Are NFTs here to stay?

In her monthly Expert Take column, Selva Ozelli, an international tax attorney and CPA, covers the intersection between emerging technologies and sustainability, and provides the latest developments around taxes, AML/CFT regulations and legal issues affecting crypto and blockchain.

On Nov. 14, Tezos-based nonfungible token (NFT) marketplace Hic Et Nunc — which in Latin means “here and now” — abruptly shut down. Artists became worried about their NFTs on exhibit at the Hermitage Museum’s first-ever NFT exhibition, “Ethereal Aether” (Nov. 10 to Dec. 10), as well as Art Basel Miami’s first-ever NFT exhibition, “Humans + Machines: NFTs and the Ever-Evolving World of Art” (Dec. 2 to 4).

Diane Drubay, founder of We Are Museums and a minter of NFTs on Hic Et Nunc — who curated a panel discussion at Art Basel Miami — explained to me: “Of course, it was a shock to see Hic et Nunc shut down, but people took it right away as a new step over in their journey. Because when the website shut down, our NFTs were preserved on-chain, nothing was lost and artists were safe to keep making a living from their NFTs. We saw mirrors or new versions of being opened only a few hours later, which provided the necessary backup for artists to keep selling and buying, exhibiting NFTs.” She also added:

“The community is now organizing itself to create a decentralized autonomous organization (DAO) to keep experimenting with decentralization on Web 3.0.”

This incident made me wonder: Will the “International Year of Creative Economy for Sustainable Development,” as declared by the United Nations General Assembly, go down in history as the year NFTs entered the mainstream? Or will it go down as a passing global fad of invention lurking in the shadows of the COVID-19 pandemic? I conducted research and interviews to find the answer.

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