NFTs, or non-fungible tokens, have gained popularity primarily within the art world so far, but experts say it’s just the beginning in terms of where the space could be headed.
Executive Summary
Although interest in NFTs in the art world is high, insurers are hesitant to offer solutions for first-party and intellectual property coverages. Professionals familiar with the fine art insurance world and with blockchain technology explained the complications to Carrier Management Editor Elizabeth Blosfield, who is also the host of the Insurance Journal TV's Insuring Cyber Podcast. Related podcasts: EP. 21: Pushing Boundaries: Are NFTs the Next Frontier for the Fine Art Market? and EP. 22: How NFTs Can 'Break the Fourth Wall' Between Digital and Physical Assets“The art world has seen a transformation in the NFT space,” said Honor Palmer-Tomkinson, an account handler on the fine art and species team at specialty insurance broker Howden Group, in an interview with The Insuring Cyber Podcast last year. “I honestly think it’s just the tip of the iceberg. I think the potential for NFTs stretches far beyond what there is right now.”
Palmer-Tomkinson described an NFT as a token that exists within the digital space for blockchain and attaches to an asset to prove authenticity and original ownership.
“It’s like a stamp, but it proves that asset is unique and not interchangeable,” she said.
In contrast, a bitcoin is fungible, meaning it can be traded or exchanged for another. NFTs, being non-fungible, are unique and serve as certificates of authenticity for digital files, such as art, tweets, memes or even real-world items such as real estate.
