As cryptocurrency steadily gains ground around the world, there is a greater interest in the various capabilities of blockchain, the underlying technology behind cryptocurrency. One of these is non-fungible tokens, or NFTs as they are commonly called. NFTs are essentially unique digital representations of various pieces of art, content, and collectibles that can be traded across blockchains.
NFTs have become huge in the last few years, with hundreds of millions of dollars being raised through the sales of NFTs. Far from a passing trend, NFTs represent a shift not just in the blockchain industry but in popular culture as well.
NFTs Leading the Way
Perhaps the biggest appeal of NFTs is that they allow for practically anything to be tokenized and sold commercially. This, along with the fact that no two NFTs are the same, has made the concept popular within the arts and entertainment and has seen many big names offer NFTs to the public.
An example of this is social media star Bart Baker who auctioned 8 NFTs to this audience. 7 of those were of some of his most popular videos and the 8th allowed for the winner of the auction to record a video with him which would then be minted into an NFT. iconic auction house Christie’s raised over $69 million after selling NFTs for the art piece “Everydays: The First 5000 Days,” by artist Mike Winkelmann.
Even within sports, NFTs are taking center stage as NBA Top Shot, an NFT marketplace focusing on the NBA in the US, has raised over $230 million thus far. 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 Jack Dorsey’s first tweet has been tokenized even as the market grows.
Why NFTs are Getting Huge
On the surface, it might seem odd that consumers are paying such huge amounts of money for things like an NFT of a tweet or sports highlight, or a virtual tool, but NFTs are on track to change the way we view ownership of both physical and non-physical items.
First, NFTs, being based on blockchain technology, have permanent and unchangeable records of ownership and use. This means that should an item be bought, sold, or transferred via an NFT, the records of everyone who has owned or used them is readily available. Also, NFTs cannot be traded for one another the way cryptocurrencies can be because no two are the same.
Then there is the social aspect. The collectibles market is worth billions globally and has always had to deal with the persistent problem of fakes existing within the industry. With NFTs, collectibles can be issued to fans in a way that is near-impossible to fake or duplicate.
For artists, this also means that they can sell their work to fans with much less money going to middlemen like auction houses and galleries. Some consumers simply like the idea of owning a version of a pop culture phenomenon that no one else does. This is why someone would pay $2.5 million for the NFT of a tweet that is available to the public.
From the world of sports to art to even gaming, the applications of NFTs are almost limitless. Over the next few years, we can expect to see it take even more space in the world of digital commerce. For creators, this means a more streamlined way to earn money and for consumers, it means more clear and concrete ownership of content.