NFTs Are The Future of Art – But How to Spot The Fakes as Demand Soars?
NFT technology is helping to make art profitable again, but plagiarism and fakes are “becoming a massive issue” for both artists and buyers, warns a world-famous British artist who has crossed over into the digital space.
The warning from Adrian Chesterman, who has worked with the likes of Steven Spielberg, Andrew Lloyd Webber and Chris Rea, comes as evidence shows that there are a record number of fake NFTs in the marketplace.
An NFT (non-fungible token) is a digital asset that can be an image, audio clip, or GIF and whose ownership is recorded on a tamper-proof digital ledger known as a blockchain.
Over the last year, the NFTs market has exploded, with a digital-only piece of art selling for $69 million in 2021.
Since then, an ever-growing number of artists and celebrities, and fashion, music, tech and sports brands have been creating, buying and selling ‘tokens.’
Chesterman says: “Since the explosion of NFTs last year, plagiarism and fakes have been an increasing problem.
“This is attributable to two main reasons. First, demand is soaring globally for NFTs and therefore there are simply a lot more people in the market – both collectors and artists.
“Second, some of the major NFT platforms are not fit for purpose because users can list NFTs without adding them on the blockchain and they don’t pay fees until they sell. Vetting systems need to be more robust.”
Against this backdrop, how does Chesterman, who has just released a contemporary version of his Chris Rea’s Road to Hell album, says there are ways collectors can buy NFTs – “the future of art” – without being caught out by scammers.
“First off, the rule of thumb is: If the deal seems too good to be true, that’s because it probably is. Prices of NFTs are based on supply and demand. If an NFT is priced significantly cheaper or more expensive than similar NFTs from the same collection or category, it may be a fake.
“Check the authenticity of the NFT by doing a reverse Google image search. In addition, the platform can verify collections and their artists. Typically, a blue checkmark will appear by its title if it’s the real deal.
“Ultimately, the best way to ensure your NFT is genuine is to choose the right platform, perhaps one with human moderators is best.”
Despite the issues, the globally renowned artist Adrian Chesterman is determined to continue in the NFT space. Why?
“NFTs are the future of art, without question. We’re increasingly living digital lives and NFTs allow us to take the images we love into this world – with an even further enhanced experience for the buyer. It’s the inevitable way forward.
“In addition, it’s good for an artist’s profitability. They can prove if their works are counterfeited, and they can include criteria to get royalties every time their works are re-sold in the future.”
International art dealer, Stephen Howes, of Thomas Crown Art, who represents Adrian Chesterman, agrees: “NFTs are an emerging marketplace, but one which represents the future, for sure.
“It allows artists to make some money and exercise control over their work, to sell it more easily, reach a global audience, to more strongly protect against others appropriating it without permission, and sidestep the traditional biases of the ‘art industry mafia’.”
Chesterman’s most recent work appeals to this future-focused buying audience.
“As the illustrator of the original Road To Hell album cover, I’ve now produced a contemporary version of the concept of hell more relevant to the state of the world today.
“In 2022, we’re only too conscious of the modern-day version of hell we have created for ourselves. So the medieval cliches of tortured souls in eternal fire and demons with pitchforks have now been replaced by images of pollution of the world’s oceans, the ongoing nuclear threat and air pollution.”
He concludes: “The NFTs market is booming. It’s an exciting time – and right now there’s a certain degree of ‘early adoption advantage’ for serious buyers.”
US Regulatory Body Sues Binance for Breaking Trading Rules
The world’s leading cryptocurrency exchange platform, Binance and its CEO Changpeng Zhao (CZ) were sued on Monday by the US Commodity Futures Trading Commission (CFTC).
The U.S. regulator alleged that Zhao and his company violated trading and derivatives rules.
According to a lawsuit filed by the CFTC in a Chicago federal court, Binance operates a facility for trading digital assets without necessary registration, thereby offering unregistered crypto derivatives products to consumers in the U.S. against federal law.
The suit also alleged that the company, under CZ’s leadership, directed its customers to spoof their locations through the use of virtual private networks (VPN), Investors King learnt.
“VPN use by customers to access and trade on the Binance platform has been an open secret, and Binance has consistently been aware of and encouraged the use of VPNs by U.S. customers,” the suit read.
“The company directed important customers such as trading firms to set up shell companies in places such as Jersey, the British Virgin Islands and the Netherlands to avoid restrictions”, the filing added.
