What are NFTs? Here’s what you need to know about non-fungible tokens
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Traditional auction houses have also entered the space: at a recent Christie’s sale, a digital artwork was priced at $ 69 million. Meanwhile, Sotheby’s announced this month the launch of its own NFT marketplace.
“We are in a unique position at Sotheby’s to apply our expertise and curation to the burgeoning art world for the digital native generation,” said Sebastien fahey, general manager of the auction house.
âAt the end of the day, that’s what you can get by with,â Schachter said.
That being said, the artist’s reputation, including her gallery exposure and size, are important factors, he added.
This means that the capital gain on a digital artwork held for less than a year will be taxed up to 37%, and those held for longer will be levied at a maximum rate of 28%.
One important thing to note, Chandrasekera said, is that if someone uses cryptocurrencies to purchase an NFT, they will also be subject to capital gains taxes on profits made on their digital coins.
âA lot of people don’t realize it,â he said. âThey think, ‘I just used my crypto. I did not withdraw. “People have to be very careful with this.”
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There is simply a huge overlap between those interested in digital coins and those interested in NFTs, Schachter said. “These are digital natives who live on the Internet.”
And many people who have seen the value of their cryptos skyrocket until now have had little means to spend it. It is not as easy, for example, to buy a house or a car with bitcoin or ethereum.
âThere was this crazy demand, and now all of a sudden there is something to buy,â Schachter said.
Much of the criticism of NFT comes from the traditional art world because it is afraid of disruption, Schachter explained.
“The first order of attack is to simply equate it with a currency,” Schachter said. “‘It’s just money.’ Well, what is more money than art stored in a free port that has never been seen? “
Other opponents argue that art should be seen in museums and in person, not on screens. âBut there is already dedicated hardware for watching NFTs on your desktop,â Schachter said. “It’s a stand-alone device that plays your NFTs over and over.”
Yet skeptics abound.
Anil dash, an entrepreneur who writes about NFT, said the space is dominated by people disguising their desire to make money from a passion for art.
âThese are a lot of the same people who buy meme stocks,â Dash said. “They don’t think GameStop is suddenly going to get really good at selling video games, any more than they think that ugly monkey drawing has any real dollar value.”
Schachter said buyers need to be extra careful when storing their digital artwork online, but he said it was no different from how their online bank accounts should be treated.
He said counterfeits were another problem: âAnytime there is money on the table, there will be crime. “
The main danger, however, is that you lose all your money because a digital work of art loses its value.
Meanwhile, a Museum dedicated to NFTs will soon arrive in Midtown Manhattan.
âThe genie is out of the bottle, and it’s just going to grow,â Schachter said.
Rather than replacing older art forms like sculpture and painting, he said, technology will coexist with them.
âThere will be 3D hologram projections of sculptures where you just flip a switch and he’ll be sitting in your room,â he said.