NFT in India

 NFT in India

What is NFT?

To explain in the simplest terms one can say that an NFT refers to tokens that are basically non-fungible meaning they can’t be altered or interchanged and only a specific individual owns the original. NFTs are mainly digital assets and can be used in various ways or in fields to certify ownership over any kind of property be it music, art, sport, tweets, memes, games, etc. The functioning of NFT is almost like a cryptographic token but unlike Bitcoins or any other cryptocurrencies, it resists mutual interchangeability. The transaction records of NFTs are permanent and go through multiple verifications and prohibit deletion or other variations; NFT doesn’t give copyright but digital boasting rights. Also, NFTs neither offer any cash flow in the market nor are real assets. For instance, an artist with NFT for his/her creation can achieve ownership rights for the creation and can easily access the international market and claim benefits. It also owns a feature where you get paid a percentage every time the NFT is sold or transferred from one hand to other. The craze for NFTs particularly soared up during this pandemic. For example, the shares of a shipping and logistics company called as Sino-Global Shipping America Ltd saw a sudden rise of 300% in the year 2021.

Why the sudden hype around NFTs?

  • Transparency is a prominent feature in the NFT platform. The bug-free payment process offers a very smooth transaction.
  • Smart Contracts are implemented here with digital signatures to prevent fraud activities.
  • Decentralization enables data to be copied and distributed to various blockchain networks.
  • Low traffic congestion.
  • The in-built security secured by private keys protects from transaction loss.

Future of NFTs in India:

Very recently WazirX, known to be the largest cryptocurrency exchange body in India, launched India’s first NFT marketplace. According to sources, this platform will feature artists from various fields from the home country and a few from South African countries. WazirX is concentrating on NFT token developments as well. The collectors can purchase NFTs through WazirX using its token called WRX with a 5 % service fee on every sale. The tokens thereafter can be transferred to a different blockchain. According to Vishakha Singh, Advisor of NFT marketplace at WazirX states “Our list of curated collectors and the 5 Million strong WazirX Crypto Community shall give us the impetus needed to grow the NFT community within the region.”

Keypoints of NFT Marketplace in India:

  • There are 15 existing creators and the number of applications received is more than 15 thousand from various creators and collectors.
  • It will follow the same technology as its parent company Binance.
  • No listing price has been decided yet.
  • An open platform for all to buy/sell NFT.
  • A gas fee of $1 shall follow as a transaction charge.
  • There will be no bidding, only “fixed price” sales to be allowed at present.
  • Spotlight and Discover will be the two categories of any artwork on sale.
  • The spotlight section shall feature only the curated artists, whereas the Discover section shall feature 50 artists out of the thousands.

 â€œGlobally, 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. Only cryptocurrencies can be used for the payment,” Said Nischal Shetty, founder of WazirX.

Does Government approve?

The government has not shown any indication to disapprove NFTs yet but there is a cloud of ambiguity hovering over their legal status. As per the Securities Contract Regulation Act, NFTs are derivatives making them unsuitable for exchange, trade, sell or purchase. A value of an NFT is derived from stocks or commodities but there remains no framework for a non-financial asset.

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