If you haven’t heard the word “NFT” yet, you must be on a different planet last year. Collin’s Dictionary announced its word of the year 2021 as NFT. Though the concept of Non-fungible tokens came into existence years before, the boom happened in 2021. Since then, people have started using Non-fungible tokens to get ownership of digital assets and register them on the blockchain. Today every industry is taking up NFTs, from in-game assets to land property registration. NFT marketplace platforms are now giving an opportunity to people to mint their own NFTs easily without any codes. This has considerably increased the Number of NFT users rapidly. It’s not late even now to get to know about this new swing in social media.
If you don’t have any idea about what blockchain is all about, here is a short insight so you can get an overall picture of what is going on around this new technology. Blockchain is a technology where every data is saved on a server or block. Several blocks connect together to make the blockchain. So if the information is stored on any block, the same data will be copied by other blocks. These servers or blocks are maintained by individuals around the globe and are not centralized. So if you want to erase data or a transaction from a block, you will have to delete it in every block of the blockchain, which is impossible. So it is a secured network that is unhackable and unmodifiable.
What is an NFT?
Non-fungible Tokens are something that helps to tokenize unique assets. They are not interchangeable with other items because they have unique properties. They can be bought and sold but cannot be exchanged for other assets. Recognizing the uniqueness of every asset, NFTs opened a whole new range of opportunities for the blockchain. Anything and everything unique can be made into an NFT, and this made them invade every possible industry on the planet.
NFTs and the Art
The first Non-fungible Token was minted in the year 2015. But it reached the masses only in 2021. What happened in between? The global pandemic left the artists out there broke without being able to display their work in art exhibitions and auctions. Though they are the creators and owners of the art, they still don’t have a royalty when the art is sold to someone.
That is when the art industry took up Non-fungible tokens to monetize their works. In the digital world, people were interested in the idea of owning digital assets with new technology(though blockchain came a decade ago. People came to know about them later). This made people buy NFTs, and they are slowly entering the mainstream today.
The NFT boom in 2021
So what exactly happed in 2021? Why was there a sudden surge in the NFT sales? And why is there a huge demand for something that is not physical? One fundamental reason is the joy of owning a digital asset, able to trade them and earn a passive income out of it.
According to Nonfungible.com, trading in non-fungible tokens reached $24 billion, a 21,000 percent rise from 2020. NFTs have made significant inroads into the popular consciousness, with celebrities and prominent corporations quickly warming to the industry. People also improved their ability to profit from NFTs, generating a total of $5.4 billion in revenues from token sales in 2021.
More than 2.5 million crypto wallets were used for holding or trading NFTs in 2021. This Number is up from just 89,000 in the previous year. The Number of buyers rose to 2.3 million from 75,000. These statistics provide the information that it is a tremendous surge in the NFT realm.
Major NFT sales in 2021
Looking back at the major sales, NFTs were sold out for millions of dollars. There were also instances where a single red pixel NFT sold for a hefty amount. Some notable NFTs sold that made the headlines were
- Everyday: The First 5000 Days, produced by digital artist Mike Winkelmann (aka Beeple), fetched a record-breaking $69.3 million, making it the most expensive NFT.
- Cryptopunks, a pixelated art that is one of the first-ever NFT collections. Many NFTs from this collection were sold for millions of dollars.
- Jack Dorsey, the former CEO of Twitter, sold his first-ever tweet on Twitter as an NFT for $2.9 million.
- Celebrities like Jimmy Fallon, Justin Bieber, Snoop Dog, and more purchased the Bored Ape Yacht Club NFTs and made them their profile pictures. These NFTs were also sold for millions.
- The image of a Shiba Inu, a breed of hunting dog from Japan, which is one of the most famous memes circulating on social media, was sold for $4 million.
- Save thousands of Lives by Nora Health is an NFT that was sold out for $5.1 million for a cause. The proceedings of the sale will be used by a Non-Profit organization to save quite literally thousands of lives. The NFT was sold on the Opensea NFT marketplace.
The dominance of Non-fungible Tokens
Today Nonfungible Tokens are used in many industries for their uniqueness and transparency. The first industry to take up NFTs after art is the gaming industry. The in-game assets were made as NFTs and were made available in NFT Marketplace for gaming collectibles. Other than that, NFTs were used in the following use cases.
- As a tool to be a member of a community, BAYC, Veefriends by Garry Vee, Azuki, and more NFT collections came out to create a community through NFTs.
- Governments started using NFTs to register land property and birth certificates to create a tamper-free documentation process on the blockchain.
- Supply chain and logistics started using NFTs for every luxury product or other products to track the products’ shipping and more. This brings transparency and reliability to the end-users.
- Event ticketing is something that has been emerging in the industry. Many game tickets and even flight tickets are becoming NFTs now. This kind of NFTs started the genre of giving utilities to NFTs.
There are more use cases that are currently using NFTs now. They include medical records, Intellectual property patents, Citizen Identity cards, and more.
With new updates coming, NFTs will be making big in the future by exerting their dominance in every industry possible. It is indeed NFT mania out there that people go crazy over collecting and investing in NFTs. A number of NFT trading platforms are coming out, keeping NFTs as a nascent tech among others using blockchain.