Sat. Oct 16th, 2021

Visa Inc. said Monday it bought a non-fungible “CryptoPunk”, or NFT, token for nearly $ 150,000, jumping into the growing frenzy surrounding digital assets that some argue could be a game changer in the art realm, the music and the ownership of virtual assets. .

“We want to have a seat at the table as the cryptographic economy evolves,” said Cuy Sheffield, Visa’s V,
+ 0.04%
head of cryptography, said Monday in comments emailed to MarketWatch.

“By actively participating in this space, we gain deeper first-hand knowledge, which ultimately allows us to better support our customers when they enter the space,” the Visa executive said.

An NFT is a unique verifiable digital resource that uses blockchain technology. NFTs are a certificate of digital authenticity and allow you to trade and track digital assets, including artwork and music.

In this case, the largest card network in the United States bought one of the unique avatars of the CryptoPunk series, a set of about 10,000 pixel art characters made by Larva Labs in 2017, which have now come to typify the fashion of NFT.

Photographic illustration MarketWatch / LarvaLabs

In June, Israeli businessman Shalom Meckenzie bought CryptoPunk # 7523 for $ 11.8 million from Sotheby’s.

Sheffield said buying a Visa is “a great way to raise awareness about the potential of this space, while providing us with the opportunity to learn and help our customers navigate it.”

In fact, NFTs are seen creating opportunities for new business models that did not exist before, including artists who can attach stipulations to an NFT that guarantees to obtain part of the collection each time it is resold, which means that it is they benefit if you increase your work. value.

NFTs also offer musicians and sports stars the potential to offer enhanced benefits to their fans, within the easily verifiable realm of the blockchain.

Visa says it does not expect to be the last major institution to buy an NFT.

“In the early days of social media, it was hard to imagine all the major brands having an actively managed account and interacting directly with these online communities,” Sheffield wrote.

“Similarly, while Visa is the first major brand to do so today, we hope that over time, many brands will recognize the value of collecting NFT to express their brand identity and connect with passionate communities of creators and collectors, ”the executive said.

Visa delved into their reason for buying an NFT on their blog here.

Most NFTs run on the Ethereum blockchain network behind the Ether ETHUSD token,
-0.47%,
the world’s number 2 cryptocurrency by market value. This is mainly because Ethereum is known for its smart contracts, which allow developers to write special instructions or codes, including those from NFT, over their distributed book protocols.

In an NFT sale, the auction management process can be coded into the Ethereum blockchain, including the retention of bid money, usually on Ether, which is held in deposit until the winning bid is determined. .

Many crypto cries have been waiting for Bitcoin BTCUSD,
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the largest and most prominent cryptography and Ether will be used more in digital payment networks. Today, cryptography is still seen as a niche in the massive world of payments formed by companies such as Visa and Mastercard MA,
+ 0.21%.

However, the emergence of digital assets has clearly caught their attention.

Earlier this year, Visa began piloting the settlement of transactions on its own network with digital currency. Mastercard announced the support of some cryptocurrencies in its network, also in early 2021.

Executives from both companies have cited growing interest among customers in these services.

Visa moves come as Bitcoin rises to its highest level since May, recovering a value of about $ 50,000, while the largest cryptocurrency complex amounts to a value of $ 2.1 trillion, also around its highest levels since mid-May.

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