Reasons behind the NFT hype
The NFT hype seems to be at its peak and some works of art in digital form are commanding extremely high prices. Many have wondered whether they live up to the media hype. These are most likely known to people because of their possible influence on the digital world. Non-fungible tokens can be used to generate a scarcity premium for digital assets. They can be bought and sold, exchanged, etc. In addition to being intangible, the idea itself can be difficult to grasp.
There is an extensive amount of publicity surrounding these digital assets, which are often spread on social media by crypto influencers. Celebrities and influencers publicize their latest NFT purchases and fuel the excitement surrounding specific NFT collections, thereby increasing NFT’s value and perpetuating a self-reinforcing cycle of NFT hype.
Despite the fact that it is exactly the same, NFT has received extensive media coverage. Why? The crypto community likes to speculate, and NFTs are no different. Art theft is not prevented by the NFT. It means that the “original” work has been acquired, but it can still be duplicated and distributed by others. Buying them can be compared to buying an artist-signed print.
Let’s explore the reasons that have contributed to the hype around the NFT market.
They add value to tokenized assets: NFTs prohibit the reproduction of items, such as works of art, without permission. Due to their scarcity and high value, these digital assets will continue to be in demand.
They strengthen the investor’s liquidity: In addition to the enthusiasm surrounding NFTs, they also provide investors with greater liquidity. Tokenization gives investors a greater degree of ownership of their assets.
A revolutionary shift: Because a digital ledger (blockchain) can immutably store all these items as NFTs and help us determine the most efficient way to value, control or trade them, these digital assets can represent a paradigm shift in how we value , manage or trade in unique items such as photographs, video recordings, audio recordings, collectibles and intellectual property, which is a possible cause of NFT hype.
Extensive use in companies: By storing goods as NFTs, businesses are already reaping the benefits described in the previous section. By tokenizing patents as NFTs, IBM hopes to solve ownership and transaction transparency issues with blockchain technology.
Generation change: Due to Generation Z (born between 1995 and 2025) and Generation Alpha (born between 1996 and 1996), NFTs and other cutting-edge technologies such as AI, cryptocurrency and self-driving vehicles will remain.
People are skilled at technology: Given the aforementioned Web3.0 native generations and tech-savvy millennials, NFTs are here to stay for the foreseeable future. Internet access is available for all activities, including gaming, research, work and commerce.
Currency transactions and distribution: We are now able to start a new era of crypto adoption as a result of NFT hype and adoption, which has allowed us to bridge the gap between crypto’s institutional and casual use. Since valuable objects exist, NFTs provide a means to acquire, store and distribute them while keeping them safe.
