Non-Fungible Tokens are currently revolutionising and taking the digital asset industry by storm. The world is transforming and becoming more digital, leading to even greater markets, systems and technologies that did not exist before being developed and used to adapt and benefit people. Part of the evolving technologies greatly leading and partaking in this evolution of digital assets is blockchain technology and NFTs.
NFTs are unique assets such as works of art, digital content, music, films, and other media types represented by blockchain-based tokens with valuable information. In essence, NFTs are real and digital collectables. So, for example, through an NFT, a person would acquire an original but digital version of the artwork coupled with exclusive ownership rights rather than buying a real piece of art.
A network of assets that may be shown and traded is another function of NFTs. The creators of these digital assets can then resell their works on cryptocurrency exchange platforms like Ethereum, where they can turn their works of art into digital tokens and get paid automatically each time they are sold again.
The history of NFTs: where do they come from?
NFTs are on everyone’s mind, especially considering how much of an impact they have on Web3 and digital assets. This begs the question: Who was the genius behind the developing field of NFTs? Well, the name is Kevin McCoy. Kevin is an American artist who in 2014, reshaped the digital economy and ecosystem by minting on Namecoin the first-ever NFT creation known as Quantum – a generative work of digital art or an octagon-shaped animation that sold at The Sotheby’s Native Digital auction in 2021 for $1.47 million, making it one of the most sought-after and most expensive digital artworks at the time.
The selling of this digital artwork laid the foundation for NFTs as an industry – further creating an opportunity that would allow artists from all walks of life to have equal opportunities and, most importantly, sell, track and have complete ownership of their artworks and remuneration of the art, without the need for agents and other middlemen. In addition to the aforementioned, it’s crucial to remember that the NFT trading and ownership transfer processes encountered difficulties and setbacks during the minting of Quantum. Major difficulties included a lawsuit for ownership conflicts that arose from Namecoin, the blockchain on which McCoy had built the NFT. Namecoin sued McCoy because he disobeyed the requirement for regular renewal of registrations on Namecoin in 2015. These problems, however regrettable at the time, sparked the creation of further NFTs that would solve the issue and further the growth and development of the NFT sector.
The rise and evolution of NFTs
As mentioned earlier, NFTs were established in 2014 but only attained traction and popularity in 2017 through Ethereum. During this period, the first NFT collections on the Ethereum blockchain began to take shape, providing an enduring answer to NFTs’ issues. Prior to this, trade and transferring ownership were quite challenging with the functioning blockchains; as a result, the sector did not gain popularity. However, the Ethereum network later included the ability for smart contracts, which allowed for the integration of token generation, programming, storage, and trading into the blockchain itself. These additional capabilities made it possible for NFTs to be more easily accessed, with fewer restrictions and easier onboarding.
Following 2017, NFTs experienced their biggest growth, thanks to a surge in interest that led to an increase in the value and price of NFTs due to their intrinsic popularity. The COVID epidemic, which forced people to use digital tools and technologies to connect and feel “normality and functionality” because normal either didn’t exist totally or was constrained, was one of two key elements that fueled the aforementioned. During this time, the use of social media sites like Twitter and other platforms, where a robust and long-lasting NFT and overall digital asset community was built, increased, as did digital marketing. This, along with an inclining demand for high-value artwork sales, were the two prominent factors that greatly revolutionised and fuelled the digital asset industry along with its technologies.
The third factor in regard to the above is Beeple – a collection of digital artist Beeple’s NFTs sold for more than $69 million in 2021. The transaction established a standard and a record for the most expensive works of digital art ever sold. The piece of art was a collage made up of Beeple’s first 5,000 working days. Additionally, Beeple made history as the first digital artist to partner with a significant auction house to sell NFTs. Beeple’s digital art, which has a tremendous value, sparked interest in non-fungible tokens.
