Non-fungible tokens (NFTs) recorded an exponential surge in its sale during quarter one of 2021. NFT sales were around $1.5 billion in Q1 of 2021 that is 26x volume growth year on year(YOY) compared to Q1 2020.
How it happened suddenly? Let’s dive in to know how NFT demand skyrocketed:
What is NFT?
NFT stands for non-fungible token. Let’s understand it word by word. Fungible means something can be replaced by identical items. For example, Bitcoin. As a crypto investor, I don’t care which Bitcoin I have. What matters is Bitcoin.
Non-fungible means an item that can’t be replaced and has a unique identity. So, NFTs are digital assets based on blockchain technology with unique identities and authenticated by the owner. All NFTs are entered in a distributed ledger. If anyone attempts to enter the duplicated NFT, it will be deemed “wrong” and cannot persist in the distributed ledger.
How NFTs Got so Popular?
NFTs were founded around 2013/2014 when users showed interest to trade digital assets other than Bitcoin. NFTs used Ethereum’s virtual machine concept for developing and distributing the tokens.
But NFTs got became popular when CryptoPunks and later CryptoKitties came into existence in 2017. CryptoKitties is a blockchain-based online game that is popular in trading virtual cats.
Due to the adorable nature of CryptoKitties, it suddenly became people’s favorite. But, the popularity graph fell rapidly and became quiet for so many years.
In January 2021, NFTs popularity skyrocketed and people made it one of the coolest things ever. It all happened due to the world’s crypto demand, and NFT was introduced as an alternative crypto-related investment (e.g., NFTs, centralized exchanges, mining farms) that have outperformed even BTC.
With the emergence of NBA Top Shot Dapper Labs, the creators of CryptoKitties collaborated with the NBA, Topshot is a place to purchase and collect unique moments in the NBA season.
In Q1 2021, Beeple(a digital artist), and Christie’s auctions sold $69 million in digital assets in the form of NFTs. Recent crypto exchange markets like WazirX have already introduced Asia’s biggest NFT market on its platform.
Recently, Next Big Brand had an exclusive interview with NFTically founder Toshendra Sharma to know about the insights of the NFT market. Talking about challenges faced by the NFT industry, Sharma said, “there are challenges to handle the NFT market due to the technical issues. But banning NFTs is not a solution, while it should be regulated and strict terms and conditions should be implemented.”
Who will benefit more from NFT? Answering this question, Sharma said that anyone who has something unique in the form of a blog, source code, image, arts, music, or anything can monetize it with the help of NFTs. So, anything that will add value and deserve to come in the public domain will benefit from NFTs.
Some people think that NFTs are bubbles. The same thing was said about Bitcoin when it came to the limelight in 2017, but buying BTC at $19K would be an absolute steal right now (it’s $50K at the time of writing). So, NFTs are the future if it is regulated properly.
