Non-fungible Tokens Research Articles

Investment Decision Factors of Non-Fungible Tokens in the Czech Republic: Survey

Abstract Non-fungible Tokens (NFTs), represent a revolution in the digital ownership paradigm. NFTs are a kind of digital asset built on blockchain technology, most commonly the Ethereum blockchain, that validate the uniqueness and ownership of a unique digital item in question. Each NFT carries specific information or attributes that make it original and non-fungible. Unlike cryptocurrencies like Bitcoin or Ethereum, which are identical to each other, non-fungible tokens cannot be exchanged on a like-for-like basis making them non-fungible. NFTs are traded for cryptocurrencies via online trading platforms. Investment in NFTs can present a risky situation due to the large volatility of the assets in a quite short time. This article focuses on identification of key aspects that influence decision making process of potential investors who are considering buying non-fungible tokens as an investment tool in the Czech Republic. From the point of view of investment decision-making, the primary factors appear to be the expected income from the investment, its payback period, and the risk that the investor undertakes. It has been proven that there is a degree of dependence between gender and the mentioned decision-making factors. The research showed that men are more inclined to make decisions based on expected returns, while women are more likely to make decisions based on perceived risk.

Tail risk modelling of cryptocurrencies, gold, non-fungible token, and stocks

We present tail risk analysis of cryptocurrencies (Bitcoin, Ethereum and Litecoin), non-fungible tokens, stocks (FTSE 100 and S&P 500) and Gold from November 12, 2017 to March 31, 2022 using conditional model-based Value-at-Risk (VaR). We explored which model specification and distributional innovation could best capture the tail risk in these assets. Using the VaR and other risk metrics, we showed that there is no superior model/metric for capturing tail risk. We found that, for all the assets, non-Gaussian distributional assumptions best modelled the asymmetry and fat-tails in the distributions of the returns; though there was more homogeneity in the distributional assumptions for Gold unlike the other assets. Our research is crucial for internal risk modelling and may increase global investor confidence for those who blend conventional and unconventional assets. Also, this study can help investors make informed decisions about asset allocation and risk tolerance in the events of extreme market conditions. Understanding the tail risks in financial assets can help investors hedge and diversify against risk in their portfolios. The theoretical implications also show a trade-off between the different assets as the presence of tail risk reflect the potential of returns, yet possible losses in the presence of extreme events. Last, the findings reinforce the need for risk managers to re-focus their attention to a set of superior models rather than a single best model for risk assessment.

A note on the determinants of non‐fungible tokens returns

AbstractWe aim to identify the determinants of non‐fungible tokens (NFTs) returns. The 10 most popular NFTs based on their price, trading volume, and market capitalisation are examined. Twenty‐three potential drivers of the returns of each NFT are considered. We employ a Bayesian LASSO model which takes into account stochastic volatility and leverage effect. The results indicate that NFTs returns are primarily driven by volatility and ethereum returns. We find a weak connection between NFTs returns and conventional assets, such as stock, oil, and gold markets.

TrenchX An Integrated Marketplace for Secure E-Commerce and NFT Transactions

TrenchX stands as a groundbreaking initiative at the intersection of e-commerce and blockchain technology, dedicated to empowering artists, entrepreneurs, and users in the digital marketplace. Leveraging the decentralized and transparent nature of blockchain, TrenchX offers a user-friendly platform for creating, managing, and trading Non-Fungible Tokens (NFTs). These NFTs, powered by smart contracts, serve as unique digital assets representing ownership of various forms of digital content, including artworks, collectibles, and more. By seamlessly bridging traditional e-commerce with blockchain innovation, TrenchX provides a secure and transparent environment for individual creators and businesses to thrive alongside their conventional counterparts. The project's objectives are multifaceted, aiming to democratize access to the digital marketplace, ensure transparent and fair transactions, and foster a vibrant, community-driven ecosystem of creativity and entrepreneurship. Through a comprehensive exploration of its technical architecture, implementation strategies, and potential impacts, this research paper endeavors to shed light on the transformative potential of TrenchX in revolutionizing e-commerce and empowering creators in the digital age. Keywords: Blockchain Technology, Decentralized Platform, E-commerce, Non-Fungible Tokens (NFT) Marketplace, Ethereum, Security and Privacy, Transparent Exchanges.

