The boom that swept the crypto world in 2021

Highlights

• Non-Fungible Tokens (NFTs) are digital tokens based on blockchain technology that cryptographically represent the ownership of physical and digital assets of real-world items such as real estate, music, art, videos and more.
• The NTF transactions are secured by the Ethereum blockchain that can’t be modified or replicated.
• As crypto market is still a developing industry, NFTs is new branch of the crypto market.

Though the cryptocurrencies first surfaced in 2009, the cryptocurrencies reach a whole new level in 2020 and 2021. One of the greatest feats was the introduction of Non-Fungible Tokens or NFTs, which emerged as a sensation this year. It is regarded as the next generation of crypto technology that is grabbing everyone’s attraction.

Non-Fungible Tokens (NFTs) are a digital token based on blockchain technology that cryptographically represent the ownership of physical and digital assets of real-world items such as real estate, music, art, videos and more. NFTs are represented through the ERC-721 token that are unique for every ownership of these assets that can be bought and sold for real money, either in other non-fungible investment or digital coins. The NTF transactions are secured by the Ethereum blockchain that can’t be modified or replicated.

Recently, Adidas made over US $23 million in Ethereum and mined around 30,000 non-fungible tokens (NFTs) during its first NFT efforts. The company also announced that it would soon launch its NFT line, Into the Metaverse, along with partnership with Bored Ape Yacht Club, GMoney and PUNKS Comic.

Vodafone has also auctioned the first-ever text message as NFT for US $121,000, which says “Merry Christmas”, and the proceeds will go to UNHCR, to support forcibly displaced people. The winning bidder will receive an exclusive ownership of detailed and unique replica of the original communication protocol that transmitted the world’s first SMS along with a guarantee certificate signed by the Vodafone’s CEO Nick Read.

As per CoinMarketCap, the NFT market cap stood at US$20,915,561.73 with a total sale volume of US$133,790.02 on 23 December 2021 since it was launched in 2015.    

In 2020, the sale of NTFs stood at US$250 million, up by 82% from US$141 million in 2019 and during the first quarter of 2021 the sale reached a volume of over $2 billion.

Further, there were two major peaks in the NFT space this year, the first happened when the most expensive NTF was sold for US$69 million in March 2021, which led to increase in the total monthly sales volume in the art NFT market to US$83 million on 1 April from US$32 million on 1 March.  

The second jump came on 31 July, when the total all-time yearly sales of the collectible NFT surged to US$4.65 billion by 30 September from US$1.2 billion. 

Also read: NFTs top art world list: What's next for crypto art?

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Image description: The NTF transactions are secured by the Ethereum blockchain that can’t be modified or replicated

Why are NFTs so popular?

Since January 2021, NFTs started gaining enormous traction and the Google search between January and October gone up by 5,425%. There could be various reasons which contributed to the sudden hype in the NFTs.

In 2021, cryptocurrencies gained huge traction across the world and attracted a host of retail investors and general crypto users, which also shifted the attention towards the NFTs.

With the emergence of innovation and unique play-to-earn new model in decentralized games that helped to built online communities that offer users enough reasons to buy NFTs. Also, Elon Musk’s statements in relation to Dogecoin and Shiba Inu drew attraction of people around the world.

NFT platforms such as Rarible and OpenSea started gaining tractions as they made it easy for creators and artists to view, share, mint and collect their own NFTs. Further, the use of Decentralized Finance (DeFi) in NFTs helped the artists and creators to earn passive income. 

All these reasons led to sudden boom in the NFT space, leading the creating of some of the best NTFs.

Also read: How is StarShip NFT wooing its investors?

The boom that swept the crypto world in 2021

Risks with NFTs     

As the crypto market is still at a nascent stage, NFTs is its newest branch. NFT space may see a huge correction and at some stage it may reach a breaking point and its price will drop substantially in value.

However, the technology behind NFTs and NFTs themselves are believed to stay here for a while now as we can see all major businesses dipping their shoes in the NFT space. Recently, Facebook changed its name to Meta and are putting efforts to create the Metaverse.  NFTs has fully digitalized the art and collectable market for the first time and blockchain technology is also evolving and within it, the concept and its needs are also evolving. Surely, we would see more reports and articles in this space in 2022.  

Also read: Are NFTs going to bring digital revolution?