NEW YORK, April 7, 2021 /PRNewswire/ -- Despite COVID-19's impact on galleries, auction houses and retailers, the global art market circulated more than $50 billion in art, while other collectibles such as coins and trading cards saw record sales. Amazingly, an estimated 10% of art is stolen annually, and an estimated 50% of all sports memorabilia is estimated to be fake per the FBI. To get a flavor of just how difficult it is to know if something is stolen and replaced with a near-perfect forgery, Interpol's stolen artwork database has more than 50,000 items across 134 countries listed in it. Experts note that scams and hacks are already hitting the exploding market of digital collectables known as NFT's (non-fungible tokens). Taking the collectables world by storm, a non-fungible token is a unit of data on a blockchain ledger that represents a unique underlying asset. As with most other things, crooks flock to where the money is, and right now NFT's provide plenty of money and new vulnerabilities. That's exactly why FACT Inc. (OTCPK: FCTI) (Profile), a recognized global leader of fine art and collectible authentication technology, has recently expanded into the burgeoning NFT market. Shares of companies with interest in or association with NFT's have enjoyed a nice advance lately, including CurrencyWorks Inc. (OTCQB: CWRK), Takung Art Co. Ltd. (NYSE: TKAT), Oriental Culture Holding LTD (NASDAQ: OCG) and Jiayin Group Inc. (NASDAQ: JFIN), as investors seek exposure to the popular technology in the collectables market.
- NFT's are one of the hottest market segments today, with the combined market cap of major NFT projects increasing by 1,785% in 2021.
- FACT Inc. uses forensic technology to authenticate and analyze fine art and collectibles capturing unique hashes from the forensic data.
- FCTI is expanding into the NFT markets, using its suite of proprietary technologies to become the first company effectively linking NFT's with physical assets.
- The company secures its highly customizable data packages for clients with blockchain technology.
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NFT's Explode onto Wall Street
NFT's are digital tokens that prove the authenticity and ownership of a digital asset. An NFT is a unique file stored on a blockchain that certifies ownership of the digital asset and direct representation of the underlying asset and its value.
The "non-fungible" in NFT simply means that the token is unique and can't be replaced with something else. To lend some clarity through a physical example: a dollar bill is fungible. It can be swapped with another dollar bill and have the same function and value. A 1952 Topps Mickey Mantle rookie baseball card, the world's most expensive baseball card, which sold for $5.2 million in January, is non-fungible because there isn't another card identical to it. The same goes for a Monet painting, only it couldn't be directly linked to an NFT because it is a physical asset — that is until now.
An NFT can be anything digital: a song, a video, a GIF or even a tweet. Sports videos are spiking in value, including an NFT of a video clip of a Lebron James dunk recently selling for over $200,000. The white-hot commodity today is art, as evidenced by Mike Winkelman, a digital artist known as Beeple, selling his JPEG titled, "Everydays — The First 5000 Days" at a Christie's online auction for a stunning $69.3 million, including fees. Just as with any great piece of artwork or cultural property, replicas or copies can be made for distribution, but NFT's are the one-of-a-kind original.
With worldwide reach, FACT Inc. (OTCPK: FCTI) is revolutionizing security for the art and collectibles market. Using forensic technology presently used by global law enforcement agencies for ballistics, FACT provides products and services to authenticate and analyze fine art and collectibles. FACT offers an eponymous turnkey suite of products, called FACT, an acronym for Forensic Asset Certification Technology, for comprehensive data collection and tracking to ensure the authenticity of any item.
The software application uses blockchain, an immutable digital ledger, to store all pertinent information including authentication, condition reporting, GPS tracking and provenance data, that is available in real-time to the appropriate parties. The FACT software application is applicable to an array of customers within the fine art and collectible industry including secured lending, insurance, dealers, artists, auction houses, grading companies, and private collectors. None too soon, servicing the NFT market has been added to the FACT portfolio of offerings.
White Collar Crime Meet Next-Gen Protection
Adapted from the ballistics industry, FACT uses forensic technology and applies it to the art authentication industry. More specifically, the company has developed cutting-edge technology using noncontact, nondestructive white light interferometry, an optical method for surface height measurement to generate three-dimensional scans capturing more than 100,000 images at a resolution of two microns, a level impossible to forge. The technology is so precise that it can detect nuances such as a paint brushstroke in a forgery leaving a thicker line of paint than an original, a detail that could never be noticed even by the most trained eye.
