Chapter 16 - The role of Non-Fungible Tokens (NFTs) in Transforming the Valuation and Ecosystem of Digital Art

Non-Fungible Token (NFTs) are holdings such as a work of art, digital media, or video which have been tokenized through a blockchain. Each NFT has its own identity which prevents them from having a same exchange value, this uniqueness confirms that a sense of scarcity is created. Furthermore, the limited availability of NFTs also extinguishes the issue of copyright infringement on digital art as well as magnifies the value of the digital content. it makes it possible for emerging artists to make a direct profit from their work, democratising access to the art market. But it also brings up issues with market instability, long-term value retention, and the possible replacement of established art institutions. And environmental footprint through energy-hungry blockchain protocols. The move towards environmentally friendly blockchain solutions offers a chance to consider how NFTs can be made to fit into global sustainability objectives. It is inferred that the user base in the Indian NFT market is anticipated to increase steadily up to an estimated 1.45m users by 2025 due to increasing interest in digital assets. This paper primarily explores how NFTs have given unparalleled opportunities for artists, collectors and investors, it focuses on provenance and monetization of the digital art market as NFTs are relatively new development which represents a major asset class as well as long-term sustainability goals. The research also analyses how NFTs promote creativity through the direct artist-to-consumer link, taking into account the integration of sustainable innovation and challenges like digital footprints. The research paper provides insights on various solutions for the challenges faced and hence showcases a viewpoint of the authors. A mixed approach has been adopted in putting together the research paper.