It took a few minutes for Vignesh Sundaresan and Anand Venkateswaran to realize that they’d parted with $69.3 million for a digital artwork stored in a JPEG file, coincidentally securing their place in art history.
“We weren’t sure we won,” said Venkateswaran, describing the nerve-racking final moments of the online auction for a collage of 5,000 images by the artist known as Beeple. “We kept refreshing the page.”
The March 11 auction at Christie’s in London immediately made Beeple’s artwork one of the most expensive pieces ever sold by living artists, joining a well-known swimming pool painting by David Hockney and an iconic stainless steel rabbit sculpture by Jeff Koons.
Venkateswaran said he and his friend and business partner, Sundaresan, both in their 30s, are still coming to terms with their landmark purchase. They’ve also had to cope with outside concerns that the transaction could have been a convoluted scheme to inflate the value of the pair’s investment portfolio.
That’s because Venkateswaran and Sundaresan have invested heavily in a new form of digital collectible with the unwieldy name of non-fungible tokens, or NFTs. Based on cryptocurrency technology known as the blockchain, these digital items function as exclusive certificates of authenticity, making it possible to turn easily copied digital files into unique collectibles — sometimes ones worth tens of millions of dollars.
The Beeple sale broke a record for the most expensive NFT ever sold and kick-started a global conversation about NFTs, their value and whether they are a lasting addition to the digital landscape. But the eye-popping sum involved drew global headlines and some suspicions that it could have been engineered for the publicity that drew more attention to NFTs, which could boost the value of the pair’s existing holdings.
The involvement of Christie’s, a centuries-old auction house, should be sufficient to reassure skeptics, Venkateswaran said in a call from his home in southern India. “I think the bigger problem here is that people thought this would be impossible.”
That’s certainly the case with Beeple himself, who in real life is a digital artist named Mike Winkelmann. “This whole NFT thing was not something I saw coming, at all,” he said. During the auction, the artist was in his living room near Charleston, South Carolina, surrounded by family and a video crew, and said it felt like a “bomb went off in the room” as the bids quickly rose. Another bidder and cryptocurrency entrepreneur, Justin Sun, lost in the final seconds after the bids exceeded his previously set maximum.
The NFT market was already taking off, with transactions last year quadrupling to $250 million, according to a report by NonFungible.com, a website that tracks the market. The Beeple sale turbocharged that growth and helped transofrm NFTs from niche tokens mainly appealing to cryptocurrency nerds to a new type of digital asset that’s drawn mainstream attention from the art world, the music industry, sports and speculators.
Not to be outdone, auction house rival Sotheby’s plans its own NFT sale, collaborating with the pseudonymous digital artist Pak in a sale next month.
Winkelmann began seeing the possibilities of NFTs for digital artists back in October when he tested the waters with an initial “drop” of his work. “People can actually own my art and collect it and, you know, pay good money,” he said in an interview this week.
It was after another sale late last year that he reached out to one of the losing bidders, Sundaresan, who uses the pseudonym Metakovan.
The art world was not a common talking point for Sundaresan and Venkateswaran when they first met in 2013 while working at The Hindu, a daily newspaper in Chennai, India. Sundaresan was a 20-something technology consultant; Venkateswaran was a journalist.
Both had humble upbringings. Sundaresan couldn’t afford a laptop when he was learning to code, so he’d walk around with a flash drive and borrow his friends’ laptops, Venkateswaran said.
But by 2020, Sundaresan, now living in Singapore, had made himself rich on a series of cryptocurrency ventures and investments. With Sundaresan’s money and Venkateswaran’s analytical eye, they began exploring NFTs with a new fund called Metapurse.
Sundaresan, who declined to be interviewed this week, created the persona Metakovan as a reference to his affection for virtual worlds known as the “metaverse.” The name means “King of Meta” in the Tamil language. Venkateswaran, who lives in Chennai with his wife and two kids, calls himself Twobadour. In a blog post last week the pair revealed their true identities and sought to dispel some of the mystery about their motivations.
“The point was to show Indians and people of color that they too could be patrons, that crypto was an equalizing power between the West and the Rest, and that the global south was rising,” they wrote.