Consumer Perceptions and Decision-Making in the Non-Fungible Token (NFT)

This study investigates how consumer perceptions affect decision-making in the purchase of Non-Fungible Tokens (NFTs), providing a detailed analysis of the factors driving consumer behavior in this emerging market. Using a mixed-methods approach, this study conducted surveys and interviews with NFT purchasers to capture a comprehensive view of their decision-making processes. Our findings reveal that factors such as perceived value, trust in blockchain technology, and the influence of community engagement significantly impact purchasing intentions. These insights contribute to the existing literature by delineating specific consumer behaviors and motivations in the NFT space, highlighting the importance of community trust and perceived technological robustness. Additionally, the study offers practical implications for businesses in the NFT sector, suggesting that establishing strong, credible relationships within the NFT community, and staying abreast of technological advancements are pivotal strategies for maintaining a competitive advantage. By integrating with NFT communities and leaders, businesses can glean trends and collaborative opportunities, fostering innovation, and market leadership in the dynamic NFT landscape.

Efficient Use of Biological Data in the Web 3.0 Era by Applying Nonfungible Token Technology.

CryptoKitties, a trendy game on Ethereum that is an open-source public blockchain platform with a smart contract function, brought nonfungible tokens (NFTs) into the public eye in 2017. NFTs are popular because of their nonfungible properties and their unique and irreplaceable nature in the real world. The embryonic form of NFTs can be traced back to a P2P network protocol improved based on Bitcoin in 2012 that can realize decentralized digital asset transactions. NFTs have recently gained much attention and have shown an unprecedented explosive growth trend. Herein, the concept of digital asset NFTs is introduced into the medical and health field to conduct a subversive discussion on biobank operations. By converting biomedical data into NFTs, the collection and circulation of samples can be accelerated, and the transformation of resources can be promoted. In conclusion, the biobank can achieve sustainable development through "decentralization."

Behind the bubble: Exploring the motivations of NFT buyers

Non-fungible tokens (NFTs) represent a multibillion-dollar global market. While considerable speculation exists about the future utility of NFTs, there has been limited research into the consumer behaviors of market participants. This research paper examines the motivations of NFT buyers through the lens of self-determination theory. Using a sample of 482 participants, the authors tested a conceptual framework to better understand both NFT buyers' intrinsic and extrinsic motivations. This study expands the literature on NFTs in three different ways: i) it is the first study, as far as we know, to focus exclusively on NFT buyers and their motivations in purchasing NFTs; ii) it explores a variety of potential motivations theorized in the literature; and iii) it tests the expected future value of NFTs as both a motivation and as a moderator for NFT buyers. The authors determined that intrinsic motivation had the most substantial effect on purchase intention, and the expectations of NFTs’ future value positively moderated the effect of amotivation on purchase intention. In contrast, high expectations of future value moderated the effect of external regulation on purchase intention. The results suggest that NFT buyers are not as impacted by potential social or monetary gain as often characterized in the academic literature but behave more like traditional buyers of luxury goods.

Beyond Scarcity: A Social Value-Based Lens for NFT Pricing

Abstract Over the last half-century, consumer research has often depicted scarcity as a dominant factor increasing price. But should we assume that scarcity’s upward pressure on price remains intact, in a world where novel forms of digital products proliferate? In this article, we propose that blockchain-encrypted digital goods, in particular, non-fungible tokens (NFTs), offer good reason to revisit this assumption. In this context, we argue and find that social value can outweigh intrinsic value as a determinant of willingness-to-pay. As a result, when scarcity threatens access to high levels of social value, its effect on price can be negative rather than positive—an inversion of a pattern typically observed for offline collectibles. Secondary data taken from the NFT platform Opensea and a set of experimental studies support this social value-based lens. Given these findings, we propose a research agenda to ground future work in this area. We also suggest that NFTs offer a laboratory in which past theories related to social value, scarcity, and price can be reconsidered and future theories developed, hopefully allowing consumer researchers to lead knowledge development in these domains over the next 50 years.

Formalizing IOTA Extended UTXO in Isabelle

The IOTA Extended UTXO (IOTA EUTXO) model extends the UTXO blockchain to include features like smart contracts and non-fungible tokens. In this work, we show that the IOTA EUTXO model maintains the base correctness properties of the UTXO model while extending it with extra functionality. We achieve this by specifying and verifying the essential concepts of the base UTXO model and the extensions proposed by IOTA using the Isabelle proof assistant. The specification is designed to be modular and extensible, meaning it can be used as a foundation for further research of the UTXO and IOTA EUTXO models.

