Non-fungible Tokens Research Articles

Is that JPEG worth 70 million dollars? Value creation and perceptions of nonfungible tokens in a bubble economy

Is that JPEG worth 70 million dollars? Value creation and perceptions of nonfungible tokens in a bubble economy

Wallets' explorations across non-fungible token collections.

Non-fungible tokens (NFTs), which are immutable and transferable tokens on blockchain networks, have been used to certify the ownership of digital images often grouped in collections. Depending on individual interests, wallets explore and purchase NFTs in one or more image collections. Among many potential factors of shaping purchase trajectories, this paper specifically examines how visual similarities between collections affect wallets' explorations. Our model characterizes each wallet's explorations with a Lévy flight and shows that wallets tend to favor collections having similar visual features to their previous purchases while their behaviors vary widely. The model also predicts the extent to which the next collection is close to the most recent collection of purchases with respect to visual features. These results are expected to enhance and support recommendation systems for the NFT market.

The Potential of Non-Fungible Tokens (NFTs) In Enhancing Malaysia's Arts and Cultural Heritage Preservation

This study investigates the transformative potential of Non-Fungible Tokens (NFTs) in revolutionizing the marketing of artworks by Malaysian visual artists, with a particular focus on promoting cultural heritage. NFTs, as digital assets secured by blockchain technology, offer artists innovative methods to monetize their creations while preserving authenticity and provenance. Despite their growing popularity, Malaysian artists face challenges such as limited knowledge and skepticism regarding the effective use of NFT technology. This research aims to identify strategies and best practices for incorporating NFTs into digital art marketing, particularly in the context of cultural heritage preservation. Through a combination of content analysis and semi-structured interviews with five experts, this study applies the soft laddering technique to explore the perceived benefits and challenges of NFTs. The findings highlight the significant potential of NFTs to enhance Malaysian artists' access to global markets and strengthen the preservation of cultural heritage. The study underscores the need for improved technological literacy and NFT utilization among Malaysian artists to maximize their presence and competitiveness in the evolving digital art marketplace.

Constructing digital assets through blockchain technologies? Unpacking the techno-economic configuration of non-fungible tokens.

Non-fungible tokens (NFTs) are novel techno-economic configurations underpinned by cryptocurrency ledgers that transform digital files like graphic art, music, videos, etc. into digital assets. NFTs are often framed as a way for artists and other creators to profit from their activities, transforming 'experiences' into something for sale. As such, NFTs raise some questions pertinent to science and technology studies and political economy. We focus on analysing how NFTs are constructed as digital assets by unpacking the practices, devices, relations, and rights implicated in their construction. We use the concept of 'assetization' to examine the contingencies, problematics, and implications of NFTs and the claims, practices, and entitlements that configure them as a new type of asset. We undertake this analysis through a research-creation process by summarizing and discussing the process of creating and submitting an NFT to a specialized marketplace.

Introducing a droit de suite through NFTs in Japan: legal hurdles

Abstract The Droit de Suite (DDS), designed to offer heightened protection for artists, remains absent from Japan’s legislative framework, potentially creating disparities among creators. The implementation of DDS in Japan encounters hurdles due to its administration’s intricate nature and associated costs. Non-Fungible Tokens (NFTs) have emerged as a promising solution, streamlining DDS processes through token transactions and obviating the need for time-intensive identification procedures. Japanese NFT exchange platforms have already begun providing DDS services, contributing to a more efficient and equitable system. This article delves into the legal complexities of integrating NFTs into the DDS structure, examining their enforceability in Japanese courts and evaluating the efficacy of tokenization within the country. While the discussion is primarily theoretical, the paper explores the concept of DDS, scrutinizes the essence and validity of NFT technology’s cornerstone—smart contracts, and explores the nuances of NFT transfers in Japan, a pivotal element for DDS implementation.

New immersive alcohol marketing and commerce in metaverse environments.