It was in December that the Metapurse pair made their first big Beeple investment, buying 20 of his works for $2.2 million and gifting the artist with 2% of their new fund of NFT tokens, called B20s, that were designed so allow large groups of people to share ownership of an art piece.
That was the precursor to March’s historic sale of Beeple’s “Everydays: the First 5000 Days,” a digital file combining works Beeple had created each day from May 2007 to the beginning of this year. Many of them are grotesque and cartoonish takes on what was happening in U.S. politics or pop culture. The works also follow Beeple’s rise from a little-known graphic designer to an internet personality with a big Instagram following and multimedia projects with pop stars like Nicki Minaj and Justin Bieber.
“If you look at each picture at face value, obviously not all of them are going to stand the test of time,” Venkateswaran said. “Not all 5,000 are masterpieces. That was never the argument. Not everything that Beeple puts out is gold. We don’t worship at his feet. That’s not what we were about. This is more about the combined narrative of what he represents.”
The purchase has shocked art and finance worlds, but in some ways was fairly conventional, said New York art lawyer Leila Amineddoleh.
“A lot of the art market is saying, ‘I own something unique, it’s scarce, I own it, look at me.’ This is not that different,” she said. “The whole value of an NFT is being able to say this is an original. You’re buying the bragging rights to say, ‘I own the token.’ But really, anyone can access the art.”
Amineddoleh said the blockchain technology that underpins NFTs and other cryptocurrency markets also provides a transparent ledger to record art transactions. But for skeptics of the largely unregulated world of cryptocurrency, the sale has invited added scrutiny.
Christie’s declined to comment on the details of the sale’s financial structure except to say that the total amount was paid in a cryptocurrency known as Ether Define, marking Christie’s first time accepting cryptocurrency as payment.
“There is obviously a money trail and Christie’s had a set of exchanges that they were willing to work with, that they vetted and approved,” Venkateswaran said. “And those are the exchanges that were used to make the payment. So Christie’s has all the information.”
Cryptocurrency exchanges can be prone to manipulative behavior, according to research co-authored by Friedhelm Victor of the Technical University of Berlin. But that typically involves investors who buy and sell the same assets repeatedly to create a fake sense of busy trading activity.
Such back-and-forth trading hasn’t yet become common with NFTs, in part because they typically carry higher fees, Victor said. “Crazy speculation is not unusual,” he said of the Beeple sale. “This is a really smart strategy to get some more attention to this whole space.”
That has most definitely happened. But Venkateswaran said the attention doesn’t mean he and Sundaresan are making a big profit off the tokens. “The math doesn’t add up,” he said.
By MATT O’BRIEN and KELVIN CHAN
Gucci digitally outfits Gen-Z in metaverse foray with Roblox
Anyone whose virtual alter ego is wandering around the Roblox online game platform these days might run into other avatars sporting Gucci handbags, sunglasses or hats.
The digital-only items were part of a limited Gucci collection for Roblox, a step by the fashion house that prides itself on Italian craftsmanship to enter an expanding virtual space where many of its youngest admirers already are at home.
Players in the metaverse — where virtual worlds, augmented reality and the internet meet — say the big-name fashion collaboration represents a new era of virtual-real world interplay, a space in which smart product placement meets the desire of consumers to express their personalities in the virtual world.
While the Gucci Garden space on Roblox was open for two weeks last month, the platform’s 42 million users could spend from $1.20 to $9 on collectible and limited-edition Gucci accessories. Items were hidden in the virtual Gucci Garden, which echoed real-world Gucci Garden exhibitions in Florence and other global cities. Some items were offered for free, and the exclusivity was underlined with limited time releases.
The experience allowed Roblox’s core demographic — roughly ages 9 to 15 — a digital entrée to the rarified world of luxury goods that few can dream of in the real world. Now that the space is closed, the limited edition items have even greater cachet. According to the developer, more than 4.5 million items were “won.”
Many parents may scratch their heads at paying real money to accessorize an avatar, but Generation Z players have long been prepped for this evolution.
