What are NFTs?
The term that seems to be on everyone’s lips, the NFT space is getting bigger and bigger every day. Huge companies such as Nike, Levi’s, and Adidas are all vying to take part in this exciting and ever-growing market. Videogaming, art, music, and cinema- no industry is immune to the NFT craze. The hype is there, and it’s showing no signs of slowing down.
But after hearing the term countless times, you may be asking yourself: “What actually is an NFT?”. Say no more, we’ve got you covered!
What is an NFT?
NFT stands for Non-Fungible Token and is a denomination employed to characterize a unique digital asset whose property is stored on a blockchain like Ethereum or Solana. These digital goods can’t be replaced, falsified or stolen in any capacity as they are safely registered on the blockchain.
Moreover, Non-Fungible Tokens are completely transparent and can display valuable data such as their history, ownership and scarcity. In short, everything is traceable!
NFTs take many different forms as they can both represent digital and physical assets, like real estate, art, music and much more. To break it down further, let’s dive directly into the terminology.
Why are NFTs so popular right now?
Like cryptocurrency before them, NFTs are following the same path and are on the verge of going truly mainstream. But why?
Short answer: the technological potential is insane. In fact, the NFT ecosystem is currently shaping new use cases that we never knew could be possible. As a new technology, NFTs’ possibilities are still being researched actively, and different applications emerge every day.
Undoubtedly, NFTs are most popular right now in the artistic field. Proving ownership over any digital artwork is indeed quite useful, but this space is evolving at a rapid rate. The videogame industry is even dipping its toes into it. (Did someone say Ubisoft?)
Of course, there is then the question of money. Another reason NFTs are trending is because the total trading volume reached more than $10B. Yes, 10 billion dollars of trade volume. No wonder celebrities and influencers are all jumping on the hype train recently!
NFT value is, like everything else in the crypto market, influenced by the supply and demand. If many people want to buy your NFT, then you’ll be able to sell it at a higher price. It also depends on other factors, such as the level of rarity of one particular NFT or the overall supply of a collection. Depending on these factors, collectors or investors will be willing to put a lot of money to acquire its ownership, which leads us to...
What’s next for NFTs?
First of all, before leaping into the future, let’s take a quick glance at the past. Ever since the first “solid” NFT project hit the Ethereum Blockchain back in 2017, the digital art market has been on fire thanks to the CryptoPunks, and hasn’t stopped growing since. Other collections such as the Bored Ape Yatch Club or the Crypto Kitties then came into play and helped to further popularize the NFT space.
Now that they’re holding the attention of the mainstream, more and more actors are becoming aware of NFT potential. Who would have thought at the beginning of 2021 that major companies like Warner Bros. would launch their own collections?
All in all, mass adoption is ongoing as the NFT market gradually stabilizes itself. Web3 is here to stay, and we’re just scratching the surface of its potential. At the risk of repeating ourselves, innovation is always an interesting process to witness, and the disruption it could bring to industries like real estate or gaming could be game-changing.
Fasten your seatbelts, it’s going to be a wild ride!