The study aims are to: (i) explore methods for identifying alcohol company marketing in metaverses; (ii) identify current types of alcohol marketing in metaverses; and (iii) identify dominant portrayals and meanings of alcohol marketing in these settings. Our design was exploratory, employing various approaches to identify alcohol company marketing across multiple metaverses. In stage one, we systematically navigated through metaverses as an avatar, documenting and coding all instances of alcohol company marketing. In stage two, the research team collaboratively explored and discussed excerpts of this marketing. The team thematically analysed the transcribed discussion, identifying key meanings and interpretations of immersive and interactive alcohol marketing. Stage one: alcohol company marketing was identified in two metaverses, Decentraland and Sandbox. Within those metaverses were five alcohol company marketing experiences: Heineken Silver, Jose Cuervo Tequila, Wisher Vodka, San Matias Tequila, and Mason Martell Cognac. Marketing strategies included immersive commerce, virtual drinking, immersive branding, immersive engagement, gaming, non-fungible tokens (digital assets), education, non-player characters promoting brands and virtual event-based marketing. Stage two: themes identified were: (i) immersive branding, representing continued exposure to brands that were both foregrounded and on the edge of users' awareness; (ii) immersive engagement, including alcohol-related gaming, quests, and alcohol production; (iii) avatars simulating drinking behaviour (virtual drinking); and (iv) immersive commerce representing how metaverse alcohol marketing may drive alcohol transactions. Alcohol companies are using novel immersive marketing techniques in metaverses. The impact on the experiences and drinking behaviours of users are unknown and require investigation.

NFT-Based Framework for Digital Twin Management in Aviation Component Lifecycle Tracking

The paper presents a novel framework for implementing decentralized algorithms based on non-fungible tokens (NFTs) for digital twin management in aviation, with a focus on component lifecycle tracking. The proposed approach uses NFTs to create unique, immutable digital representations of physical aviation components capturing real-time records of a component’s entire lifecycle, from manufacture to retirement. This paper outlines detailed workflows for key processes, including part tracking, maintenance records, certification and compliance, supply chain management, flight logs, ownership and leasing, technical documentation, and quality assurance. This paper introduces a class of algorithms designed to manage the complex relationships between physical components, their digital twins, and associated NFTs. A unified model is presented to demonstrate how NFTs are created and updated across various stages of a component’s lifecycle, ensuring data integrity, regulatory compliance, and operational efficiency. This paper also discusses the architecture of the proposed system, exploring the relationships between data sources, digital twins, blockchain, NFTs, and other critical components. It further examines the main challenges of the NFT-based approach and outlines future research directions.

Examining the Impact of Digital Economy on Consumer Preferences in the Metaverse Era: An Empirical Study on the Role of NFTs and Tokenization in Changing Purchase Intentions

This study aims to investigate the impact of the digital economy on consumer preferences in the Metaverse era, focusing on the role of Non-Fungible Tokens (NFTs) and tokenization in changing purchase intentions. Using a mixed-methods approach, this study combines quantitative and qualitative analysis to gain a comprehensive understanding of the key determinants of consumer purchase intentions in a rapidly evolving digital context. The results of the quantitative analysis show that perceived value, trust in blockchain technology, and user experience significantly influence consumer purchase intentions towards NFTs. Qualitative analysis through in-depth interviews reveals that scarcity, digital ownership, and community involvement are the main factors driving NFT adoption, while lack of technological understanding and regulatory uncertainty are the main barriers. This study also introduces novelty through the use of machine learning-based sentiment analysis and social network analysis to explore the role of social interactions in the formation of purchase intentions. These findings make important contributions to the literature on the digital economy by offering new insights into consumer dynamics in the Metaverse and highlighting the need for marketing strategies that focus on creating community value and immersive user experiences. Practical implications of this study include the need for consumer education and clear regulations to increase NFT adoption, as well as marketing strategies that leverage the emotional value and scarcity of digital assets. This research contributes to a better understanding of consumer behavior in the digital age and offers recommendations for further research in this area.

