There is a lot of buzz about your favorite movie actors and musicians releasing their first Non-Fungible Tokens. The NFT market is a fast-growing market that continues to attract wealthy individuals and high-end companies like there’s no tomorrow.
While massive financial injections from select stakeholders undoubtedly contributed to NFTs success, it would be a mistake to dismiss the NFTs success as another bubble or Ponzi scheme. Instead, there is a deeper reason for the NFT explosion; the promise NFTs hold as building blocks for a new reality.
WHAT IS AN NFT (NON-FUNGIBLE TOKEN)?
NFT allows us to own a digital thing, such as an image file, a tweet, music, website content, a physical item, or any digital format. Is it a tweet? Yes! The first tweet from Twitter CEO Jack Dorsey NFT is sold for 2.9 million dollars!
Even though they are not new, having been around since 2014, these tokens are gaining in popularity as a means to acquire and sell the digital network.
NFT stands for “Non-Fungible Token,” It can hold any digital content, like drawings, melodies, animated GIFs, or video game stuff. It may be a real-life painting or a trading card, but the blockchain will maintain track of who owns the file.
So, using the blockchain, we can buy and sell ownership of unique digital goods while keeping track of who owns them.
THE NFT BOOM
Bitcoin quadrupled its previous all-time high price in 2021, the Ethereum ecosystem exploded, institutional investors flocked to cryptocurrency, and Dogecoin became a mainstream catchphrase. But, amazingly, the one thing that everyone couldn’t stop talking about was JPEGs. NFTs were a niche product a year ago. But, they have now become a cultural phenomenon.
Not only has this phrase infiltrated popular culture and made digital asset ownership and more commonly understood idea in the last 12 months, but the sector has also grown to billions of dollars in monthly trades.
NFT sales skyrocketed to about $25 billion last year, from $95 million in 2020. Tokens bought and sold through online platforms like OpenSea may derive value from their rarity or what investors think items underlying the tokens are worth.
For example, artist Kevin McCoy created in 2014 what’s widely considered the first NFT: a five-second animated loop of a color-changing octagon. Initially traded for $4 in a demo, a new token for “Quantum” sold at auction in 2021 for $1.47 million.
The token hype surged last year as an investor paid $69million at auction for an NFT of artwork created by Mike Winkelmann, known as Beeple. In addition, brands are betting on NFTs. Adidas AG said it sold out of its first NFT collection, garnering more than $22 million.
Nike Inc. acquired an NFT production studio. Gucci recently sold NFTs for about $4,200 each with a real-life ceramic sculpture. In addition, NFTs can convey special privileges.
Entrepreneur Gary Vaynerchuk promised access to future conferences and other perks for those holding NFTs from his collection. Over $181 million has been spent on VeeFriends since May, according to DappRadar.
If NFTs are genuinely the building elements of the next generation internet, they may soon become a thing of the past. But, to the dismay of current naysayers, NFTs may soon be ubiquitous, indicating ownership of everything in our digital life.
In the future, we may not even refer to them as NFTs. We might not even consider it; they won’t be unique anymore. They will simply exist.
NFTs, on the other hand, was wild, fresh, confusing, and compelling in 2021. We are still in the throes of the mania in 2022.