NFT: Where is the internet leading us?

Musfir Khawaja, Co-Founder

It would not be factually incorrect to assume that a considerable population of the world lives and dies while on the internet. The internet as we know has come a long way. From sending emails and messages to buying automobiles, one would think that there is not much left the internet cannot do. But industry experts say the show is just getting started because with NFTs, the internet has morphed into one big decentralized investment bank.

In simple terms, NFTs are the first step in the securitization of digital data. Most people think that NFTs are digital art, memes, music or audio but in reality, any data whose ownership is recorded on to the block chain, becomes an NFT.

You (anyone, anywhere) can sell anything digital (including images, video, audio, any other forms of digital data) by simply documenting its usage terms on to a smart contract on a block chain, creating a token out of it and then selling it to the highest bidder.

With an increase in the adoption of block chain technologies and the growing popularity of decentralized finance, NFTs have risen as a new asset class. To be fair, they are very speculative in nature. The digital data (lets for argument value assume is your photo of Dubai’s skyline) that you are selling as an NFT may or may not sell at all. There has to be a good reason for anyone to buy an NFT (Digital Asset). Lets look at some scenarios below

  1. Trader mindset: Investor buys into a digital asset because they feel its undervalued presently and will quickly appreciate in value.
  2. Collector mindset: The collector appreciates the aesthetic or collectible value of the digital asset and buys it to keep it in their collection.

For creators, NFTs open a new revenue stream. Where people earlier were collecting only physical art, digital art is fast catching up as a store of value and culture. Digital screens are everywhere, digital art is easy to load and even easier to store.

Recently, an NFT of “The Pontifex Carpet” was sold for over US$ 85,000 in Dubai, UAE.  The Pontifex carpet was gifted by the Crown Prince of Abu Dhabi Sheikh Mohamad Bin Zayed Al Nahyan to Pope Francis during a visit to the Vatican City. In September 2016, the two met to discuss the strengthening of the diplomatic relations between UAE and the Vatican as well as the promotion of inter-religious harmony.

In this scenario, the collector considers this digital asset as a store of value, culture and history at the same time. The NFT represents a watershed moment in history, a unique gift and involves two very influential people alive in this day and age.

This asset could be sold for much higher in the secondary market if a new collector decides it is imperative for them to collect this NFT for whatever reason.

Now imagine a less established creator trying to sell a photo of Dubai’s skyline as an NFT. Could it sell as an NFT? Yes, but who will buy this as a digital asset that by definition should appreciate in value over time.

The answer is a bit complicated as the buyers will be either people who believe that buying this photo is a sound financial investment and it will be highly sought after in a few months could jump at this opportunity or those who want to buy the photo as digital art and are happy to receive an in-tangible return on their investment by only looking at it or perhaps using it to fill an empty space in their otherwise empty wall.

Most buyers in the NFT space today, however, are traders who are speculating on a sharp increase in value of a certain digital asset. This could very easily turn out to be dud investments in three to six months’ time but in order to hedge their risk, these buyers hype up the value of that digital asset and then invite others to buy it from them at a higher price because they want the new buyer to believe the asset is still undervalued and soon it will appreciate even further.

If you are considering getting into the NFT space, do your own extensive research before buying a digital asset. You must have a reason to buy it.

KPMG launches second edition of global tech innovator competition

News Highlights

1). 2022 KPMG Private Enterprise Global Tech Innovator competition is being hosted in over 21 countries round the world

2). 2022 edition of Global Tech Innovator competition will find the most influential tech innovator

3). 2021 competition attracted close to 700 competitors from around the world where Natufia – a smart kitchen garden concept stood the winner of local competition

4). The final Global Tech Innovator event will be held during the Web Summit 2022 in Lisbon, Portugal

Following the acknowledged success of the 2021 edition, KPMG in Saudi Arabia has returned with another competition, to find the most influential and inspiring tech innovator of the year. The firm is looking to find technological disruptors and influencers who are helping to reshape the world and leave a positive impact, and has invited entrepreneurs and start-ups to apply.

The 2021 KPMG Global Tech Innovator competition attracted close to 700 competitors from around the world, with for the first-time applicants from Saudi Arabia. The winner of the local competition, Natufia – a smart kitchen garden concept – went on to Lisbon to compete on the global stage. The start-up, which was up against four other tech start-ups in a closely contested competition from BRAQ Aerospace, Juleb Digital Pharma Company, Mawidy and Tarjama who were shortlisted in this inaugural edition.

To be recognized as a leading tech innovator, companies from start-up to accelerated growth stages are invited to pitch their innovations and present their strategic ambitions to panels of local and global industry experts. This is their opportunity to be recognized as one of Saudi Arabia’s most innovative and successful technology entrepreneurs.

Shortlisted companies will be given exclusive networking opportunities among industry experts and tech leaders. The winner in Saudi Arabia will progress to the Global Tech Innovator final event during the Web Summit 2022 in Lisbon Portugal, where they will pitch their growth plans to an international judging panel and compete with the participants from other countries for the global recognition.

In 2021, Brazil’s rapidly growing AgriTech startup Krilltech NanoAgtech was crowned the KPMG Private Enterprise Global Tech Innovator winner, following an intense competition with 16 other finalists including Natufia.

Commenting on the competition, Dr. Samer Abdallah, Head of ICT Sector, KPMG in Saudi Arabia, said, “We are excited to see that start-ups are booming in Saudi Arabia. More and more entrepreneurs are succeeding each day, and their success inspires others. By bringing innovative technologies to light, we are supporting the growth of companies that are changing the world for better. No matter what type of technology a business is utilizing, whether they are tech-enabled, tech-led, or tech-driven, we encourage them to apply to this competition and take advantage of this incredible opportunity.”

“Making connections and gaining recognition among some of Saudi Arabia’s most respected advisors, industry leaders, and other major world markets through the global exposure in the competition, is an opportunity that every tech entrepreneur would be excited about.”

The 2022 KPMG Private Enterprise Global Tech Innovator competition is being hosted in over 21 countries round the world.