The cryptocurrency and blockchain technology market reached an unprecedented level of popularity in 2021, with Non-Fungible Tokens (NFTs) being one of the major highlights of this sector. This term even won the Collins Dictionary word of the year award and topped the list of the greatest influencers in art by ArtReview.
Popularity and Use
An NFT can be defined as a digital token that aims to represent something, whether from the physical or virtual world, created using blockchain. While Bitcoin and Ether have, for example, the function of being a means of payment, non-fungible tokens exist to be unique assets.
For example, a Bitcoin will always be the same as another Bitcoin. This is not the case with NFTs, as the blockchain network ensures each token created in this format is unique. As such, there can be no authentic copies of it. This makes it possible for NFT owners to be protected against others copying or using copies of a specific asset. In this sense, blockchain and NFTs challenge the idea of authenticity in the digital world, effectively creating legitimate virtual tokens.
This type of asset has increasingly gained space in various market segments, with both crypto and tech enthusiasts heavily investing in this new technology. In addition, NFTs have become popular among celebrities, including actors, musicians, and internet personalities. As a result, this has led to a large number of people entering the market by buying or launching collections using this format. While at first tokens had a symbolic price, with small artists working to sell their virtual pieces, the business has since attracted wealthy investors who have valued some of these tokens at tens of millions of dollars.
NFTs have become so popular that they have spawned the creation of many kinds of digital art, including pixel characters and other tokens made using generative art. Within the gaming industry, NFTs have been used as in-game assets, such as digital plots of land, which can sometimes be controlled by users instead of game developers. In addition, NFTs have also inspired the creation of games inspired by this technology, such as virtual slots. For instance, ‘NFT Megaways’, featured in Playerz Online Casino, draws inspiration from the crypto scene and lets players explore a pixelated virtual world while looking for high-paying symbols. Similarly, in the music industry, this innovative technology has also been employed by artists selling artwork and music as NFTs.
Globally, 2022 is expected to be the year of non-fungible tokens. Reports indicate that NFT market capitalization currently stands at over $40 billion, an impressive number considering this technology is only in its early stages. In India, the scenario is no different, except for how the Indian market is reacting to NFTs. While there are plenty of creators, collectables are still finding their way as assets. Indian collectors are yet to find the best way to flip tokens, as they are struggling to generate interest in virtual assets that stand as art. Another possible and more interesting path is to use NFTs as a currency that can be exchanged for goods and services. For now, NFTs have only found solid ground with Bollywood and cricket fans gravitating towards celebrities and their limited collections.
A Multi-Million Dollar Trend
The concepts of scarcity and digital authenticity can explain why some of these tokens are being sold for exorbitant values. Artist Beeple, for example, sold one of his works in NFT for $69 million at an auction last year as reported by Techilive. NFTs have also come to be explored as commercial alternatives in the world of sports, as teams and athletes have launched their own collections of tokens. For instance, the NBA made millions with its Top Shot collectable digital cards.
Recently, NFTs have also expanded their popularity in India, with several high-profile celebrities investing and endorsing this new business. One of the first stars to have entered the NFT market was Salman Khan, who began selling NFTs from the famous film franchise Dabangg as detailed by Lifestyle Asia. Similarly, cinema legend, Amitabh Bachchan has created and auctioned his own NFT collection, which became known for receiving the highest-ever bidding in India. Even Rajinikanth partnered with a Singapore-based NFT marketplace to launch his movie collectables based on the 2007 film ‘Shivaji the Boss’.
Ultimately, it is likely that most sectors will continue to invest and adhere to NFTs, especially in the art and technology sector. In addition, in the future, NFTs will be essential in the successful creation of projects related to the metaverse and its monetization.