Identifying NFT consumer segments: a consumption value theory and luxury perspective

PurposeThe present research takes a qualitative approach to examine young adult consumers’ perceptions and intentions toward non-fungible tokens (NFTs). The goal of the study is to identify consumer sub-segments of young adults based on their perceptions of/intentions toward NFTs.Design/methodology/approachThis research utilized qualitative/thematic analysis.FindingsThe results revealed three sub-segments of young adults with different perceptions of NFTs. The largest group, Authenticators, perceive NFTs as luxurious digital possessions that are prestigious, have premium prices and are high quality. They are most likely to be early/late majority, but some are innovators/early adopters. The second-largest group, Pessimists, hold negative views about NFTs, seeing them as fads, silly and/or a waste of time and believing that investing in them is risky. These individuals are most likely to be laggards in terms of adoption. The smallest group, Futurists, hold forward-thinking views about NFTs. They are most likely to see themselves as innovators/early adopters, think of NFTs as the future of asset ownership, investment and digital life, and do not perceive them as overly risky.Originality/valueThe findings add to the scant literature on NFTs in marketing by documenting three potential sub-segments of young adult consumers for NFTs. NFT marketers should take care in effectively marketing NFTs’ value and addressing their risks to consumers as they relate to the identified consumer segments.

A Study on the Impact of Indian Taxation on Virtual Digital Assets in India

The study explores the implications of India's taxation policies on Virtual Digital Assets (VDAs), including crypto currencies and non-fungible tokens (NFTs). With the introduction of the Finance Act of 2022, which imposed a 30% tax on VDA profits and a 1% Tax Deducted at Source (TDS) on transactions, the digital asset landscape in India has undergone significant shifts. This research examines the economic and behavioural impact of these regulations on individual investors, start-ups, and the broader VDA ecosystem. The findings suggest that the flat tax rate and TDS have led to reduced market liquidity and deterred small-scale traders, highlighting challenges in compliance and record-keeping. However, these measures also formalize the VDA market, potentially attracting institutional investors by providing regulatory clarity. The study identifies gaps in the current policies and offers recommendations to balance regulation with market growth, ensuring a sustainable future for India's VDA sector.

Consumer preferences for the visual presentation of non-fungible tokens (NFTs) of luxury products: The role of perceived authenticity

Non-fungible tokens (NFTs) are increasingly used to safeguard luxury products from counterfeits. Despite their increasing adoption, limited research has investigated how brands should communicate the use of NFTs—a novel and complex concept for consumers to comprehend—to maximize their benefits. This research aims to examine this gap by highlighting that the ease of visualization is critical for effective communication. Study 1A demonstrated that consumers prefer a visualized NFT to a non-visualized one for authenticating a luxury product. Study 1B further demonstrated that consumers place greater trust in a visualized NFT and are willing to pay higher prices for luxury products that utilize it. Study 2 demonstrated that consumers have more favorable attitudes toward a luxury product that features an easy-to-visualize NFT than those with a difficult-to-visualize NFT and that perceived authenticity mediates this effect. Finally, Study 3 demonstrated that the positive impacts of easy-to-visualize NFT cues were more significant for luxury than non-luxury products. Subsequently, this study suggests an effective communication strategy for NFT use and provides managerial implications for luxury brands aiming to maximize the benefits of using NFTs.

Time-frequency comovements between news sentiments, Non-fungible tokens, and DeFi assets: evidence from the wavelet analysis

ABSTRACT Growth in digitalization has created a potential boost for Non-fungible tokens (NFTs) and decentralized finance (DeFis) assets in the modern world. Therefore, this study aims to examine the comovement between the recently developed comprehensive measure of news sentiment index (NSI) and selected digital assets. For this purpose, we have utilized the wavelet transform, wavelet correlation, and wavelet coherence econometric model to assess interdependency in both time and frequency between news sentiments and digital assets. Our wavelet correlation and covariance results suggest that almost all the digital assets exhibit a negative relationship with NSI. Moreover, the wavelet coherence results confirm that there is no significant comovement in the short to medium-term horizon, suggesting that both NFTs and DeFi can be used as hedges against the NSI. Furthermore, we observe small patches of significant negative comovement between NSI and digital assets in the long term, which correspond to the initial days of COVID-19. Our results confirm selected digital assets’ hedging role against news-driven uncertainty. This study finding provides essential information to policymakers, international investors, and investment managers to make effective decisions.

