How non-fungible tokens have become so popular
The NFT market has introduced into blockchain and the digital economy a way for artists, gamers and musicians to copyright their creations.
Notable tech and media investors are jumping on the digital goldmine that has permeated the digital economy, the NFT market.
Twitter CEO Jack Dorsey created an NFT from his first ever tweet about Twitter in December 2020 and sold it for $2.9 million. This shows that you can create an NFT of digital assets supported by the platform.
Why is NFT Marketplace becoming prominent?
Before 2017, no one thought that the world will consider things like photos, paintings, tweets, GIFs and videos as crypto investment vehicles. Fast forward to the present moment, we can see that the NFTs have become digital assets recognized and accepted in the crypto world. According to Non-Fungible.com, the average price of an NFT was $807.52 in 2021.
SkyQuest Technology capped the value of the global non-fungible tokens (NFTs) market at USD 15.70 billion in 2021 and expected it to reach USD 122.43 billion by 2028, with a CAGR of 34.10% during the forecast period 2022 – 2028. The growing demand for digital art collections and other factors are responsible for this market estimate.
The first known NFT was created in May 2014 precisely by Kevin McCoy and his wife Anil Dash and was sold for $4 during a live presentation in New York. It became popular when CryptoKitties was launched. Cryptokitties was a blockchain-based game where players profit by selling tradable virtual cat NFTs.
While the NFT market was stable from that period, it exploded in 2021 due to the increase in demand and supply chain, and the launch of NBA Top Shot by the creators of CryptoKitties.
Another major contributing factor to the sudden surge in NFTs was Christie’s “Everydays: The First 5,000 Days” phenomenal sale. Mike Winkelmann, a graphic designer better known in the electronic art world as “Beeple,” created the collage and sold it for $69.3 million. It was a collage of 5,000 pieces of digital art produced daily by Beeple since 2007.
How NFTs work
To understand how NFT works, you need to understand the concept. NFTs or Non-Fungible Tokens are digital assets with values that cannot be exchanged or replaced. You can exchange one cryptocurrency for another and get the same value with other cryptocurrencies, but not with NFT.
NFTS uses the same security and authentication system as Blockchain. Using the same system means that NFTs are minted through smart contracts that help assign ownership and manage the transfer of the NFTs. This explains why it is very safe and secure. NFT can be in various digital forms, ranging from images, GIFs, videos, in-game assets and digital paintings. Most NFTs use Ethereum (ETH), so they are compatible with Ethereum-based projects.
For example, if there is a painter who wants to do an online exhibition of their art or paintings. They may be concerned about the safety of their work.
NFTs can help them secure their art collectibles through the Blockchain system so that no one can steal or claim their art. Many artists are now looking to NFTs to help them create value and profit for their work.
How to use the NFT Marketplace
After understanding NFT and how it works, you will know how to make good use of the Ethereum-based platform. Here are some ways you can use non-fungible tokens;
Connecting physical assets to a blockchain network
You can use NFT to connect your physical assets or properties to a Blockchain network and protect it through the system.
Authentication of art ownership
NFT, through the Blockchain system, helps to prove and protect ownership of digital assets. You don’t have to look over your shoulders when securing your art or collectibles through NFT.
Games and entertainment
You can earn tokens by playing most NFT games. Examples of NFT games are Cryptokitties and Axie Infinity, where you can earn tokens through a play-to-win system. Most people play the NFT games as an investment and the token can be sold for money or cryptocurrency.
Conclusion
The NFT market is constantly evolving, and it is not just a trend, but a complete paradigm shift in the Blockchain world. If you’re interested in creating value or letting the world see and recognize your art, you might want to jump on it, especially if you’re creative.
References
Disclaimer: the information herein is provided without regard to your personal circumstances and should therefore not be construed as financial advice, investment recommendation or an offer for, or solicitation of, transactions in cryptocurrencies.
