Blockchain and Crypto finance specialist Coinsilium (AQSE:COIN | OTCQB:CINGF) will enter one of the fastest-growing segments of the rapidly evolving blockchain technology market: Non-Fungible Tokens (“NFTs”).
Coinsilium has extended its deal with existing partner, Vietnam-based RedFOX, for a specially commissioned NFT project which is expected to hit the market in Q1 2021.
Major London auction house Christies is one of the latest high-net-worth providers to enter the NFT market. In October 2020 it sold an artwork of the Bitcoin creator Satoshi Nakamoto in London for a record $131,250. Ownership of the painting is represented by a non-fungible token.
What are non-fungible tokens?
‘Fungible’ is one of the main properties of money. It basically means one unit of that thing: £1, $1 or one Bitcoin, and is easily interchangeable for any other identical unit. If you lend someone £1, it doesn’t matter if you don’t get the same exact one back. You can still use the different pound coin they give you to buy stuff.
Non-fungible is the opposite. So, if you hold a non-fungible token, which represents a share in a physical artwork, the ownership record for a piece of real estate, or a digital collectible, it is part of something unique which can’t be replicated. In the non-blockchain world, an example of something non-fungible would be a plane ticket. It is unique to that date and time, and you can’t go to an airport with a different ticket on a different day and expect access to a flight.
Why is the market growing so quickly?
Providers have realised that having a digital representation of an online-only or real-world asset is of serious value. The unalterable nature of the blockchain, where ownership is recorded, also means that certification of who owns an item or where it came from can’t be faked. This is a long-unsolved problem in the art world, for example, with many forgeries and fakes.
Digital collectibles — the online-only version of Pokemon cards, for example, or sports memorabilia — are becoming very big businesses. Blockchain-based limited-edition CryptoKitties, for example, are often bought and sold for more than $100,000 each and hit $12m in sales last year.
In July 2020, the total NFT market recorded $100m in trades, a figure which has since increased by over 50% to $154m.
Entering the NFT market is a natural extension of Coinsilium’s new business development strategy to create fresh value for shareholders.
Its management believes that the RedFOX team, led by its Chief Executive Ben Fairbank, has the ideal skill set and experience to support Coinsilium with its initial NFT project and in the design and roll-out of potential subsequent projects.
Ben Fairbank, Chief Executive of RedFOX Labs, commented:
“It is an exciting time in the evolution of digital collectibles and their interoperability with games, sports, music and art, through the use of blockchain technology. Provable ownership, immutable records and data, and an emerging secondary trading market are just the beginning.”
COIN Chairman, Malcolm Pallé added:
“We identified the NFT market segment as an emerging blockchain tech opportunity with significant growth and revenue-generating potential. This is where Coinsilium is well-positioned to play to its strengths, building deep relationships and enhancing its industry profile.”
Last week, Coinsilium announced that JV partner IOV Labs also upped its stake in the Company and extended the scope of their Singapore JV, IOV Labs Asia, to pursue opportunities globally, rather than in the Asian markets alone.
“It is also most encouraging to have RedFOX as our technical partner, with their proven track record and high-profile industry status. We look forward to releasing the full details of our first commercial NFT project shortly, in readiness for the Company’s imminent relaunch as a blockchain, DeFi and crypto finance venture operator.”