NFTs are very marketable, particularly digital art and collectables, as seen by Jack Dorsey, the inventor of Twitter, who said in his first tweet that he was “just setting up my twttr.” This was the first-ever NFT representation of a tweet due to its $2.9 million sale. The “Right-click and Save As Guy” by XCopy, which sold for $7 million, the CryptoPunks NFT, which sold for approximately $11 million in an auction, and Edward Snowden, a former computer intelligence consultant, who created an NFT called Stay Free and sold it for approximately more than $5 million were some of the NFTs that were sold for shocking amounts of money in 2021.
More artists, regular people, and businesses followed the market trend after the 2021 NFT surge and invested in and adopted the idea of NFTs. Apart from the significant demand and growth in popularity, this was mostly driven by businesses’ desire to generate profits during the height of the pandemic by entering uncharted regions and markets. Famous brands like Coca-Cola, Nike, Adidas, and others produced NFTs tied to their products and sold them for astronomical prices due to rising demand.
What does the future look like for NFTs?
Our blockchain experts at Bitai Method deduce that blockchain technology and NFTs are only just developing and are thus growing concepts. We believe that as the years progress, so will there be a surge in technological innovations that will not just lead to the emergence of new concepts and technologies meant to contribute towards the growth and development of the digital asset industry as a whole and web3, but these innovations will render solutions, edify and expand on the concepts and systems that exist now to build the digital asset sector.
Functionality, sustainability, profitability, ease of use and security are a few factors we must consider when dissecting anything cryptocurrency-related. Now, with NFTs, we need to ask ourselves, do they serve a need? Are profits being made? Are those profits sustainable along with the markets from which the mentioned would culminate? If yes, then we can exclaim that the future looks bright for NFTs. It is also important to note that the NFT market is risky and extremely volatile, similar to stock markets. From a different angle, however, volatility or a feeling of market instability enables investors to build buy-low, and sell-high strategies, which opens up the possibility of extremely high gains. The best time to separate the strongest projects and holders from the weakest is also presented by a tumultuous market, which adds to this.
Community, culture, and utility—aspects that we believe are important to Gen Z—are the three pillars on which the value of NFT collections is based. Why does this matter? Compared to millennials, Gen Z is more inclined to invest in cryptocurrencies and NFTs than stocks, according to a study. As digital assets become more widely used and accepted, their investments will support markets. The world as we know it is changing and turning more digital; in the long run, systems, technologies, laws, and global economies are bound to transform. Already more people are working on NFTs, blockchains, and cryptocurrencies than ever before, which will become an increasingly common sight as more markets emerge, leading to new and different career paths. Gen Z is undoubtedly more tech-savvy and more open to deviating from traditional paths.
To support the above, a recent LinkedIn report shows that from 2020 to 2021, job postings in the U.S. with titles containing the terms “Bitcoin,” “Ethereum,” “Blockchain,” and “cryptocurrency” increased by 395%, outpacing those in the broader tech sector, which saw a 98% increase in listings. Although software and finance accounted for the majority of job ads, there is an increase in demand for crypto talent across all industries. These include the employment and computer hardware industries and professional services like accountancy and consulting.
Non-Fungible Tokens (NFTs) have emerged as a game-changer in the digital asset market, completely altering how we see digital content and ownership. NFTs, distinctive digital collectables represented by blockchain-based tokens, have upended established digital ownership and transaction structures, creating new possibilities for producers, artists, and collectors.
The first-ever NFT, Quantum, was made in 2014 by American artist Kevin McCoy. This is where NFTs initially emerged. Despite early difficulties and legal issues, Quantum created the groundwork for the NFT sector, which has since developed and grown quickly.
By eliminating the need for middlemen, NFTs have allowed artists, makers, and collectors to sell, track, and fully own their works. The development of a network of assets that can be shown and traded has also been made possible by them, opening up new avenues for the trade and valuation of digital assets.
As a result of giving users a new method for producing, acquiring, and exchanging digital content, NFTs have revolutionised the market for digital assets. NFTs are poised to play an ever-more-important role in the digital economy, presenting fresh possibilities and chances for both artists and collectors, thanks to their expanding market and rising popularity.
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