Once a scan of a collectable is recorded, FACT isn't done by any stretch. If a valuable is to be transported, it is scanned again using FACT analytic software to verify the authenticity, tracked using GPS technology while in transit and scanned again once it arrives at its destination. All scans are recorded and stored, maintaining a constant record of condition (or changes in) and providing a library of scans for future comparisons.
First Mover: FACT's Physical Asset NFT's
With flagship operations well established, FACT is now bringing its expertise to the burgeoning NFT market, a market that has thus far been limited to digital assets. FACT's forensic technology creates the important tamper-proof link needed to tokenize a physical asset to an NFT. In other words, just as Beeple's $69-million digital image was permanently affixed to a digital token, FACT will be able to do this with a framed Picasso hanging on a wall by creating a scan using its proprietary imaging technology, a first for the industry.
The strategy is bigger than just being the first to connect physical assets with an NFT. FCTI management says it plans to not only offer NFT's as a service to FACT clients but also to partner with a platform to offer a seamless trading process to clients. If indeed some pundits are correct that NFT's will be the preeminent way to buy, sell and collect digital art, FACT is making the right move with its authentication technology combined with in-house auctions. Christie's, a 255-year-old auction house branching out into the space for the Beeple auction, certainly lends credibility to the future of the market. FCTI is positioned to bring the unique transactional benefits of NFT's to transacting physical assets changing the way buyers and sellers interact in the market forever.
The Blockchain Architecture
The totality of the existing FACT platform architecture dovetails perfectly with this expansion into NFT's. The company's system provides a secure home for all the requisite provenance records, database of scans, etc., neatly packaged and protected on the FACT blockchain. These records store all necessary documentation for seamless creation of NFT's of a tangible object or a digital recreation of the object with user-specified smart contracts for near instantaneous execution of transactions between buyers and sellers.
Securing the documentation on the blockchain is part-and-parcel to an NFT. Each NFT is customized to a client's specifications and can feature any number of complex mechanics. Usage analytics, royalties, value enhancements, restricted specified displays, capped supply and usage restrictions are only a few of the customizable options that can only be confidently protected through blockchain architecture such as that built into the FACT system.
Polishing the Edges
NFT's are a bit reminiscent of Bitcoin a number of years ago. Traders are jumping into the space simply because of the buzz word, most likely with little understanding of what they actually even are. That has provided a boon to a number of stocks as the trend is only now getting underway. Fact is, much like Bitcoin, people will be educated on NFT's gradually because it is a market squarely facing the younger generations that are deeply rooted in a digital world.
CurrencyWorks Inc. (OTC: CWRK), formerly known as ICOx Innovations, has been a pioneer in the blockchain and digital rights protection for years. The company was instrumental in the development of Kodak's first digital tokens for protecting its customers digital photo property. The Los Angeles-based company operates its CurrencyWorks Collectibles NFT platform, is working to create the first NFT for the Barrett-Jackson Auction Company and recently partnered with XTM Inc. regarding a NFT payment platform scheduled to launch this quarter.
Takung Art Co. Ltd. (NYSE: TKAT), a Hong Kong-based company, operates an online trading platform for art collectors and investors to acquire shared ownership in Asian and other fine art. Takung generates revenue via services from its online electronic platform and is experiencing improving financials underscored by a healthy art and collectable market in Asia.
Oriental Culture Holding LTD (NASDAQ: OCG) is another that has felt tremendous volatility in its stocks owing to a connection to NFT's. The company, through its Hong Kong subsidiaries, provides online collectibles and artwork e-commerce services, which allow collectors, artists, art dealers and owners to access a much bigger art trading market where they can engage with a wider range of collectibles or artwork investors.
Jiayin Group Inc. (NASDAQ: JFIN), a Chinese online individual finance marketplace, is in the same boat as TKAT and OCG insomuch that its stock has made moves in both directions because investors may be betting it is expanding into the NFT business. The crux of the conjecture is that the company has the infrastructure to facilitate transparent and fast connections between investors and borrowers, a business model that aligns with deals in the NFT markets.
According to Forbes, the combined market cap of major NFT projects has increased by 1,785% in 2021, not even a full three months into the year. New NFT's are hitting the market every single day with no signs that the craze is going to slow in the near future.
For more information about FACT Inc., please visit FACT Inc.
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