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The NFT market is being cast as a market for art. But what it might really represent is a new type of advertising or rankings system for cultural influence and propagation. Also worth asking is whether the truly disruptive element of cultural tokenisation might be in liberating the art world from the excessive influence of the small network of powerful dealers, auction houses and middlemen who currently dictate what does and does not constitute art and in so doing withhold it from more popular aesthetic appreciation? That, at least, was the democratising promise of Fintech and crypto vis-a-vis banking. (Whether it succeeded is still up for debate.)

"This study, commissioned by the European Parliament's Policy Department for Citizens' Rights and Constitutional Affairs at the request of the JURI Committee, aims to provide an overview over Intellectual Property Rights and Distributed Ledger Technology with a focus on IP issues relating to art NFTs and tokenized physical art works."

Just as we look back today and enjoy our physical inheritances of books, music and art, we will look back tomorrow at our digital inheritances of books, music and art. The only difference is today it is digital, not physical. This is why I am watching NFTs with interest.

For all its talk about imminently disrupting cross-border payments, Ripple Labs, the cryptocurrency-startup that likes to make-out it's in with the mainstream banking boys, has had very little to show for its efforts in terms of real-world applications or relationships.

In February, a 10-second video clip known as "Crossroads" by the digital artist Beeple sold at auction for $6.6 million. An animated image of a flying cat leaving a rainbow trail went for almost $600,000 that same month. A video of a LeBron James dunk sold for a mere $200,000. What do all these have in common? Each is an example of a non-fungible token, and the boom in digital art they have set off. So what is a non-fungible token?

Non-fungible tokens (or NFTs) are unique blockchain-based tokens that can represent almost anything, including physical assets. NFTs have been growing significantly in popularity in recent years because of this potential to "tokenize" anything and provide a way to transfer ownership of digital assets to holders. An NFT can be described as a certificate of authenticity. Most NFTs today are based on the Ethereum blockchain, but some other blockchains like TRON and NEO also support NFTs.

Last week, a crypto whale going by the moniker "Metakovan" bought a Beeple artwork via Christie's auction for $69 million-$60 million in ETH and $9 million in fees-outbidding a surprised Justin Sun, founder of the Tron blockchain, at the last minute.

The Central Bank of Bahrain (CBB) is collaborating with J P Morgan and Bank ABC in a pilot scheme to introduce instantaneous cross border payment solution leveraging state of the art technology and digital currency. Bank ABC and J.P. Morgan will pilot the transfer of funds from and to the Kingdom of Bahrain in US-Dollars for payments from buyers to suppliers. The CBB will act as a close partner in the pilot and going forward would look to extend the collaboration to central bank digital currencies (CBDCs).

NFT issuers are advised to avoid marketing NFTs as an investment that can reward holders with appreciation, profit, or dividends. The concern here is that such marketing could transform a non-security into a security, such as in the Gary Plastic case, in which a secondary market for the instruments was touted.

Digital art, by its very nature, is hard to own. Once it's on the network, anyone can copy and share it. But if you buy it as an NFT, then the ownership is yours and it is non-fungible. That term I first heard in investment banking when we were talking about the fungibility of something. It basically meant that one thing could be exchanged by another, in my simple understanding. Oil could be exchanged for gold which could be exchanged for US dollars. They are fungible assets.

An NFT is a secure, blockchain-based record that represents pieces of digital media. Invented only a few years ago, a token can link not only to a piece of digital art but to videos, music, text, memes or bits of code.

Non-fungible tokens (or NFTs) are unique blockchain-based tokens that can represent almost anything, including physical assets. NFTs have been growing significantly in popularity in recent years because of this potential to "tokenize" anything and provide a way to transfer ownership of digital assets to holders. An NFT can be described as a certificate of authenticity. Most NFTs today are based on the Ethereum blockchain, but some other blockchains like TRON and NEO also support NFTs.

An NBER paper enumerates the fundamental technical design challenges facing CBDC designers, with a particular focus on performance, privacy, and security. Through a survey of relevant academic and industry research and deployed systems, it discusses the state of the art in technologies that can address the challenges involved in successful CBDC deployment. It also present a vision of the rich range of functionalities and use cases that a well-designed CBDC platform could ultimately offer users.

"Today, the foundational invention of non-fungible tokens (NFTs) made popular by CryptoKitties is being applied to a broad set of use cases from digital art and in-game items, to digital identity credentials and land titling. "

By allowing ownership rights to be digitally represented, asset tokenization enables fractional ownership and allows for assets such as real estate, a work of art and a vintage car, to be divided into tokens representing smaller ownership stakes. This unlocks access to illiquid assets, allows more people to participate in investments previously limited to those with high net worth and lowers thus the barrier to entry. Tokenization can also greatly reduce the time and resources required to buy and sell assets. By using blockchain technology and smart contracts, this technology cuts down on paperwork and processing time, eliminates the need for many traditional intermediaries, and decreases operating costs due to disintermediation.

The Bank of Canada published a paper that proposes a pseudonymous credential scheme for use in payment systems to protect users from fraud and abuse while retaining privacy in individual transactions. The scheme is privacy-preserving, efficient for practical applications, and hardened against quantum computing attacks. A practical and interactive credential mechanism was constructed, in which users are issued pseudonymous credentials against their personally identifiable information that can be used to register with financial service providers without revealing personal information. The protocol is shown to be secure and free of information leakage, preserving the user's privacy regardless of the number of registrations. Comparison reveals that the scheme is more efficient than equivalent, state-of-the-art post-quantum schemes.

To allow CBDC to be broadly accessible and transferable in real-time without continuous dependency upon digital connectivity, an "offline" capability to create secure point-to-point payments through the use of authorized hardware will be critical.

Jonas Gross and Conrad Kraft argue that, although the slow uptake of retail CBDC pilots and launches may be viewed as disappointing by some, it isn't uncommon among transformative payment technologies (e.g., credit cards, online banking and e-wallets). They provide a number of key factors that can guide the gradual transition to wider-spread CBDC adoption, such as education and awareness, maintaining a focus on technological advancements and security, developing regulations that support CBDC growth, and collaborating with all stakeholders, including merchants, banks and payment service providers. And most importantly, "CBDC must offer unique features that surpass the capabilities of existing payment instruments... A CBDC that merely replicates current digital money, differing only in its central bank backing (largely imperceptible to potential users), won't attract widespread use."

The Journal of Payments Strategy & Systems published a paper by Gieseke+Devrient's Lars Hupel that describes the state of the art for interoperability between different digital ecosystems, including bridges, exchanges and wrappers. The precise design of such solutions is highly context-dependent and requires careful analysis of use cases, stakeholders, and operational concerns. With regards to central bank digital currency (CBDC) the challenges relate to the multiple connection points, and the absence of a single technological means to address all of them uniformly. The paper puts forward some suggestions around different CBDC design options and potential use cases, and discusses some case studies.

"Non-fungible tokens (NFTs) have been widely adopted by the sports, arts, music, gaming, fashion, and other industries. Behind the hype is a fast-developing ecosystem of technical and commercial innovation that is embracing the promise of bridging physical world concepts of uniqueness and scarcity with the digital world. The NFT market has seen enormous growth in recent years, with sales of NFTs reaching $25 billion in 2021 by one estimate, and this is only expected to grow as creators and brands craft their plans for the metaverse in which NFTs are expected to play a critical role...."