Non-fungible tokens (NFTs) are unique digital assets based on blockchain technology representing digital asset ownership. These digital assets represent ownership of real-world objects such as artwork, video clips, video games, music files, and more.
NFTs are currently among the most sought-after digital assets. In the last couple of years, NFTs have become very popular. Their novelty, ease of creating, and appeal as collector’s items contribute to this popularity.
Billion $ Industry
Over the past 2021, NFTs have become popular across industries ranging from collectibles to games. This digital asset has moved ahead with $26.9 billion worth of crypto traded on popular Ethereum smart contract types linked to Ethereum NFTs. Another analysis stated a 230X Jump – Transaction worth $100million in 2020 touched $23bn in 2021.
What’s so special about NFT
Each NFT is mutually exclusive and cannot be exchanged with other NFT or digital assets. This quality of exclusiveness is known as non-fungibility. It also means that NFT cannot be duplicated, replaced, or replicated. NFTs are like a form of authentication instead of a form of exchange. Ownership of NFT is sole with the person owning NFT, making the asset authentic and unique.
Above mentioned attributes make NFTs unique and scarce, and it is human behavior to put a very high value on rare things.
On the contrary, when we compare NFT with cryptocurrency, the latter can be exchanged and used to purchase products. Hence, cryptocurrencies are fungible, but NFTs are not. This aspect also provides an investment opportunity in NFT and adds more value.
From Investors views
Cryptocurrency investors say that the value of NFTs depends on how rare they are. While being scarce, NFTs benefit from transparency by listing them on a public registry, adding a layer of protection to collectibles that seem to appeal to people. The value of NFTs lies in their ability to securely evaluate, acquire and sell digital art through a digital ledger.
Sports NFTs – upcoming category
NFTs thrive in the NFT industry because they allow in-game items to be tokenized and easily transferred or sold on peer-to-peer exchanges and marketplaces.
According to the NFT creators, sports NFTs will be integrated into video games and enhanced with rare trading cards in the coming months, making these items even more popular.
Sports NFTs are selling like crazy because fans want to buy exclusive tokens associated with their teams, like signed jerseys or baseball bats, and this is just a digital extension of the study. Merchants are often enthusiastic about NFTs because they can make substantial profits selling these digital products.
NFTs represent one of the most exciting and fastest-growing digital assets and have become especially popular with retail investors. NFTs could become one of the critical components of the new blockchain-based digital economy.
The growing popularity of NFTs shows the ever-increasing appeal and expansion of blockchain technology applications. It also highlights the rising interest in decentralized digital investments and innovative ways to store value and generate income from digital assets.