“The famous band plans to distribute its latest album in NFTs. “A popular artist recently earned 6 million dollars by selling a bunch of his NFTs.” “Jack Dorsey, the CEO of Twitter, just listed his earliest tweet in the NFT marketplace.” Have you been frequently listening to this kind of news lately? Well, it’s been a while now that NFTs have been taking the digital collectibles world by storm. And, probably you will come across such news in future also.
In fact, it’s been over a decade that crypto art has been circulating within the crypto world. However, for people who are not familiar with it, the sudden cryptocurrency surge of NFT projects is startling.
Many people wonder what is the reason that drives people to buy a piece of digital collectible in millions of dollars and why these NFTs come with such a high price. If you are also confused about the unbelievable prices of NFTs, then keep reading the article to know why they have such an enormous value.
Table of contents
- Let’s look into what people get from buying NFTs
- Why are people buying NFTs now?
- Will NFTs always be this valuable?
- Closing Thoughts
Let’s look into what people get from buying NFTs
Non-fungible tokens are based on blockchain technology. The blockchain creates a digital certificate (NFT certificate) of authenticity which is encrypted within the NFT data. This data contains information about the original creator of digital collectibles. Anyone can track the owner and check whether the digital piece is original or a copy using given information. As per the NFT expert, this functionality of NFT makes them a protector of digital artworks.
When a person buys NFT, they receive ownership rights for the unique NFT token for Digital artwork. Any physical work of art can get converted into NFT easily, including images, memes, video, or audio.
Though an NFT buyer retains the ownership of the piece, he cannot control the duplication and distribution of the exact piece by its original creator. This is because the original creator is the only one who has the copyrights of his NFTs.
This implies that NFT doesn’t make you the sole owner of copyrights of a digital collectible. Instead, you own a specific portion of the collectible at the time. And when you sell it, your ownership gets transferred to the new buyer.
Why are people buying NFTs now?
As per the NFT expert, the impact of pandemic and disturbance in the distribution of the US dollar combined is the primary driver of NFTs industry.
Currently, cryptocurrencies are hitting their highest value on record, reaching up to million dollars in terms of market cap. Since the pandemic, people are becoming more aware and concerned about saving and earning money. As per 2020 data, around 59% of working individuals efficiently saved over 100,000 dollars.
In recent times, people’s faith in national currency seems to be at an all-time low; people are more drawn towards NFTs as they can be valuable investments, said by NFT Expert.
Art in any form has been a source of income for multiple artists for decades. And, as we see, most of the best NFT tokens belong to artworks; Hence, the artists’ community is coming forward to take advantage too. In addition to this, hard-core fans of such artists are becoming the all-time investors of crypto artworks.
NFT has also become a way to connect fans and artists in a manner that wasn’t possible before. Now, fans can own a piece of art or merchandise that their favorite artist once wore or owned. This feeling is enough to drive a force to streamline multiple NFT projects.
On the other hand, artists are also finally receiving fair royalties for their work. Before NFTs, creators didn’t receive revenue once their artwork got its first sale. But, with an NFT certificate, they receive optimum sale percentage from each sale of an NFT article made by them.
However, we must note that only an artist’s or creator’s fan base does not represent the entire NFT buying community. Logically, how many fans can possibly be able to spend thousands or millions of dollars just for a single NFT? This implies that many big companies are also taking part in the NFT projects; in fact, social media giant Facebook has given out a statement for launching its own NFT trading platform for its crypto enthusiasts users.
Will NFTs always be this valuable?
As per the CEO of VaynerMedia, Gary Vaynerchuk, NFTs are emerging under a bubble, but also they have the remarkable potential to stay for or a more extended period. And, many blockchain professionals agree with his statement as well. We can consider the retaining potential of NFTs as earlier when the Internet came into existence; many people were skeptical of it. A considerable population believed it would fade away with time. But, the Internet is now proving to be a revolution for every industry today. Today, there’s hardly any workplace that doesn’t use the Internet for its processing.
Moreover, NFTs, since their existence, are only seeing growth in their user numbers. As per data collected by nonfungible.com, between the period of 1 March 2021 and 31 May 2021, the number of unique buyers in NFT marketplaces went from 20,000 to 40,000. It’s impressive to see an industry growing at this pace.
Furthermore, within the first quarter of 2021, approximately 2 billion dollars were spent on buying NFTs, as estimated by Nonfungible.com. Interestingly, this estimate is not including NFTs of NBA Top Shots, which alone makes up to half a billion revenue on top of these 2 billion. Though the future of NFTs seems to be on the brighter side, we should not ignore the market uncertainty linked to it.
From the past a few months involvement of investors outside the crypto community is on the surge. However, NFTs are still facing multiple hindrances on the way to achieve mass adoption. As per Blockchain.com , less than 1% of the population of the world (76 millions people) use a crypto wallet, which is a significant tool for NFT trading.
Learn in detail about NFTs trading, NFT marketplaces, and many more at the NFTically. Get your own NFT certificate by taking robust certification programs provided on the platform by our NFT Expert.