They ran through physical streets and parks to intercept and capture Pokemon Go characters, part of an augmented reality mobile game that launched in 2016. Many took the edge off pandemic lockdown by playing with real-world friends over gaming platforms. On Roblox, dressing up avatars is old hat.
“Gen Z, they sometimes see virtual products as more valuable than physical products,” Christina Wootton, the vice president for brand partnerships at Roblox, said. “We are definitely seeing that on Roblox, where it is all about storytelling and self-expression. There are so many people who come together and socialize and connect with their friends, and they want to represent their digital selves through fashion.”
While the Gucci items users bought only can be “worn” on the Roblox platform, it is just the tip of the metaverse iceberg.
Similar items made and traded in the metaverse are known as non-fungible tokens (NFTs) — digital objects backed by blockchain technology certifying their authenticity, and often uniqueness. NFTs, which might be anything from personalized “skins,” or costumes, for avatars to digital art, can be traded ad-infinitum, potentially growing in value with each trade. Their ownership is not limited to any single platform.
Even on Roblox, which has its own marketplace where items can be traded, the Gucci Dionysus Bag with Bee was resold for over $4,100 worth of Robux — exceeding the price of a real Gucci Dionysus bag and a huge premium of the original price of 475 Roblox, roughly $4.75. Only 851 of the bags were available during two releases, making it the rarest piece in the collection, compared with the 2.6 million wide-brim denim hats that were snapped up for free.
Unlike NFTs, the astronomically priced Dionysus bag cannot be traded outside of the Roblox platform, making it seemingly a vanity investment for a super-fan.
The metaverse’s potential for the fashion world goes well beyond the world of gaming and extends into digital ecosystems that are still under construction. So-called decentralized worlds are seeing a huge influx of money, with billions being spent to iron out technical issues.
Boson Protocol, a technology company, is bridging the gap between the metaverse and physical world with a new venture designed to allow consumers to purchase fashion NFTs for their avatars from a platform, Decentraland. NFTs, in turn, will contain vouchers redeemable for corresponding real-world items. The project, announced Wednesday, is expected to launch in two months.
“If we increasingly are going to exist in these digital spaces, then objects that are scarce, unique and ownable, of course, are going to have value in those spaces,” London-based Boson Protocol co-founder Justin Banon said. “All of these things of social signaling in the real world are just, in fact, perhaps more important in the digital world.”
In another example of how fast this space is moving, the IMVU metaverse on Wednesday launched a marketplace featuring digital fashion as wearable NFTs for avatars on the social platform. The looks, previewed in a recent digital fashion show, include a Black Lives Matters patchwork shirt dress, I Love NY souvenir hoodie and a pink camouflage bubble jacket, each a unique NFT that will be auctioned off over the next 30 days, with bids opening at $100.
It’s only natural that fashion would pave the way for the less digitally savvy consumers, who may shy away from Bitcoin and balk at multimillion-dollar sales of NFTs that have captured the attention of artists and collectors alike.
“Fashion brands have to go where other people are not going. The whole point of a fashion brand is to stand out,” Allen Adamson, co-founder of marketing consultancy Metaforce, said.
For Gucci, the biggest return on investment from the Roblox tie-up “is to become part of that generation’s world,” Adamson said.
“No one shares ordinary,” Adamson said. “‘My avatar is wearing a Gucci belt’ is a little different” and perhaps even catchier for a certain audience than spotting a real Gucci bag on the street.
Gucci CEO Marco Bizzarri said that more than generating revenue, the Roblox collaboration was a way to tap fresh creative veins and stay apace of an evolving world where fashion, music, films and technology increasingly mashup.
“Who knows what the industry will look like in 10 years? We want to start before everyone else to get up to speed,” Bizzarri said at the physical Gucci Garden opening in Florence. “Certainly, they are not operations that bring a lot of business now, but they could be a source of business tomorrow.”
Gucci creative director Alessandro Michele described the metaverse as new “territory” to explore.
“Fashion has become more than a boutique along the street in a capital. I think we are in a phase when maybe the world wants to go beyond the industrialized revolution and doesn’t know how to do it,” Michele said. “Especially now, in this phase of the pandemic, it is a big chance to accelerate changes.”