In a press release on Monday, CFTC Chief Counsel Gretchen Lowe called Binance’s actions “willful evasion of U.S. law,” pointing to internal chats and emails.
Lowe is making reference to internal chats between Binance employees, where the company’s Chief Compliance Officer directed an employee to ask U.S. customers to hide their location.
As a penalty, the CFTC seeks to compel Binance to repay allegedly ill-gotten gains that stem from the misconduct it is accused of. It also wants Binance to pay civil penalties and accept bans on trading as well as its ability to register within the U.S.
Meanwhile, the price of bitcoin fell around $1,000 to trade below the $27,000 mark after the lawsuit was first filed. Similarly, Binance’s exchange token BNB fell about 3% while crypto-related stocks also fell after the suit was published.
Statista Predicts 150 Million Indians to Have Crypto By the End of 2023
A Statista report has predicted that India’s crypto community will surge to more than 150 million members by the end of the year. This was estimated at more than 11% of India’s total population.
The report added that most Indians who deal with digital assets are well-educated and aged between 18-40. Going by the report, by the end of 2023, India’s crypto adoption rate is expected to surpass that of the United States, the United Kingdom, Japan, and Russia.
Statista noted that educated younger individuals with middle-income status in India are seeking alternatives to the shaking banking system with residents of the Federal Capital, Delhi most inclined to buy and hold digital currencies for the long term.
The uncertainty in the traditional financial system and the search for higher returns are the main factors pushing Indians toward the digital asset sector.
Last year’s KuCoin survey indicated that the total number of domestic crypto investors in India is around 115 million, of which around 40% fall in the 18-30 age group.
Several reports have earlier projected more crypto adoption in the years ahead with countries in Europe, America, Asia and Africa leading the adoption chart. Investors King learnt.
According to HedgewithCrypto research, Australia is the biggest country when it comes to cryptocurrency adoption in 2023 as 7.37 out of 10 persons owned a digital currency. The sale of cryptocurrency and other digital assets is legal and regulated in Australia.
Other countries on the top ten list include the United States, Brazil, UAE, Hong Kong, Taiwan, India, Canada, Turkey and Singapore.
Meanwhile, a number of analysts have predicted that Bitcoin could begin a new macro uptrend in a matter of days despite facing problems flipping $28,000 to support.
Bitcoin has so far shown an impressive performance since the beginning of the year.
The flagship cryptocurrency is up more than 50% in 2023 despite the series of challenges that have impacted the banking system and the anti-crypto approaches from the US Securities and Exchange Commission.
Nasdaq Set to Launch Crypto Custody Service
Nasdaq, an American stock exchange based in New York City, is reportedly gearing up to launch crypto custody services for Bitcoin and other digital assets. The launch is billed to debut in the second quarter of 2023.
Investors King understands that the exchange first announced its plans to set up a digital asset business in September 2022 and has been steadily working on setting up the division over the months.
At launch, Nasdaq will join Bank of New York (BNY) Mellon and Fidelity among other large financial firms offering crypto safekeeping. In the fourth quarter of 2022, BNY Mellon said it would provide custody and transfer services for bitcoin (BTC) and ether (ETH), specifically, to a number of its institutional clients.
According to the Bloomberg report, “Nasdaq has applied to the New York Department of Financial Services for a limited-purpose trust company charter, which would oversee the new business.”
In an interview on Friday, Senior Vice President and Head of Nasdaq Digital Assets Ira Auerbach said that Nasdaq “is pushing ahead to get all the necessary technical infrastructure and regulatory approvals in place.”
The launch is coming amid increasing calls for crypto regulations and the offensive position of the US Securities and Exchange Commission against cryptocurrency firms.
However, analysts believe that if successful, the crypto custody service will give more legitimacy to cryptocurrency and aid new adoption, especially among institutions and high net-worth individuals who have harbour uncertainties about digital assets.
It appears that institutional interest in cryptocurrency is still high despite the price collapse and several unfortunate events such as the collapse of FTX which bedevilled the industry in 2022.
Meanwhile, cryptocurrency adoption continues to be on the rise in Germany as DWP Bank, a German securities processing firm that manages over 5.3 million securities accounts allows its affiliated banks to offer Bitcoin (BTC) trading to its retail customers. Similarly, another German bank, DZ Bank plans to offer a Bitcoin option for its customers by the end of the year.
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