Cryptocurrency is becoming more and more mainstream with celebrities like Elon Musk and others talking about using them as a mode of payment. Among these, NFTs have taken the cryptocurrency world by storm, with many artists selling their digital pieces of art for millions of dollars. Therefore, to cash in on this trend, the largest cryptocurrency exchange in India, WazirX, has launched India’s first NFT marketplace.
What NFTs Are and How they Work
NFTs are a form of unique digital assets that cannot be interchanged. They act as digital certificates of ownership of an asset. It means that every NFT is one-of-a-kind and is irreplaceable with another ‘identical’ asset.
For instance, bitcoins are fungible digital assets. It is because bitcoins are essentially replicas of each other. Since each bitcoin has the same value, it can be exchanged with one another.
While both NFTs and bitcoins are digital assets, NFTs are unique because each of the tokens represents a specific value.
According to Investopedia, NFTs are cryptographic assets on blockchain with unique identification codes and metadata that distinguish from each other.
How this Launch Affects India’s Crypto Space
WazirX, the digital cryptocurrency exchange will provide the platform for the buying and selling of digital assets and intellectual properties like videos, art pieces, images among other digital goods.
Nischal Shetty, CEO of WazirX, said, “Globally, the market is nascent at $10-15 million per week, but the potential is huge. As of now, it is difficult to estimate the market size in India. We’re in discussions with some artists for listing. Basically, the artist has to first create the music or video file and upload it to a crypto wallet. The money then gets locked into a smart contract which only transfers the NFT when payment is received”.
WazirX will allow Indian creators to put up their digital assets for auction on their blockchain-based NFT marketplace and earn royalties. To automate the whole process digital files will be stored in a crypto wallet to eradicate the risk of either party defaulting.
You can only use cryptocurrencies for payment.
Shetty also said, “As for the copyright or royalty, the artist can decide whether to transfer these rights along with the NFT or only give it for private use. This will be stated in the code”.
Source: Genesis Block
NFT activities have decreased since their initial boom. Despite that, the NFT market is worth more than $338 Million as of 2020. However, it should be noted that the government has been slow at providing regulations for these instruments.
Additionally, NFTs and other cryptocurrencies remain to be high-risk assets. Therefore, it’s advised that retail investors should invest with absolute caution.