Blockchain Technology: Unlocking New Frontiers in Data Management and Transparency

This article explores the transformative potential of blockchain technology in revolutionizing data management and enhancing transparency across various industries. As a decentralized, immutable ledger system, blockchain offers a secure and efficient way to record, share, and verify information, eliminating the need for intermediaries and reducing the risk of fraud. The article reviews the fundamental principles of blockchain, including distributed consensus, cryptographic security, and smart contracts, to highlight how these features improve data integrity and trust in digital transactions. Through case studies in sectors such as finance, supply chain management, healthcare, and government services, the article demonstrates how blockchain can streamline operations, reduce costs, and promote accountability. Particular attention is given to the role of blockchain in improving transparency by providing an auditable and tamper-proof record of transactions, which is especially valuable in industries prone to corruption and data manipulation. The article also addresses the challenges facing blockchain adoption, including scalability issues, regulatory concerns, and the need for standardization. Additionally, the potential of blockchain in emerging applications, such as decentralized finance (DeFi) and non-fungible tokens (NFTs), is discussed, highlighting the technology’s expanding role in reshaping digital economies. The article concludes by emphasizing that while blockchain is still in its developmental stages, its ability to foster greater transparency and more secure data management systems positions it as a key driver of innovation in the digital age. Future research is recommended to explore further integration strategies and address challenges in widespread blockchain adoption.

Tailoring customer segmentation strategies for luxury brands in the NFT market – The case of SUPERGUCCI

This study navigates the intersection of luxury fashion brands and Non-Fungible Tokens (NFTs) in the digital realm. By examining customer segments within the luxury NFT market, this study unfolds insights into changing market trends, consumer behaviors, and brand strategies. Employing data mining approaches, XPath analysis and the k-means clustering algorithm, this study examines user characteristics and behavior on the OpenSea platform, the largest NFT marketplace, with a specific focus on the SUPERGUCCI NFT collection by Gucci. This study identifies three distinct clusters, namely, speculators, casual collectors, and cryptocurrency natives, as well as their characteristics and behavior. The findings illustrate the significant impact of NFTs on customer segmentation and engagement, offering strategic insights for luxury brands navigating technological advancements. As the luxury sector evolves, this study enhances understanding of NFTs' role in consumer engagement and retail strategy within the digital age.

Sustainable digital fashion in a metaverse ecosystem

The fashion industry ranks among the top polluters globally, yet the emergence of virtual worlds offers a chance for brands to switch to digital clothing as a greener option. This research explores whether the metaverse can enhance sustainability in fashion or worsen environmental issues, especially those linked to non-fungible tokens (NFTs). We introduce a game theory model to analyze the strategic dynamics between brand manufacturers and digital fashion platforms, factoring in platforms' abilities to reduce emissions. The model uncovers how these uncertainties influence pricing, investment, and performance outcomes. Our analysis is supported by a case study on DressX, a prominent digital fashion platform, showing that digital fashion brings technological innovation and environmental advantages. Platforms with greater emission reduction capacities and their collaborators witness increased revenues. However, information asymmetry complicates strategic decision-making, and the environmental implications of digital technologies underpinning the metaverse remain a critical concern. Platforms with advanced capabilities gain a competitive edge by managing costs effectively, whereas manufacturers profit at the platforms' expense. However, there is a strategic equilibrium that benefits both sides. Our study indicates that maximizing the environmental benefits of digital fashion demands responsible actions from all stakeholders, including careful technology selection, clear communication of capabilities, cost management, and strategic cooperation. Our game theory approach, combined with a real-world case study, provides a unique perspective on the strategic and environmental dynamics of digital fashion in the metaverse, contributing to the growing body of literature on sustainable fashion and digital ecosystems.