E-COMMERCE MANAGEMENT USING WEB3 TECH

Blockchain and NFT tokens will play an important role in the technology sector in the near future, and this process may help us to prevent scams in online exchange products as well as generate worthy trust in society. Hundreds of complaints have been filed in which the buyer or seller claimed to be defense personnel and displayed fake ID proofs to gain trust. Because Traditional Marketplace currently lacks a feature for reviewing sellers, users who want to buy products have little doubt about whether the seller can be trusted with the items they sell. Users can use it to determine whether a seller is reliable or not. Also, as a reference for purchasing items from the seller using NFT tokens. The Web3 is advancing more quickly in our society. Hopefully, it will have the widest possible audience for its reliable exchange, ownership transparency, and certified products. An NFT marketplace is a gateway to trade digital assets.The latest web assets, from simple artwork to expensive asset exchange, are available for purchase and sale on the NFT marketplace. Non-fungible tokens' ownership verification capabilities are their main advantage. Given that they are on a blockchain network, NFTs can help to link ownership to a single account. Since the blockchain can permanently store information about the product, checking for rarity and authenticity will soon be a thing on physical products too. In the rapidly evolving landscape of online marketplaces, the emergence of NFT (Non-Fungible Token) technology has ushered in a new era for both the sale of new and used products. This abstract delves into the dynamics of an NFT marketplace that caters to a diverse range of commodities, offering a seamless platform for buyers and sellers alike. This innovative marketplace leverages blockchain technology to tokenize both new and used products, providing each item with a unique digital identity that is securely stored on the blockchain. The use of NFTs ensures authenticity and provenance, instilling trust among users and mitigating the risk of counterfeit goods. The platform employs smart contracts to automate transactions, streamlining the buying and selling process while reducing the need for intermediaries.

Legal Issues About NFTs

This paper investigates some of the legal issues related to non-fungible tokens, i.e. NFTs. The main feature of non-fungible tokens is their uniqueness together with the possibility of representing any digital resource on a blockchain, thus making it demonstrable and economically evaluable. From a legal point of view, this kind of instrument is alluring even though many look at it with uncertainty. As with any emerging technology, NFTs also present legal issues which need to be addressed as the market continues to grow. These problems deal with the legal nature of NFTs arising the doubt if they are securities or not. One more issue is the potential applicability to non-fungible tokens of the first sale rule. Furthermore, the problems involved also extend to other areas of law. In fact, both issuers and buyers need to be protected. Regarding issuers, the issue of an NFT may require the drafting of an additional contract with a specialised entity. On the other hand, buyers must be adequately informed of the purchase transaction. It follows that all the parties must be aware of the legal challenges involved and work towards establishing best practices and industry standards to address them. Additionally, it is necessary to issue specific legislation that regulates every aspect of the purchase. Received: 10 February 2024 / Accepted: 29 March 2024 / Published: 5 May 2024

Digital twins and dynamic NFTs for blockchain-based crowdsourced last-mile delivery

In this paper, we propose a blockchain-based crowdsourcing framework leveraging Digital Twins (DTs) and dynamic Non-Fungible Tokens (NFTs) for a transparent last-mile delivery. Existing works propose package delivery through crowdsourced workers managed by centralized or blockchain-based platforms. While the centralized platforms suffer from data security and reliability vulnerabilities, the blockchain-based platforms lack real-time and transparent package status monitoring. The availability of immediate access to status updates and early warnings regarding package storage conditions greatly contributes to ensuring the safe delivery of sensitive packages and preventing spoilage or further damage. As a solution, we propose a decentralized crowdsourcing platform for last-mile delivery utilizing Ethereum smart contracts and DTs for both the packages and the workers. The contracts are leveraged to facilitate interactions between the requesters and workers, and securely execute the task allocation mechanism, which relies on a computed Quality-of-Service (QoS) metric. The package DTs are proposed to oversee the package status and promptly alert workers’ DTs when delivery conditions are violated. To ensure data integrity and prevent malicious alterations, the DTs’ data is securely stored using NFTs. Upon task completion, a calculated Quality-of-Delivery (QoD) acts as a feedback loop in updating workers’ reputations. The proposed allocation mechanism is benchmarked against distance-based and preferences-based allocation mechanisms where our framework improves the average QoS by 76%, average QoD by 22%, and quality of selected workers by 11%. In addition, the DTs are implemented to verify alert generation through a use case. We provide a detailed cost analysis of deployed smart contracts, along with insights into current limitations and proposed mitigation strategies.

