Ever since cryptocurrencies took the world by storm, questions of how it will impact the global financial sector have arisen, the resulting boom led to the creation of a multitude of crypto projects and new industries. The fact is, Blockchain technology is doing just as it promised to do, revolutionizing the way digital transactions are processed.
NFTs are just one of many new industries built using blockchain mechanics, and this goes to show that this technology will be used for far more than its creators originally envisioned. Secure, fast, and decentralized payments were only the beginning. As Bitcoin continues to thrive, achieving a market cap of $1 trillion, an NFT creator known as Cryptokongz, whose collection of pixelated ape NFTs burned over 1,430 Ethereum, worth $4.68 million in the past 24-hours!
Understanding how NFTs have gradually grown to become a profitable industry is vital to navigating the crypto space and choosing the right investments; after all, art has always been considered a smart investment.
What are NFTs, and What Do They Mean?
NFTs are essentially unique digital representations of art, content, and collectibles that can be bought or traded across blockchains. NFTs mean Non-Fungible Tokens, where Bitcoin is Fungible because the value of 2 bitcoins is the same. The value of two NFTs is not the same, making it non-fungible. Literally, anything can be tokenized. Digital art, digital books, music, and even tweets!
NFTs have grown popular in the last few years, with hundreds of millions of dollars being raised through the auction of NFTs. Far from a passing trend, NFTs represent a shift in the blockchain industry and popular culture.
NFTs Pushing Boundaries
Perhaps the most considerable appeal of NFTs is that they allow for practically anything to be tokenized and sold commercially. This has made it very popular within the arts and entertainment industry and has seen many big names offer NFTs to the public. Many musicians are using NFTs to sell their music, so are artists!
Iconic auction house Christie’s raised over $69 million after selling NFTs for the art piece “Everyday: The First 5000 Days” by artist Mike Winkelmann. NFTs are making headway in sports. NBA Top Shot, an NFT marketplace, has raised over $230 million in sales. Some of their notable trades include the NFT for a LeBron James highlight and a Zion Williamson spotlight that sold for $200,000 each. So far, everything from collectible memorabilia to digital art of beloved athletes can be tokenized. Even billionaire Jack Dorsey’s first tweet has been tokenized and auctioned for $2.9 million as an NFT.
What Makes NFTs so Unique?
While it may seem strange that people are paying large amounts of money for a weird-looking artwork or things like an NFT of a tweet, or sports highlight, NFTs are on track to change how we view ownership of physical and non-physical items. Since NFTs are based on blockchain technology, they have a permanent and unchangeable record of use and ownership. Anyone can easily access blockchain records. This means that items bought, sold, or transferred via an NFT, are recorded on the blockchain. Also, You cannot trade NFTs for one another like cryptocurrencies.
Looking from the social angle of things. The collectibles market is worth billions globally and has always dealt with fakes or replicas within the industry. With the rise of NFTs, collectibles can be sold to customers in a near-impossible way to fake or duplicate. Also, proof of ownership is recorded and cannot be hacked or stolen.
With NFTs, artists can sell their work to customers without going through middlemen like auction houses and galleries. The world has changed, and those who have the money to spare can decide to buy a tweet just for bragging rights, even if the tweet is already available to the public. NFT will solve questions of digital art ownership. Something the physical art industry failed to do many years ago.
NFTs cut across art, sports, music, and even gaming; they can be applied to almost anything. Over the years, we can expect to see NFTs take up more space in the digital commerce industry. For creators, this means a more modernized way to earn money, and for buyers, it means more clear and concrete ownership of content without worry of duplicates.
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