NFTs rose to their stardom in 2021. They also cemented their dominance in the sector of trading and investments in the global market as a legitimate and trusted sector. The billion-dollar generating machine has been in existence for only a few years now, yet they have found a huge voice in this sphere. This is saying something since successfully monetizing digital assets for buying and selling has been a huge battle before NFTs.
A brief history of NFTs
The phenomenon started in the year 2014, starting as an art trade sector. Since then, they have housed a plethora of industries. The first-ever minted NFT was from the artist Kevin Mckoy who sold the NFT termed “Quantum” – a repeating geometric & concentric shapes that overlapped onto itself. The NFT traded recently for upwards of $1.4 million. Since then, many new industries have been integrated, such as music, gaming, gaming, metaverse, social media – the list goes on. The digital asset trading platform has also been used as a tool for marketing and exposure. They have also helped generate a huge monetary stream for creators and brands to market and sell their products like never before.
The trajectory of NFTs in the global lens
2021 was the highest peak of NFTs performance in the global market yet. With nothing shy of $41 billion, down the line, they are set to make unprecedented records by this year’s end. The use cases rose due to the numbers in participation. The sector demanded innovation and scalability to host its growing ecosystem. And niches, too, had a breakthrough. Any of the industries in the NFTs could and did take advantage of the intersectionality and interoperability aspect of the sector. They tackled a plethora of issues, including NFT being considered a mere fad or a trend. Their utilities and real-world applications grew in folds.
NFTs reside on the all-important innovation in the 20th century – the blockchain. And due to its interoperability, it takes inspiration from all the other technological advancements housed on the blockchain. Web3, decentralization, central data sharing, crypto, P2P, etc., are some of the notable aspects of the blockchain. The tech is an online repository that records the existence of the assets and authenticates their legitimacy of it. They are popular because of their decentralized nature, impeccable security assurance, and permanence.
NFTs, for the most part, have been developed on the Ethereum blockchain, and they are bought with Ethereum’s native coin termed “ETH.” But, this is not the sole branch to buy and sell NFTs. Many other blockchain standards and relevant crypto coins to support the purchase of these assets have also popped up. Popular standards of developing a unique NFT – to load it up with attributes, smart contracts, and utilities are ERC-721 & ERC-1155.
Advancements in the interface
No-code launchpads are a new entity that helps creators and businesses to start a dedicated NFT marketplace. This prospect allows these individuals to penetrate the market much sooner and more efficiently than the traditional way of starting a marketplace. The utilities of NFTs have transcended their mere existence and consumption in the digital format. Physical applications of NFTs are the future of the sector. Marketing through ticketing – events, merchandise, parties, and concerts. Rewards & gifting are other boons through which NFTs can be made tangible. Some other influences brewing in the digital asset space are real estate, gaming – metaverse, social media, and entertainment.
The industries and their niche marketplaces can integrate reward and utility systems into their projects to increase user engagement. The hyper-utility of NFTs is the keyword that will drive the sector to its heights.
Perception is key
Imagine holding the rights to the most exclusive and sought-after asset in existence. Well, that is what the NFTs provide. They drive the fear-of-missing-out “FOMO” aspect to sell themselves as exclusive assets. The rarity of the objects is paired up with undeniable security adages that come as part of the deal. Their trust in delivering and performing well in the commerce space for creators and trade to the investors are high-points. NFTs are tamper-proof, meaning they eliminate wrongful claims of ownership and maintain their permanence throughout.
NFTs have the ability to improve and aid in the marketing aspects for amateur and established individuals, creators, and businesses. Generating a strong active and passive investment stream for investors and NFT enthusiasts helps its appeal more.