who? DeFi. NFTs are the hot new stars on the crypto block
NFTs are picking up where DeFi left off, and the data suggests that asset tokenization will dominate in 2021.
The latest bull run of 2017 was defined by initial coin supply craziness, which worsened with foreseeable consequences for overvalued projects that had little more than equipment and a poorly written whitepaper. While many useful projects were able to flourish from the ICO era, including Ethereum and others, most have come and gone with the wind, leaving thousands of unsuspecting investors clinging to worthless token exchanges.
A market cycle was later completed, and now there is another rally that seems to be expanding across multiple sectors of the crypto industry, especially decentralized finance. Much has changed since 2017. Regulators have cracked down, investors have gotten smarter, and the space has matured.
Although ICOs are still relevant today as they have morphed into other forms of fundraising events such as security token offerings, initial exchange offers and initial decentralized exchange offerings, DeFi and non-fungible tokens, or NFT, they are now the popular kids on the block.
NFTs appear to be the next hot topic in cryptocurrencies, and while the numbers are still relatively small, participation and interest appear to be increasing rapidly. This shows that the sector has a lot of room for growth.
NFTs are a different class of cryptocurrency tokens. Unlike Bitcoin (BTC) or Ether (ETH), they are used to represent various types of assets that differ in value from each other. These assets can be digital or physical. Popular examples include works of art, land or real estate, and even people.
Trump-inspired art piece sold for $ 6.6 million
Inspired by the 45th President of the United States, an artist known as Beeple created an NFT called “Crossroads.” The artwork, a holographic animation depicting a defeated Donald Trump lying naked on the grass, originally sold for $ 66,666 in November 2020, however it was recently resold to an anonymous buyer for $ 6.6 million, breaking the previous record of $ 1.5 million, for a single sale of NFT.
Beeple is also on the verge of breaking another record: the highest sale of a single NFT through an auction house. The new piece of him, a 5,000 unique image work on the shady aspects of technology, politics and wealth, will go up for auction until March 11, with offers starting at $ 2.2 million.
NFTs are exploding
Recent developments are simply the latest in a series of fascinating headlines about the NFT space, and it’s not just artists who are cashing in on these kinds of tokens. With the power of independence and the demonstrable authenticity of NFTs, many celebrities, musicians and movie producers are getting involved as well.
Perhaps the most glaring example of this is the recently minted Pokémon-inspired NFTs released by Logan Paul, a popular YouTuber, which grossed over $ 3.5 million in a single day. The release featured 3,000 NFTs inspired by the Pokémon card game, and there were 44 limited edition holographic versions featuring the same Logan Paul as Pokémon.
On February 28, another record was broken when popular musician 3LAU sold NFT’s first album for a whopping $ 3.6 million. Other notable examples include musician Grimes and Mike Shinoda of the rock band Linkin Park. Even the iconic Rick and Morty TV show now has its own crypto art stamped onto the blockchain, which makes sense given the considerable crossover in the show’s demographics and the crypto space.
A genuine art movement or a cash grab?
The possible symbolism behind the strange dollar figures for which Trump’s piece of Beeple was resold ($ 6.6 million), along with the fact that the last buyer wished to remain anonymous, leaves some unanswered questions about the legitimacy of the NFT art movement in general, especially when considering how art has traditionally been exploited by the wealthy as a means of reducing tax expenditures.
Although the value of NFTs comes from their scarcity, not everyone agrees with astronomical values, with many industry commentators pointing out that digital art purchases are nothing short of absurd.
Is NFT art being used as a way to launder money or evade taxes, a practice that is not uncommon in the traditional art world, or is it really the latest craze in the cryptocurrency and art worlds, one that is possibly 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 witnessing has been slowly brewing for years. He told Cointelegraph that a new paradigm is emerging due to the limited supply of digital collectibles:
“Those who witness a large number of industry records earlier this year may not realize how long it has been building up. Various products have been boiling and building for the past three years and are now ready for mass adoption. “
The history of NFTs
Almost as old as Bitcoin itself, the first experiments with NFT were created in 2012 and were called “colored coins.” These were initially issued on the Bitcoin blockchain via protocols like Counterparty and Omni and were sometimes as cheap as 1 satoshi, the smallest unit of account for Bitcoin. These were meant to represent a multitude of assets and have different use cases. The colored coins were eventually discontinued, but they were instrumental 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 all-time high for transaction volume on the blockchain at that time. . Fast forward to 2021, and the entire infrastructure has become more robust and diverse.