Oops! The Unfortunate (but Basic) Error in the New UCC Article 12

The Uniform Law Commission and American Law Institute have recognized the need for commercial law to govern digital transactions and responded with the proposed addition of a new article to the Uniform Commercial Code (the “Code” or “UCC”), Article 12. Article 12 will govern the transfer of property rights in a particular category of digital assets (controllable electronic records), which would include commonly known digital assets, such as bitcoin and non-fungible tokens (“NFTs”). Although the addition of Article 12 should provide more certainty in transactions involving current and emerging technologies, there is a fundamental problem with the article as it is currently drafted, which, left unresolved, will instead invite legal uncertainty and litigation. The problem is the drafters’ choice to cast the “qualifying purchaser” in the role of the dramatis personae of Article 12. Article 12’s “qualifying purchaser” benefits from a generous rule that allows them to take controllable electronic records free from competing claims. The drafters include a person who obtains a controllable electronic record from a thief or hacker as someone who could be a “qualifying purchaser.” However, in order to be a “purchaser” under the current definition in the UCC, a person must take through a transaction that creates an interest in property. Thieves and hackers obtain no property interest when they steal a controllable electronic record, so a person who takes a controllable electronic record from a hacker could not be participating in a transaction that creates an interest in property. Thus, they could not be a “qualifying purchaser,” as the drafters claim. Most of the uncertainty of the result could have been avoided had the drafters chosen a term other than “purchaser” to describe the beneficiary of Article 12’s liberal take-free rule and defined it in a manner that would effectuate the drafters’ statutory aim. However, despite making the drafters aware of this glaring issue, they have failed to remedy the mistake. This is unfortunate and will likely lead to legal uncertainty and, thus, needless litigation after the article’s enactment. Why rely on courts to tweak sections of the Code if ambiguities are recognized and can be eliminated by careful drafting? If inartful statutory drafting is a source of uncertainty that can easily be reduced without offsetting social costs, efforts should be made to do so.

Beyond Traditional Intellectual Property: Rise of Non-Fungible Tokens (NFTs) and Role of Blockchain in Protecting Digital Art

Beyond Traditional Intellectual Property: Rise of Non-Fungible Tokens (NFTs) and Role of Blockchain in Protecting Digital Art

Using Web3 technologies to represent personalized consumer taste preferences in whiskies

The emergence of Web3 technologies in the recent decade offers innovative tools and protocols that can revolutionize market research, which faces the ongoing challenges of comprehending consumer needs. One possibility is to securely store and represent personalized consumer preferences. This manuscript illustrates the application of Non-Fungible Tokens (NFTs) as a means to present consumer preference data and deliver personalized product recommendations directly to consumers. To do this, we initiated a study involving a small group of 31 respondents who participated in the “What’s Your Whisky” survey. Their responses were transformed into unique pieces of artwork generated by an algorithm. Furthermore, whisky recommendations were derived from these survey responses and integrated into the corresponding artwork. These personalized artworks, which represent each respondent’s whisky taste preference and top whisky selection, can be minted onto a blockchain as NFTs. This process enables respondents to securely own and retain them in their digital wallets, thus creating an immutable record of their whisky taste preferences and personalized recommendations. Finally, a follow-up survey was conducted to assess the value of personalized artwork NFTs. Respondents were asked for preferences between artwork derived from their taste preferences to those with the same whisky recommendations but with randomly sourced background art. Binomial test results revealed a clear preference for artwork based on their personal affirmed that respondents favored artwork based on their personal survey responses.

Use of Non-Fungible Tokens for proof of ownership and originality of simulation model in logistics

A Non-Fungible Token (NFT) is a digital asset that is proof of ownership and originality in the digital world. It is generally a unique data unit that can be created from a digital file. But it is not just any digital file; it must be audio, video, image, or photo. This fact is mainly limiting. However, there are many other digital files for which the connection with NFT and blockchain technology would make sense. Such digital files include, among other things, various simulation models. With the development of the use of simulation models for the needs of managing multiple types of logistics processes daily, the questions of how to prevent the unauthorised copying of any simulation model and protect the copyright of its authors are coming to the fore. NFT and blockchain represent a robust technology whose possibilities of use are gradually expanding, while simulation models could be one area of their application. The paper presents the result of research that will enable the implementation of NFT and blockchain technology in simulation models. The research outcome confirmed the possibility of creating an NFT through the decentralised public blockchain XRP Ledger (XRPL) and the marketplace xrp. cafe, which can be used to verify the ownership and originality of the simulation model.

