NFTs, The Cryptocurrency of 2022
Starting with pioneers like Crypto Kitties allowing players to buy, trade and breed digital cat collectibles within its ecosystem, NFTs have evolved, leading digital art into a new and potentially more promising future. Underground designer FEWOCiOUS collaborates with RTFKT to create 600 digital trainers, making $3.1 million in just 7 minutes.
At famous auction house Christie’s, a Beeple NFT piece (The First 5000 Days) sells for $69 million. Starting with a market cap of $41 million in 2018, this figure has now grown to around $7 billion – the NFT space is exploding and it’s expected to continue.
What is an NFT?
An NFT is simply a digital certificate that represents an asset that cannot be substituted. As every transaction is listed on a blockchain network, users can verify an NFTs purchase history and creator. Information on the blockchain is encrypted, making it very secure and giving digital creators a new type of protection and a clear way to monetize their work.
As NFT terms are customisable, a tech-savvy creator can write in a royalty clause for subsequent sales, NFTs can mint other NFTs and there are so many different uses, it’s easy to see why they have taken off, appearing in video games, music, gifs, digital art, collectibles, finance & even sports memorabilia.
Though NFTs can arguably be seen as a form of cryptocurrency, and are built with similar programming, the main difference is crypto’s fungibility – as like physical currencies it can be easily traded for another coin of equal value. Typically held on the Ethereum blockchain, NFTs can be minted or created from both tangible and intangible pieces.
What’s next for NFTs?
Finance expert from the University of Sussex, Carol Alexander says the NFT boom is just beginning! She predicts that proof of ownership will soon only be in NFT form – which could solve the current problem of transparency about transactions and exchanges. Gary V, NFT tastemaker and CEO predicts that the NFT wallet platform could become the new social media.
Samsung has announced plans to support NFTs in their next generation of Smart TVs. The new technology will offer a screen-based NFT explorer, marketplace aggregator and platform to purchase and display NFTs. Popular digital wallet Meta Mask says they are working on providing better support for NFTs and hope to allow users to manage their digital assets while using its browser extension, as currently managing them on Meta Mask Mobile currently depends on which blockchain network they are on.
While there’s growing concern around marketplaces like OpenSea centralising NFTs and making them difficult to move across platforms, as a new technology there are bound to be growing pains. Like Cryptocurrency, the NFT marketplace requires some regulation, and any developments in this space will need to be considered carefully. Over-regulation could hamper the market’s potential and kill innovation, while under regulation could encourage illegal activity.
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