The last bull run of 2017 was defined by the initial craze of coin offerings, which made a bad turn with predictable consequences for projects with too high a value that only had a team and a poorly written white paper. Although many useful projects from the ICO era could flourish, including Ethereum and others, most came with the wind and thousands of insignificant investors holding worthless bags of signs.
A complete market cycle later, and there is now again a rally that seems to be spreading across various sectors of the crypto industry, especially in decentralized finance. Much has changed since 2017. Regulators cracked, investors became smarter and space fell into disrepair.
Although ICOs are still relevant today, they have changed into other forms of fundraising opportunities – such as security offers, initial exchange offers and initial decentralized exchange offers – DeFi and non-fungible tokens, or NFTs, are now the popular ones on the block.
NFTs are apparently the next popular topic in crypto, and although the numbers are still relatively small, it seems that engagement and interest is increasing rapidly. This shows that the sector has a lot of room for growth.
NFTs are another class of cryptocurrency tokens. Unlike Bitcoin (BTC) or Ether (ETH), it is used to represent different types of assets that differ in value from each other. These assets can be digital or physical. Popular examples include artwork, land or real estate, and even people.
Trump-inspired artwork sold for $ 6.6 million
Inspired by the 45th American president, an artist known as Beeple created an NFT called ‘Crossroads’. The artwork, a holographic animation depicting a defeated Donald Trump naked in the grass, was originally sold in November 2020 for $ 66,666. However, it was recently sold to an anonymous buyer for $ 6.6 million, breaking the previous record of $ 1.5 million. for a single NFT sale.
Beeple is also on the verge of breaking another record: the highest sale of a single NFT by an auction house. His new piece – a work of 5,000 unique images on the gloomy aspects of technology, politics and wealth – will be auctioned until March 11, with an offer of $ 2.2 million.
Cointelegraph Magazine: NFT ‘art revolution’: Beeple over his 5,040-day love work
NFTs are blowing up
The recent developments are simply the latest in a series of fascinating headlines regarding the NFT space, and it is not just artists who are profiting from these types of characters. Empowered by the independence and verifiable authenticity of NFTs, many celebrities, musicians and filmmakers also become involved.
Perhaps the most striking example of this is the recently released Pokémon-inspired NFTs released by Logan Paul, a popular YouTuber, who raised more than $ 3.5 million in one day. The release features 3,000 NFTs inspired by the Pokémon card game, and there were 44 limited edition holographic versions in which Logan Paul himself was a Pokémon.
On February 28, another record was broken when the popular musician 3LAU sold his first NFT album for just $ 3.6 million. Other notable examples include musician Grimes and Mike Shinoda of rock band Linkin Park. Even the iconic TV show Rick and Morty has now stamped its own crypto art on the blockchain, which makes sense given the significant crossover in the demographics of the show and the crypto space.
A real art movement or a cash grab?
The possible symbolism behind the bizarre dollar figures for which the Trump piece of Beeple was resold ($ 6.6 million), coupled with the fact that the youngest buyer wants to remain anonymous, leaves some unanswered questions about the legitimacy of the NFT art movement in the generally – especially when one considers how art is traditionally used by the rich as a way to reduce tax expenditures.
Although the value of NFTs is due to their scarcity, not everyone agrees with the astronomical values, with many commentators in the industry call out purchases of digital art are nothing but nonsense.
Is NFT art used as a way to launder money or evade taxes, a use that is not uncommon in the traditional art world, or is it really the latest craze in the crypto and art world – one that is possible here to stay?
Sébastien Borget, co-founder of the NFT-based gaming platform The Sandbox, believes that there is substance behind the NFT movement and that the hype we are currently seeing has been slowly brewing for years. He told Cointelegraph that a new paradigm was emerging due to the limited supply of digital collectibles:
‘Those who see a large number of records in the industry at the beginning of this year may not realize how long it will take. A number of products have been boiling for the past three years and are now ready for mass adoption. “
The history of NFTs
Almost as old as Bitcoin itself, the very first experiments with NFTs were created in 2012 and named “Colored Coins”. These were initially issued on the Bitcoin blockchain by protocols like Counterparty and Omni and were sometimes as cheap as 1 satoshi, the smallest unit of account for Bitcoin. It is meant to represent a multitude of assets and have different use cases. Colored coins eventually fell out of use, but played an important role in paving the way for the future of NFTs.
