If you understand technology & arts then most likely you understand NFTs. After all, that’s the buzzword everyone wants and talks about. Non-fungible tokens have recently resurfaced in the public eye, thanks to a massive price increase seen across various collections.
NFT Craze in India: Here to Stay or Just a Bubble?
To put it simply, Non-Fungible Tokens are digital tokens of content and assets, whether physical or digital. The token holds information of ownership thereby testifying the proof-of-originality.
Every token representing a particular copy of the content is unique in its way – either by an ID no, a signature, a text message or any unique element in the content. For example, a movie star launches multiple copies of a poster and puts a unique handwritten text message on each one of them. Therefore, each of these unique posters has a unique token called NFT.
Apart from adding worth to the content, NFTs are an opportunity for consumers to own a unique asset. It’s like purchasing something that’s one of its kind in the world.
Off late, the bandwagon of celebrities, athletes, gamers and artists have plunged at the opportunity to lock their fate on the blockchain. What we are witnessing right now is just the tip of the iceberg. There’s a revolution brimming.
The pandemic compelled many artists to explore ways of generating revenue through means such as an online auction. NFTs arrived just at the right time. The 30-day average for sales of NFTs has climbed from $0.3 billion to $2.5 billion since August 1. NFT collectibles, both old and new, have been at the forefront of this roughly tenfold surge in market size.
NFTs create opportunities for new business models that didn’t exist before. Recently, art backed NFTs are selling for millions of dollars at major auction houses and other art houses.
This has motivated budding or experimental artists, who would once post their work for free sale or sell it for a cheaper price realized the potential that lay with NFTs which they could encash now through the use of blockchain technology and NFTs.
For example, an artwork by digital artist Beeple’s digital was auctioned for USD 69.3M, making it the third-highest sale by any artist so far.
NFT are on the rise in the post-pandemic world.. The recent price gains in cryptocurrencies such as bitcoin, which rose around 300% in 2020, have also created a new group of crypto-rich investors, who spend their cryptocurrencies on NFTs.
HOW MUCH HAS THE MARKET GROWN?
Traded since around 2017, NFTs surged in popularity in early 2021, then had another explosive jump around August.
Sales volumes surged to $10.7 billion in the third quarter of 2021, according to data from market tracker DappRadar. This was up more than eightfold from the previous quarter.
On the biggest NFT marketplace, OpenSea, there were $2.6 billion of sales in October this year, a massive increase from the $4.8 million in October 2020.
WHY ARE NFTS IMPORTANT?
Enthusiasts see NFTs as the future of ownership. All kinds of property – from event tickets to houses – will eventually have their ownership status tokenised in this way, they believe.
For artists, NFTs could solve the problem of how they can monetise digital artworks. They can receive more income from NFTs, as they can get a royalty each time the NFT changes hands after the initial sale.
NFTs could also transform music, sports and gaming, NFTs’ proponents say.
NFTs are here to stay in the foreseeable future
They are not just a fancy trend that’ll pass by. If you believe that you are certainly on the wrong path. The tokens have a greater role in economic contribution. And while we are at it, NFTs can be created for anything and everything under the blue sky. Apart from digital artwork, your house, car, commodities, licenses etc. can all have an NFT of their own.
This is a time where the NFT rush is helping businesses of any scale, flourish and grow. What earlier seemed to be a hard push to sell, especially in the case of art, today has made it more saleable. For the asset owners, it is an opportunity to put their unproductive assets to monetary worth. For us, it is a lifetime opportunity to embrace a revolutionary technology, before and faster than our peers.