[In-Depth Look] Digital Commemorative Stamps, the Future of 'NFT'

Recently, Collins, a representative dictionary in the UK, selected "NFT" (non-fungible token) as the Word of the Year for 2021. In Korea, not long ago, Go player Lee Sedol issued NFTs of the four games he won out of five matches against Google's AI AlphaGo, which were sold at a winning bid of 250 million KRW. Overseas, works by graffiti artist Banksy and digital artist Beeple were issued as NFTs and sold at high prices, attracting the attention of artists and investors worldwide. NFTs utilize blockchain technology but differ from traditional virtual assets by assigning a unique identification value to digital assets, making them non-interchangeable.

The origin of NFTs is often attributed to the 2017 game "CryptoKitties," developed by the American startup Dapper Labs. In this game, users breed cats with NFT attributes to create their own rare cats. At the end of 2017, a digital cat from this game was sold for about 120 million KRW, drawing significant attention. Since 2020, Dapper Labs has partnered with the NBA to provide the NFT trading platform "NBA Top Shot." On this platform, users can trade short edited highlight videos of famous players. Dapper Labs has signed a licensing agreement with the NBA and creates and sells NFTs in limited quantities to maintain scarcity.

NFTs are sometimes called a kind of "digital certificate of authenticity" because they are digital assets with unique identification tags using blockchain encryption technology. Many artists issue and sell NFTs that include ownership rights to their paintings or sculptures, making the term "digital certificate of authenticity" quite fitting. While there are various applications, the current popular form resembles digital commemorative stamps, in the author's view. However, it is much more vivid as it involves issuing videos capturing historic moments rather than being limited to paintings.

In the past, there were times in Korea when people clamored to buy commemorative stamps issued to celebrate the Olympics or special days. Many introduced stamp collecting as a hobby. Now, anyone?not just the Korea Post?can freely issue commemorative stamps in the form of NFTs, and if their scarcity or artistic value is recognized, they become objects of trade and even investment assets. Young people today show high interest in virtual assets following stocks, so it is obvious that more people will invest in things issued as NFTs. Based on new technology, NFTs combine safety, reliability, scarcity, historicity, and creativity, making them well-suited as investment targets. Dunamu (Upbit), a blockchain and fintech specialist company, recently launched an NFT trading platform, started beta services, and began auctions of artworks issued as NFTs.

The day when NFTs are used as a method to raise large-scale funds like stock issuance, funds, or real estate trust investments is not far off. The 20th presidential election is less than four months away next year. While reviewing the Public Official Election Act and Political Funds Act, it is conceivable that NFTs could be used to raise political funds alongside donations, loans (monetary consumption loans), and funds (collective investments). It is quite intriguing to see how far the future of NFTs will unfold.

Baek Juseon, Chief Attorney, Law Firm Yungpyeong