So far this year, non-fungible tokens (NFTs) appear to have exploded from the ether. These digital assets, from art and music to tacos and toilet paper, are selling like 17th-century exotic Dutch tulips, with some fetching millions of dollars.
Are NFTs, on the other hand, worth the money — or the hype? Some analysts believe they, like the dotcom craze and Beanie Babies, are about to burst. Others feel that NFTs are here to stay and will forever revolutionize investment.
What Is an NFT?
A digital asset that depicts real-world objects such as art, music, in-game items, and films is known as an NFT. NFTs are purchased and traded online, often using cryptocurrency, and they’re usually encoded with the same software as many other cryptos.
Despite the fact that they’ve been around since 2014, NFTs are gaining popularity as a more popular means to buy and sell digital art. Since November 2017, a whopping $174 million has been spent on NFTs.
NFTs are also one-of-a-kind, or at the very least one of a minimal run, and contain unique identifying codes. “Essentially, NFTs generate digital scarcity,” explains Arry Yu, managing director of Yellow Umbrella Ventures and chair of the Washington Technology Industry Association Cascadia Blockchain Council.
3 Reasons Why NFTs Should Be Taken Seriously
- Precaution is Required
All good things, however, come with their own set of difficulties. The question of copyright is one in the case of NFTs. As the market for NFT expands, reports of digital art being duplicated on NFT platforms have surfaced, highlighting the need for stricter penalties for digital theft and alteration. Cyber-security is also a concern since some users have reported having their accounts hacked and NFTs worth thousands of dollars stolen.
2. Future Possibilities
The notion of linking NFTs with e-commerce platforms has been generating waves in the crypto community for a while now. NFTs, experts say, can play a vital role in the world of e-commerce and the market for high-end goods due to their digital character and lengthy shelf life.
Because NFTs are digital, they eliminate the difficulties and costs of shipping products. In addition, because the metadata on the token cannot be modified by users, luxury businesses might offer exclusive and limited NFTs without having to worry about counterfeits.
3. Growing Popularity
The ability of NFTs to provide users with a sense of “unique ownership” and “Digital Immortality” has opened up new doors for digital commerce and participation. Despite the fact that NFTs have been around since 2017, their popularity skyrocketed in 2021.
According to another Forbes report, NFT sales were over $1.2 billion in the first two quarters of 2021, almost half of the $2.5 billion total sales volume, while the Dapp (decentralized applications) industry as a whole saw over 1.4 million daily unique users, up 23.72% from the previous month.
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