MILAN (AP) — By COLLEEN BARRY Associated Press.
Oklahoma prison inmates to begin receiving computer tablets
Inmates at an Oklahoma prison began receiving special computer tablets this week, as part of a Department of Corrections plan to provide secure tablets to everyone incarcerated in state prisons.
The devices, specially designed by prisons communications company Securus Technologies, will include free content such as prison policies, access to a law library, some books and educational and self-help materials. Inmates can also pay to receive music, movies, games and television programs, as well as to send and receive messages, including video messages, to and from their families. The tablets do not have unrestricted access to the internet.
Usually, inmates wanting to receive educational or vocational training must be escorted to a classroom or program location. But inmates can now receive those services directly on the tablet, said Mike Carpenter, chief of technical services and operations at the Corrections Department.
“The education and programming, that’s huge for us,” Carpenter said.
On Tuesday, North Fork Correctional Center inmate Byron Robinson, who has been incarcerated since 2005 — the same year YouTube was founded — said the tablet was totally new to him.
“I’ve never even touched one of these things until today,” Robinson said. “It’s mindboggling, really, how much this thing can do.”
Similar programs allowing inmates to access secure tablets have been rolled out in other states, including Arizona, Connecticut and Utah, but Oklahoma is one of the first in the nation to combine the company’s latest tablet and operating system.
In Pinal County, Arizona, officials started distributing tablets to inmates at the state’s third-largest jail in 2019, said Matt Hedrick, deputy chief of the detention center.
“It has been phenomenal,” Hedrick said.
Besides helping to keep inmates pacified, Hedrick said the jail scans incoming letters and photographs to an inmate’s tablet, reducing the chance for contraband to come into the facility and allowing inmates to have access to more personal photographs.
“Before you had rules on how many photos they could have in their cell, how many magazines,” he said. “Now that doesn’t happen. They can have as many as they want.”
There are some drawbacks to providing inmates with tablets. According to a 2019 report from the Prison Policy Initiative, the “free” tablets frequently charge users above-market prices for services. Oklahoma’s contract with the company allows a 25-cent charge for emails and 75 cents for outbound video messages. Music can cost up to $1.99 per song or $14.99 per album, while the cost for one television episode can range from $1.70 to $2.28.
Some 21,000 inmates are currently incarcerated by the state, making the plan potentially very lucrative for Securus.
The Department of Corrections also benefits financially from the arrangement, receiving $3.5 million annually from the communications company for the first five years of the contract, and $3.75 million for the next five years.
“Our recent analysis of these contracts suggests that they actually put the interests of incarcerated people last, prioritizing cost savings and the provider’s bottom line,” the report said.
Sierra Kiplinger, who was released from prison in April, said that while inmates are excited about the new technology, she expressed concern about how much inmates have to pay to utilize the services.
” The phone calls for Securus are ridiculously high, and so I’m assuming if the phone calls are high, this is going to be even higher,” she said.
State Rep. Justin Humphrey, chairman of the House Criminal Justice and Corrections Committee, said that while he supports the program, he believes public perception could be a problem.
“I don’t think the public is going to like it when they see we’re giving all these inmates tablets and they say, ‘My kid can’t get a tablet at school,’ Humphrey said.
OKLAHOMA CITY (AP) — By SEAN MURPHY Associated Press.
Genetically modified salmon head to US dinner plates
The inaugural harvest of genetically modified salmon began this week after the pandemic delayed the sale of the first such altered animal to be cleared for human consumption in the United States, company officials said.
Several tons of salmon, engineered by biotech company AquaBounty Technologies Inc., will now head to restaurants and away-from-home dining services — where labeling as genetically engineered is not required — in the Midwest and along the East Coast, company CEO Sylvia Wulf said.
Thus far, the only customer to announce it is selling the salmon is Samuels and Son Seafood, a Philadelphia-based seafood distributor.
AquaBounty has raised its faster-growing salmon at an indoor aquaculture farm in Albany, Indiana. The fish are genetically modified to grow twice as fast as wild salmon, reaching market size — 8 to 12 pounds (3.6 to 5.4 kilograms) — in 18 months rather than 36.
