Non-fungible tokens, or NFTs, have been around since 2017, but they really broke into the centre stage in early 2020, and momentum has been building since then. NFTs are expected to produce $2.5 billion in sales in the first half of 2021.
The likes of Twitter CEO Jack Dorsey, who sold an NFT of his first tweet for $2.9 million, and a collection of CryptoPunk pixelated faces that sold for several million dollars apiece, are at the top of the NFT sales chart. Even so, they couldn’t compete with Mike Winkelmann, the digital artist known as Beeple, who sold an NFT of his work at Christie’s in March for $69 million.
The aforementioned things, like most things on the internet, can easily be downloaded for free. However, there are hordes of people who are willing to pay exorbitant amounts of money in order to claim ownership. This phenomenon is not only curious, but also confounding in nature. It also begs the question, why are NFTs gaining popularity now?
Financial experts have examined multiple trends that may hold the answer to the dilemmas of NFTs. Some of the most fascinating trends have been,
- Loss of Ownership in the Digital World
Prior to the internet, content could be owned. People bought books, records/CDs, and paintings, which they could keep, sell, or bequeath without restriction. That is no longer the case today. When people use popular platforms like social media or subscription services to consume material, they are essentially “renting” it—the platforms’ terms and conditions make it apparent that the content does not belong to them.
There is no permanence—one’s favourite content might be removed at any time by the host platform, leaving them with little redress as non-owners. Even when platforms allow for ownership, it is centralized and bound to the platform.
While this is not a new problem, many people are only now becoming aware of it. The streaming battles and high-profile social media bans have highlighted humanity’s reliance on the internet and media behemoths. Many individuals are looking for alternatives that will allow them to own the digital assets they care about, due to a growing awareness of the consequences of lack of ownership and concerns about the power that media and internet platforms have.
- NFT Offers an Ownership Alternative
NFTs provide an alternative model, allowing people to control digital material that is valuable to them independently of big media companies’ whims and interests. NFTs can be shared and utilized across many platforms, and they remain the property of the owner until they are sold.
- The Effects of the Pandemic
The effects of the global epidemic exacerbated these long-term patterns. When people were forced to seek refuge in their homes, they turned to the internet for community, connection, and meaning. NFTs provide an innovative method to engage directly with things people care about without having to leave the house.
- A Steady Trend or a Bubble waiting to Burst?
It’s difficult to say whether a digital cat will be valued at several hundred thousand dollars in five years, but the technology underpinning NFTs, which effectively enables smart contracts, is far more versatile than its current applications. So, while a particular NFT may not turn out to be a viable investment, the sector as a whole may be poised for expansion.
The industry of NFTs is subject to epic highs and lows. In order to keep up with the industry, one needs a reliable news agency. Crypto Alert is one such company. It allows people to keep up with the trends and the latest NFT news.