What Are Non-Fungible Tokens (NFTs), and Why the Increased Traction?
You might have seen several celebrities launching their collectibles with digital assets approach.
Bloomberg’s Thursday reports revealed the New York Stock Exchange (NYSE) is joining the non-fungible token (NFT) marketplace, planning to do for crypto what it does for the stock market. Moreover, several sportspersons and celebrities are venturing into the NFTs world.
Bhuvneshwar Kumar, an Indian pacer, plans to launch his non-fungible tokens. However, he isn’t the only one in that sector, joining the likes of Virender Sehwag, Rishabh Pant, Sunil Gavaskar, Yuvraj Singh, Dinesh Karthik, and other cricketers already jumped into the bandwagon.
Nevertheless, the veteran pacer Jhulan Goswap was one of the first Indian sportspersons to enter the NTF industry. Meanwhile, several celebrities from Salman Khan to Amitabh Bachchan have introduced their collectibles in digital assets form.
The non-fungible token market witnessed an impressive 2021, registering trading volumes worth more than $23 billion. That is according to DappRadar reports. Meanwhile, Game NFTs amassed more than $4.5B in trading volume, representing 20% of overall NFT sales in the past year.
NFTs attracted attention from market players with impressive sales from $106 million in 2020 to 2021’s $44.2 billion (Chainalysis reports). So, what are NFTs, and why are they gaining increased popularity in regions like India?
The crypto boom had individuals interested in digital art. From CryptoPunks to Bored Ape, cryptocurrency fans appear to splurge on everything. NFTs are digital assets that utilize blockchain technology to document ownership of items like images, videos, music, etc. Users buy them using crypto.
Non-fungible mean irreplaceable and unique. For instance, money is a fungible item (the value remains even after moving from different individuals). Also, crypto is a fungible asset. Nevertheless, NFTs are unique (digital art can hardly equal another’s value). Also, NFTs ensure exclusive ownership privileges. Individuals own digital artworks one at a time.
Crypto and NFT – Differences
NFTs use similar programming like crypto, but similarities end there. Nevertheless, crypto is a fungible asset, meaning individuals can exchange or trade it. However, NFTs remain unique due to a digital signature, making it impossible to equal them or exchange with another. NFTs may never be equal in value.
How NFTs Work
Users access NFTs on blockchain platforms like the ETH network. Users can convert their photos, music, doodle, or videos into NFTs and sell them. For instance, Jack Dorsey’s tweet sold for over $2.9 million.
NFTs allow creators to monetize artwork through direct sales. Moreover, they may receive royalties when a new owner purchases the art.
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