When the market finally caught the attention of the general public in 2017 with CryptoKitties, the virtual pet game became so popular that it was responsible for clogging the Ethereum network and setting a new record for the then transaction volume on the blockchain . Fast forward to 2021, and the entire infrastructure has become more robust and diverse.
A recent report by NonFungible shows that NFT transactions more than quadrupled during 2020, growing from $ 62 million to more than $ 250 million. NFT art sales have grown by leaps and bounds and surpass any other category related to the crypto sector. The number of active wallets also grew by 97% between 2019 and 2020, to say the least.
The report also suggests that NFTs will play an important role in the current booming virtual economy in the long run, as people will invest more money and time in virtual goods and experiences. The report also says that the current capabilities are just the beginning of the different use cases of NFTs, which will be integrated into different industries. It may not be long before the first NFT-backed financial services show up. Examples include digital insurance and collateralized loans.
NFTs affect different industries
It looks like the art industry is currently in the NFT spotlight. It received the most attention and experienced unprecedented growth. However, it is noteworthy that other industries are following suit. Game is an industry that is perfectly suited for NFTs, and this is made clear by the number of existing crypto trading card games and also by the investments made by well known gaming companies like Ubisoft with its Raving Rabbids game and Atari with retro art. collectibles.
As mentioned before, the entertainment industry also seems to be dipping its toes into the NFT waters, and not just for artists. Live Event Tickets will be issued soon using NFT-based systems, which will reduce the common counterfeiting problem that occurs in the ticket industry.
Finally, sports leagues: NFTs are easily declared as a kind of “digital baseball cards”, so it would make sense to see big sports leagues start using the technology. It’s already underway, with Formula 1 Delta Time, an official Formula 1 collectible game, and NBA Top Shot, an officially licensed platform to own the best NBA highlights in the form of collectibles that ‘Moments ‘ named.
Wilhem Pujar, co-founder and CEO of Stacktical – a decentralized platform for service level agreements – shared a positive vision for NFT sports collectibles and told Cointelegraph: ‘Since Sports Betting is a $ 200 billion + market, we can capital is expected to be re-allocated to NFTs, which will be both an emotional and financial hedge against empty stadiums and arenas. ”
Although collectibles for games, arts and sports are the leading industries for NFT acceptance, there is underlying potential in other markets. Yat Siu, co-founder of Animoca Brands – a platform for blockchain games, including F1 Delta Time, MotoGP Ignition and other sports-related projects – believes that NFTs can make a mark in many other industries and tells Cointelegraph:
‘At the moment we see that NFTs have a powerful impact on all forms of digital content, such as digital art, collectibles, games and recently music, but eventually everything else will follow: medical, fashion, financial, manufacturing, agriculture, insurance – you name it, and it will have appropriate applications from NFTs. ”
NFTs: just another trend?
NFTs, and decentralized technologies as a whole, are changing the landscape for digital content creators and consumers. It allows anyone to earn money directly from their work by making contact with fans and removing cumbersome middlemen. This ensures transparent ownership of their creations, which can be any form of digital media, be it photos, memes, GIFs, videos, music, books or even domain names.
Although there is still a long way to go before the adoption of mainstream is achieved, there are already signs of large enterprises emerging and becoming NFT pioneers. It is highly likely that more recognizable brands will enter the space. Ian Friend, co-founder of DeFi project Ferrum Network, conceded that mass adoption by companies has already begun and is likely to continue, telling Cointelegraph: ‘It’s already happening. Major brands that do not adapt this year will catch up. ”
It’s not just about hype: NFTs are potentially responsible for a significant paradigm shift in digital content sharing in various industries, including arts, games, real estate and more. It may even appear that they have a dominant presence in future virtual economies, especially in the sports sector, where the biggest demographic crossover appears to be among young, technological “geeks”.
Several industries will be disrupted, and the markets for collectibles will be changed forever by NFTs. JD Salbego, CEO of AnRKey X – a blockchain-based protocol platform, which uses DeFi and NTFs for the esports game industry, told Cointelegraph: “We are already seeing this in the form of engagement, where serious institutions are beginning to recognize the value of unmatched security, authenticity and traceability for non-fungible assets in a digital environment.”