What is the future of non-fungible tokens (NFT)?
In 2017, CryptoPunks launched on the internet and found a niche audience. Not long after that was the launch of CryptoKitties. It was in the same vein as CryptoPunks and it found a dedicated fanbase. What many people did not know at the time was how these two projects became the building blocks for what was to come. Fast forward to 2021 and NFTs are the only thing everyone talks about. Visa purchased an NFT for more than 160,000 USD and threw their support behind this technology. NBA Topshots gave a way for fans to connect to their favorite players and Axie Infinity popularized the idea of NFT games.
NFTs are incredibly popular today as everyone seemingly cannot get enough of them. The ability for anyone to turn a digital asset into an NFT and sell is one reason why this trend shows no signs of fading away.
How NFTs changed the online economy
Presently, the digital economy includes NFTs, virtual real estate, social media platforms, and game economies.
One of the most significant changes to take place here is the digital economy’s growth. Analysis indicates that the value of digital products exchanged on virtual markets may reach seven trillion USD by 2027. Participation drives growth and we see this in every other form of trade. More consumers participating in the market increases the market’s value and helps the market grow.
Investors and analysts speculate that NFTs will shift from a mainstream topic to a commonplace one. The wide use case potential of NFTs shows how they become part of the norm. Additionally, content producers will choose NFTs as a monetization method and supplement their current income. They can adopt this model while creating new experiences for the audience.
Future of NFT in business verticals
P2P sales and supply chain are the two immediate use cases for NFTs.
The traditional art marketplace is where a user sells their art and divide the revenue between them and the third party. This business model is where the third-party member takes a majority of the revenue and what’s left goes to the artist. The artist who puts the time and effort to develop the content gets minimal returns while the intermediary profits from connecting the buyer and seller.
That is how auction houses worked and that’s how online art marketplaces worked. Then came the NFT craze and things changed drastically. NFT in art saw immediate success enabling artists to maintain digital ownership of their work. NFTs gained such popularity that led to the NFT marketplace. This online marketplace is a decentralized platform working on a blockchain network.
On an NFT marketplace, the artist turns their artwork into an NFT and sells it. A buyer uses cryptocurrency to make the purchase and the artist earns a significant portion of the revenue. The NFT marketplace charges a minimal fee, but that amount is mostly negligible. There are two significant advantages the NFT marketplace provides over a traditional one. The first advantage is the lack of third-party involvement. The second benefit is the artist earns more for their hard work.
The year 2022 will see a significant increase in NFT in art. More digital artists will register on these platforms and reap the benefits. The NFT marketplace makes it easy for artists to work online and generate revenue. In fact, analysis indicates there will be an increase in digital art in 2022 thanks to NFT. This increase leads to significant demand for NFTs as people search for new ways to express themselves through art.
NFT trends in 2022
The NFT is booming and that hype will see a significant increase next year. 2022 sees more investors joining the hype and that leads to significant industry growth.
Visa’s announcement that it purchased a CryptoPunk for one and a half million USD was a sign to investors and people on the fence about NFTs. Payment giant Visa saw the future of NFT and decided to get in on the bandwagon. Visa’s purchase resulted in other companies following suit. This influx of investment attracts more investors who don’t want to miss out on a potential game-changer.
NFT trends indicate a great number of new markets are coming
Experts indicate that the rising number of NFT marketplaces results in the creation of new markets. Already, we see NFT in sports, NFT in music, and NFT in games, with each market achieving resounding success. There is potential for more though as retail companies, fashion labels and entertainment brands also consider the potential future of NFT in their industry.
There was a spike in interest in NFTs in 2021 but 2022 is the year they take off. Many market experts predict a significant increase in market volume in the coming twelve months.
A notable deciding factor when looking at NFTs in 2022 is the demographics. The GenZ and millennial generation grew up in a digital ecosystem and want to immerse themselves in all things digital. They naturally tend towards luxury goods, music, art, and sports.
Another reason why the future of NFT is green is their influence in reshaping business paradigms. Take the NFT marketplace as the best example. This online store forever changed the way people buy artwork and created a robust way for artists to generate revenue. Now, artists can verify ownership of their content, incorporate criteria to earn royalties, and establish a lasting revenue generation stream.
However, investors should always make an informed decision before investing. Presently, the NFT market is relatively new and open to speculation. Investors here should remain cautious when venturing into this new frontier. Some NFTs may become worthless after a few years while others could increase in value.
The NFT market today is like the early internet: it is difficult to find what you’re looking for. A dynamic landscape prone to changes in tastes and trends requires investors to exercise caution before investing.
NFTs will penetrate everything in 2022
Experts claim that NFTs will reach greater heights in 2022. Stablecoins dominated the conversation in 2019 and the introduction of Libra was the hottest topic of 2020 and 2021. NFT was popular in 2021 but their time in the sun will come in 2022.
An NFT’s extended lifecycle and capacity to provide new monetization models is one reason why they are steadily entering the online gaming market. Blockchain-based game creators are developing games around a play-to-win model and attracting investors.
The CryptoPunks project was the first notable success for NFTs, however; their full potential remains untapped. Governance tokens and art document tokenization in the NFT sector are some examples of areas where non-fungible tokens have a notable impact.
NFTs can transform markets like the supply chain and real estate industry. In fact, they can provide the solution to overcoming real estate problems. Every day, we’re seeing growth in the NFT market as more people invest and unlock the potential of the new technology. We may not know exactly what the future holds for NFTs, but looking at it now, it’s safe to say things look good.