In 2021, non-fungible tokens (NFTs) have become quite the buzzword. From something obscure and nerdy to the most sought-after items of digital consumerism, search volume for the term “NFT” has surpassed those pertaining to “Crypto” for the first time, Google Trend Data shows.
Despite a dip in crypto market transaction volumes over the past few weeks, NFT sales have surged on marketplaces such as OpenSea and mainstream brands are considering entering metaverse platforms. NFT consumption is predicted to surge exponentially by 2022.
The surge in interest coincides with data published by OpenSea, an NFT marketplace that controls a large portion of global NFT sales, The volume of OpenSea sales has risen by more than 14,500 percent compared to 2020 – exceeding $10 billion (roughly Rs. 75,176.91 crores). Although OpenSea controls most of the NFT sales volumes, it is only a matter of time before non-Ethereum based marketplaces burst onto the scene.
A non-fungible token, or NFT for short, is a digital asset that is created using blockchain technology. Each NFT is identified by its unique identifier and includes metadata that distinguishes it from others. The blockchain cryptographically authenticates every NFT, ensuring that its owner is known for life since the ledger is digitally recorded.
The most common cryptocurrency used to buy and sell NFTs is Ethereum (ETH). As unique digital assets, NFTs have no precise equivalent in value to anything else. The value of NFTs is frequently determined via auctions or by the creators themselves, similar to how a rare gem is not the same as another rare gem.
NFTs are much more than simple “digital assets,” whether they are artwork, music, photographs, VR pieces, or anything else. NFTs have quickly developed a whole community of artists and creators who feel empowered by the ability to sell their creations independently and to support themselves in this way.
Nike and Adidas are putting their spin on the metaverse NFTs, serving as evidence of the exponential rise in the demand for NFTs. The NFT collections of celebrities like Snoop Dog, Grimes, Steve Aoki, Mila Kunis, and Melania Trump are also generating interest.
There are also NFT-based games such as Axie Infinity and Sorare that enable players to learn about crypto as well as earn a small amount of money while playing video games.
Brands and individuals have also found ways to donate proceeds from NFT auctions to non-profits or charities. In addition to obtaining fine pieces of art, crypto holders may also deduct their donations against their ordinary income in countries like the US, saving on taxes, resulting in a win-win situation.