The Massachusetts-based company originally planned to harvest the fish in late 2020. Wulf attributed delays to reduced demand and market price for Atlantic salmon spurred by the pandemic.
“The impact of COVID caused us to rethink our initial timeline … no one was looking for more salmon then,” she said. “We’re very excited about it now. We’ve timed the harvest with the recovery of the economy, and we know that demand is going to continue to increase.”
Although finally making its way to dinner plates, the genetically modified fish has been met by pushback from environmental advocates for years.
The international food service company Aramark in January announced its commitment to not sell such salmon, citing environmental concerns and potential impacts on Indigenous communities that harvest wild salmon.
The announcement followed similar ones by other major food service companies — Compass Group and Sodexo — and many large U.S. grocery retailers, seafood companies and restaurants. Costco, Kroger, Walmart and Whole Foods maintain that they don’t sell genetically modified or cloned salmon and would need to label them as such.
The boycott against AquaBounty salmon has largely come from activists with the Block Corporate Salmon campaign, which aims to protect wild salmon and preserve Indigenous rights to practice sustainable fishing.
“Genetically engineered salmon is a huge threat to any vision of a healthy food system. People need ways to connect with the food they’re eating, so they know where it’s coming from,” said Jon Russell, a member of the campaign and a food justice organizer with Northwest Atlantic Marine Alliance. “These fish are so new — and there’s such a loud group of people who oppose it. That’s a huge red flag to consumers.”
Wulf said she’s confident there’s an appetite for the fish.
“Most of the salmon in this country is imported, and during the pandemic, we couldn’t get products into the market,” Wulf said. “So, having a domestic source of supply that isn’t seasonal like wild salmon and that is produced in a highly-controlled, bio-secure environment is increasingly important to consumers.”
AquaBounty markets the salmon as disease- and antibiotic-free, saying its product comes with a reduced carbon footprint and none of the risk of polluting marine ecosystems like traditional sea-cage farming carries.
Despite their rapid growth, the genetically modified salmon require less food than most farmed Atlantic salmon, the company says. Biofiltration units keep water in the Indiana facility’s many 70,000-gallon (264,979-liter) tanks clean, making fish less likely to get sick or require antibiotics.
The FDA approved the AquAdvantage Salmon as “safe and effective” in 2015. It was the only genetically modified animal approved for human consumption until federal regulators approved a genetically modified pig for food and medical products in December.
In 2018, the federal agency greenlit AquaBounty’s sprawling Indiana facility, which is currently raising roughly 450 tons (408 metric tons) of salmon from eggs imported from Canada but is capable of raising more than twice that amount.
But in a shifting domestic market that increasingly values origin, health and sustainability, and wild over farmed seafood, others have a different view of the salmon, which some critics have nicknamed “Frankenfish.”
Part of the domestic pushback revolves around how the engineered fish is to be labeled under FDA guidelines. Salmon fishermen, fish farmers, wholesalers and other stakeholders want clear labeling practices to ensure that customers know they’re purchasing an engineered product.
USDA labeling law directs companies to disclose genetically-modified ingredients in food through use of a QR code, an on-package display of text or a designated symbol. Mandatory compliance with that regulation takes full effect in January, but the rules don’t apply to restaurants or food services.
Wulf said the company is committed to using “genetically engineered” labeling when its fish are sold in grocery stores in coming months.
In November, U.S. District Judge Vince Chhabria in San Francisco affirmed that the FDA had the authority to oversee genetically engineered animals and fish. But he ruled that the agency hadn’t adequately assessed the environmental consequences of AquaBounty salmon escaping into the wild.
The company argued that escape is unlikely, saying the fish are monitored 24 hours a day and contained in tanks with screens, grates, netting, pumps and chemical disinfection to prevent escape. The company’s salmon are also female and sterile, preventing them from mating.
“Our fish are actually designed to thrive in the land-based environment. That’s part of what makes them unique,” Wulf said. “And we’re proud of the fact that genetically engineered allows us to bring more of a healthy nutritious product to market in a safe, secure and sustainable way.”
Casey Smith is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
INDIANAPOLIS (AP) — By CASEY SMITH Associated Press/Report for America.
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