Ranveer Singh starrer '83' movie, while stirring the box-office with its record-breaking collections, also shook the non-fungible token (NFT) industry with its record sales. The movie's official digital collectibles (NFTs) launched by 'Social Swag' sold 10 lakh worth of NFTs within an hour of launching the movie's official NFTs in January. Such is the craze for the NFTs!
So, what is an NFT? What can be converted to NFT? Why the craze for Bollywood NFTs? Should one invest in them? How much price appreciation can one expect?
An NFT is a digital asset written in computer code and recorded on a blockchain ledger, used to prove ownership and authenticity of an asset, which can be either physical or digital. How is an NFT different from cryptocurrency? "Unlike cryptocurrencies which are fungible (interchangeable), each NFT is unique," says a report by the Esya Centre, in association with the Internet and Mobile Association of India (IAMAI). In other words, explains the report, one Bitcoin is the same as any other Bitcoin, and is convertible on a 1:1 basis. But each NFT is unique and non-fungible, and cannot be replaced or switched with any other NFT. This characteristic of uniqueness and non-fungibility drives the value of NFTs, as it allows users to establish ownership and authenticity for virtual and physical goods in the digital realm, something that was previously difficult to do.
Bollywood NFTs have become popular after veteran actors like Amitabh Bachchan and Salman Khan forayed into the space. There may be several digital voice objects of Amitabh Bachchan in Bollywood, but only the original from Amitabh Bachchan himself will have significant worth. "Bollywood NFTs could include stories, videos, photographs, shoot videos, behind-the-scenes footage, and so on. Now, all of these from original producers will be valuable and provide a sense of unique ownership of the object or digital copyright," says Shivam Thakral, CEO of BuyUcoin, a homegrown cryptocurrency exchange.
Buyers have made exceptional profits in the NFT space. For instance, as per marketplace BeyondLife.club, Amitabh Bachchan's NFT— 'BigB Punks #1633', which was originally bought by an investor for $10 in November last year from. Big B, is currently priced at $2,500 by the present owner. The current owner of the NFT mentioned above, bought it for $1,200.
One of the invitations NFT Collection featuring the first meta-verse wedding of Asia which was sold at the base price of $10 is now being traded at 400x price of over $4,400.
What can be converted to NFT?
Kevin McCoy minted the first NFT in 2014. Known as 'Quantum' it represents a work of generative art. Indeed art continues to be one of the most popular use cases for NFTs, and people enjoy collecting digital art for the same reasons as physical art: aesthetics and social status. Some of the most popular NFT art collections, like CryptoPunks and the Bored Ape Yacht Club (BAYC), are primarily used as profile pictures on social media platforms to reflect status and membership in an exclusive community. Besides art, NFTs are widely used to represent collectibles such as trading cards and works of music. Sonu Nigam recently became the first Indian musician to monetise a song in the form of an NFT, for his first English track 'Hall of Fame'.
Sports moments can be made into an NFT for the fans. Rario, the world's first officially licensed cricket digital collectibles platform has recently added the Indian fast-ball spearhead, Bhuvneshwar Kumar to its growing list of cricketing superstars to have signed an exclusive contract with them. Kumar joined the likes of Virender Sehwag, Zaheer Khan, Smriti Mandhana, Rishabh Pant, Rashid Khan, Jason Holder, Quinton De Kock, M Siraj, Ruturaj Gaikwad, Shafali Verma as player partners of the platform.
Another trending area for the use of NFTs is gaming. Gamers have purchased in-game virtual goods such as character skins and weapons for a while now. "NFTs add an element of rarity to these goods by making them more valuable. This is exemplified by Axie Infinity, a Pokémon-style game in which each character, or Axie, is minted as an NFT possessing unique attributes that differentiate it from others," says the Esya Centre and IAMAI report.
Fashion industry is no less. Leading designer Manish Malhotra auctioned sketches of a few iconic outfits designed by him as NFTs in collaboration with the Lakmé Fashion Week on the WazirX NFT platform. The synergy between NFTs and fashion is unsurprising, says the IAMAI report, given that uniqueness and rarity are aspects essential to both. On a grander scale, in September Dolce & Gabbana sold its inaugural collection of NFTs representing both digital and physical items. Adidas partnered with the Bored Ape Yacht Club (BAYC) and other notable NFT influencers to launch its collection of NFTs comprising physical and digital objects in December as part of its Into the Metaverse collection. It was also revealed that Nike holds a patent for CryptoKicks, which enables the tokenisation of shoes and authenticates their ownership.
NFTs hold tremendous potential to revolutionise the real estate market. A property can be minted as an NFT which is then fractionalised or split up into several smaller parcels that retail investors can purchase. Tickets to concerts and events can be converted into NFTs. As per the IAMAI report, it will help to resolve common issues with physical tickets, such as black marketing and duplication.
NFTs are playing an increasingly important role in decentralised finance or DeFi as well. "Virtual and digital assets enable trustless and global peer to peer transactions. As a result, users can transact with each other without the involvement of an intermediary or trusted third party, like a bank," says the IAMAI report.
Bollywood NFT Buzz! Should you invest?
Currently, the Bollywood tokens are on a boom. Apart from the mind boggling success of the '83' movie NFT sale, we have recently witnessed an NFT auction of Bollywood star Amitabh Bachchan's NFT collection, it fetched 1 million dollars. While this is big for the Indian market, overseas the NFTs have broken many milestones. However, Amit Nayak, CEO and co-founder of SahiCoin, says considering the popularity of these stars and the current trend of NFTs in India, we can evaluate Bollywood NFTs as an investment option for fans.
A voice, meme, shorts/reels, and video can become valuable, says Thakral of BuyUcoin, in the future and may double/triple the investment based on the actor(s) fame and content, depending on an original content producer from Bollywood.
The value appreciation of Bollywood NFTs will vary depending on the performer and the buyer's interest in the same. Additionally, adds Thakral, the owner can adjust the value and sell it at a different price, resulting in loyalty defined by the owner, which presently ranges from 10% to 20%.
Industry veterans are optimistic on the growth of NFTs. "NFTs are in an early stage in India and we believe that there is still some gap between the supply and demand of NFTs in the country. However, we expect a significant increase in the near future bearing in mind the large crypto user-base and adoption rising in the country," says Nayak of SahiCoin.
However, in case the demand or assumed value of an NFT drops down, the price of the token would fall in line. There is no guarantee of appreciation in value. One should not look at Bollywood NFTs or NFTs in the entertainment space specifically, to meet the financial goals.