A recent report from NonFungible shows that NFT transactions quadrupled in volume during 2020, from $ 62 million to more than $ 250 million. NFT’s art sales grew by leaps and bounds, outpacing any other category associated with the cryptocurrency sector. The number of active wallets also grew 97% between 2019 and 2020, a staggering number to say the least.
The report also suggests that in the long term, NFTs will play an important role in today’s virtual economy, as people will invest more money and time in virtual goods and experiences. The report also states that the current capabilities are just the beginning of the different NFT use cases, which will be integrated across different industries. It may not be long before the first financial services backed by NFT emerge. Examples can include digital insurance and secured loans.
NFTs impact different industries
The art industry seems to be in NFT’s spotlight right now. It has received the most attention and has experienced unprecedented growth. However, it is worth noting that other industries are following suit. Gaming is an industry that is perfectly suited to NFTs, and this has been made obvious by the number of cryptocurrency games out there and also by the investments made by big-name gaming companies like Ubisoft, with their game Raving Rabbids, and Atari. , with collectible retro art.
As mentioned above, the entertainment industry appears to be dipping its feet into the waters of NFT as well, and not just for artists. Tickets for live events will soon be issued using NFT-based systems, which would mitigate the counterfeiting problem that is prevalent in the ticketing industry.
Lastly, sports leagues: NFTs are easily explained as a kind of “digital baseball cards,” so it would make sense for major sports leagues to start embracing the technology. That’s already happening, with Formula 1 Delta Time, an official Formula 1 collectibles game, and NBA Top Shot, an officially licensed platform that allows you to own the best NBA highlights in the form of collectibles known as “Moments.”
Wilhem Pujar, co-founder and CEO of Stacktical, a decentralized platform for SLAs, shared a bullish view for NFT’s sports collectibles, telling Cointelegraph: “Considering that sports betting is a market of over $ 200k. million, we can expect large amounts of capital to be reallocated to NFT, which will act as an emotional and financial hedge against empty stadiums and arenas. “
Although game, art and sports collectibles are the leading industries for NFT adoption, there is underlying potential in other markets. Yat Siu, co-founder of Animoca Brands, a platform for branded blockchain games, which includes F1 Delta Time, MotoGP Ignition and other sports-related projects, believes that NFTs can make a mark in many other industries, telling Cointelegraph:
“Right now, we see that NFTs have a powerful effect on all forms of digital content, such as digital art, collectibles, games, and most recently music, but eventually everyone else will follow: medical, fashion, financial, manufacturing, agricultural, insurance, you name it, and it will have relevant NFT applications. “
NFT: Just another trend?
NFTs, and decentralized technologies as a whole, are changing the landscape for both digital content creators and consumers. They allow anyone to monetize their work directly by connecting with fans and cutting out cumbersome middlemen. This ensures transparent ownership of your creations, which can be any type of digital medium, be it photos, memes, GIFs, videos, music, books, or even domain names.
Although there is still a long way to go before mainstream adoption is achieved, there are already signs that large corporations are stepping up and becoming NFT pioneers. It is very likely that more recognized brands will enter the space. Ian Friend, co-founder of the DeFi Ferrum Network project, admitted that mass adoption by corporations has already begun and is likely to continue, telling Cointelegraph: “It’s already happening. The big brands that don’t adapt this year will catch up behind the first. “
It’s not just hype – NFTs may be responsible for a significant paradigm shift in digital content sharing across multiple industries, including art, gaming, real estate, and more. They may even come to have a dominant presence in future virtual economies, especially in the esports sector, where the largest demographic crossover appears to be among young tech-savvy “geeks.”
Various industries will be affected and collectibles markets will be forever changed by NFTs. JD Salbego, CEO of AnRKey X, a blockchain-based protocol platform that leverages DeFi and NTF for the sports games industry, told Cointelegraph: “We are already seeing this in the form of engagement, where serious institutions have started to recognize the value of unmatched security, authenticity and traceability for non-expendable assets in a digital environment”.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.