique artworks or are interested in learning about this new technology. Some users, says Jay Hao, also buy NFTs to speculate on their value, which may or may not increase over time.
NFTs could also be used for purposes like land ownership proof. There may be many more use cases of NFTs which are still being explored.