Digital credentials management system using rejectable soulbound tokens

AbstractDigital credentials are being issued by authorized entities to facilitate the digital identification of their users. Blockchain offers some inherent features that are highly advantageous for the management of credentials. Non-fungible tokens, or NFTs, might seem to be a perfect fit for the implementation of digital credentials. However, some crucial requirements for credentials are the non-transferability of the credential and that the authorized entity should receive explicit acceptance from the user who will own the new credential, which are features lacking in the current NFTs. This paper introduces a management system focused on issuing digital access credentials, enhancing traditional features by enabling the association of terms and conditions (T &C) during issuance and providing users with non-repudiation of reception evidence upon acceptance. Leveraging an enhanced version of the soulbound tokens (SBTs), called RejSBTs, introduced in our previous work, the new system guarantees non-repudiation of reception and origin proofs. Furthermore, we provide a detailed implementation of the system, including solidity smart contracts, accompanied by a comprehensive cost and security analysis.

Regulatory Approaches to NFT in Indonesia: Considering the Implementation of the French Droit De Suite System?

The development of Non-Fungible Tokens (NFT) has significantly impacted global economic trade. However, in Indonesia, the regulation surrounding NFT remains insufficient, particularly concerning law enforcement and equitable royalty distribution for commercialized artistic works. This research adopts a normative juridical approach, employing statutory, comparative, and conceptual analysis methods. Findings indicate that NFT, as three-dimensional artistic creations, fall under the protection of the Copyright Act. While Indonesia has addressed NFT regulation in various laws and government regulations, detailed provisions regarding digital transactions involving three-dimensional artworks are lacking. Moreover, inadequate legal safeguards for NFT sales underscore the pressing need for legal reform. Therefore, the adoption of Droit De Suite through legal transplantation is proposed as a prudent strategy for legal modification, offering numerous normative and operational benefits. Droit De Suite is a principle born from the Berne Convention, where the requirement to apply Droit De Suite is that the state must give permission or legally recognize that the state has been regulated in its legislation. In addition, Droit De Suite is the right given to the artist or creator and his heirs to resell copyrighted works that have been produced previously, so that the creator's heirs are entitled to a share of the resale of a work. This approach holds promise for enhancing the legal framework surrounding NFTs and promoting fair treatment of artists and stakeholders in Indonesia's digital economy landscape.

Security and Ownership in User-Defined Data Meshes

Data meshes are an approach to data architecture and organization that treats data as a product and focuses on decentralizing data ownership and access. It has recently emerged as a field that presents quite a few challenges related to data ownership, governance, security, monitoring, and observability. To address these challenges, this paper introduces an innovative algorithmic framework leveraging data blueprints to enable the dynamic creation of data meshes and data products in response to user requests, ensuring that stakeholders have access to specific portions of the data mesh as needed. Ownership and governance concerns are addressed through a unique mechanism involving Blockchain and Non-Fungible Tokens (NFTs). This facilitates the secure and transparent transfer of data ownership, with the ability to mint time-based NFTs. By combining these advancements with the fundamental tenets of data meshes, this research offers a comprehensive solution to the challenges surrounding data ownership and governance. It empowers stakeholders to navigate the complexities of data management within a decentralized architecture, ensuring a secure, efficient, and user-centric approach to data utilization. The proposed framework is demonstrated using real-world data from a poultry meat production factory.

A blockchain-based deployment framework for protecting building design intellectual property rights in collaborative digital environments

Protecting intellectual property rights (IPR) in the architecture, engineering, and construction (AEC) industry is a long-standing challenge. In the collaborative digital environments, where multiple professionals use digital platforms such as building information modelling to collaborate on a building design, this challenge has intensified. This research harnesses the functions of blockchain technology, such as consensus mechanisms, distributed broadcasting ledgers, cryptographic algorithms, and non-fungible tokens, to propose a blockchain-based framework to protect building design IPR in the AEC industry. Adopting a design science approach, a framework is proposed and then further developed into a system that is implemented, illustrated, and evaluated in a case study. The system uses non-fungible tokens to tokenize building design IPR and deploys blockchain’s decentralized consensus mechanisms, distributed ledgers, and cryptographic algorithms to safeguard the IPR and its transactions. This prototype system is found feasible with satisfactory performance in enhancing the efficiency of IPR registration and protection, reducing cost, improving information transparency, reinforcing immutability, and preventing non-valuable registrations. Researchers and practitioners are encouraged to develop the framework for different applications such as real-life design IPR protection and design management.