The impact of digital fashion marketing on purchase intention

PurposeThis study aims to examine the effect of digital fashion marketing on consumer purchase intentions. Rooted in the stimulus–organism–response framework, it explores how digital marketing strategies in the fashion industry influence consumer attitudes and satisfaction, ultimately affecting their purchasing decisions.Design/methodology/approachIt is mainly focused on the attitudes, satisfaction, and purchase intentions of young consumers in China and South Korea toward fashion brands stimulated by digital fashion shows and non-fungible tokens. This study modifies the research model through case studies, collects data through questionnaires, and analyzes the data using fsQCA and AMOS.FindingsThe findings of the fsQCA study show that stimuli impact consumers’ attitudes, satisfaction, involvement, and willingness to rewatch. The multigroup analysis shows that social norms and images have a greater influence on individuals in China, whereas Korea has a higher direct effect of individual involvement on consumption behavior.Originality/valueThe study is useful for global fashion brands because it emphasizes the role of digital innovations in shaping consumer–brand relationships and makes strategic recommendations for sustainable growth in the digital fashion landscape.

Ownership in the 21st century: property law of digital assets

ABSTRACT ‘If buying isn’t owning, then piracy isn’t stealing,’ is a common refrain on the internet. With this in mind, the article delves into the landscape of property rights concerning digital assets, debunks common misconceptions and clarifies their legal position in the evolving economy. Through an analysis of their intangible nature, the article argues that digital assets are more akin to intellectual property than to tangible assets. Drawing on a spectrum of case law recognising digital assets as objects of property rights, it examines property law in various legal systems, ranging from common law jurisdictions such as the United States, the United Kingdom and New Zealand, to civil law systems such as Germany, China and Poland. It also explores the notion of digital assets as contractual claims and navigates the complexities of conflicts of laws, advocating for a universal framework to protect digital property and data ownership beyond the realm of Non-Fungible Tokens (NFTs).

Rarity, the WTA-WTP disparity, and price adjustments in the NFT market

Non-fungible tokens (NFTs) have become popular and are frequently traded in marketplaces. The current study examines how an NFT’s within-collection rarity influences sellers’ and buyers’ pricing and pricing dynamics. Relying on the pricing history of CryptoPunks, one of the most famous and valuable NFT collections, we find that rarity’s positive impact on willingness to accept is greater than on willingness to pay, which generates a larger pricing disparity. We further examine rarity’s impact on subsequent price adjustments and find that as rarity increases, buyers are more inclined to make greater price concessions, and sellers are reluctant to reduce their prices. Results also show that rarity’s positive impact on pricing is moderated by the NFT’s past ownership, agents’ trading experiences, and agents’ average holding periods for previous NFTs. Finally, an experiment reveals the mediating role of the focus on rarity that sellers tend to consider more about the NFT’s rarity than buyers, and therefore rarity’s positive impact on pricing is more salient for sellers than buyers.

NFT: An Episode in Digital Arts

The development of digital art has been marked by numerous transformative phases, with the rise of NFTs (non-fungible tokens) representing a pivotal moment in its evolution. This paper posits that the ascent of NFT art is closely linked to the COVID-19 pandemic, which catalyzed a shift towards digital mediums and redefined the relationship between art and technology. NFTs not only revolutionized the creation, distribution, and monetization of digital art by embedding databases and data archives into the artwork itself, but they also challenged traditional notions of ownership and value in the art world. This study examines how NFTs altered the perception of digital art, particularly during the pandemic, and investigates the factors contributing to the subsequent decline in their prominence after the initial surge of interest.

An Analysis of the Adaptability of Switzerland’s Financial Regulatory Framework to Blockchain and Digital Currency Innovations

Switzerland has emerged as a global leader in the regulation of blockchain technology and digital currencies, attracting numerous blockchain startups and investors to its “Crypto Valley.” This paper provides an in-depth analysis of Switzerland’s financial regulatory framework, examining its adaptability to blockchain and digital currency innovations. The study highlights the proactive stance of the Swiss Financial Market Supervisory Authority (FINMA) and the enactment of the Blockchain Act, which have created a flexible and forward-thinking legal environment. Furthermore, the paper explores the opportunities afforded by Switzerland’s regulatory framework, such as legal certainty, privacy protection, and access to European markets. However, it also addresses the challenges that remain, including regulatory arbitrage, scalability issues, and the unique regulatory complexities introduced by decentralized finance (DeFi) and non-fungible tokens (NFTs). The findings suggest that while Switzerland has built a conducive ecosystem for blockchain innovation, it must continue to adapt its regulatory framework to maintain its leadership position in an ever-evolving global landscape.