According to data from DappRadar,NFT will flourish in 2021, with transaction volume exceeding one billion U.S. dollars in the past 30 days. Although many of these transactions are motivated by speculation and profitability rather than genuine belief in the field and its collections, it marks the legalization of this asset class and heralds the bright future of blockchain technology future.
NFT is a unique asset minted and stored on the blockchain. You can think of them as transaction cards, where only a certain number is available, and users can buy and sell each other through the market. They are irreplaceable because each NFT is unique, not equal and interchangeable like cash.
CryptoKitties is the first major NFT platform to appear. It came out in December 2017, allowing users to buy and sell kitten digital artworks. Today, it accounts for only a small part of the NFT transaction volume and has been taken over by other projects.
In the past 30 days, the largest NFT project with a transaction volume of more than $281 million is NBA Top Shoot . This is a platform built on the Flow Blockchain, allowing users to buy and sell NBA’s “wonderful moments”. Composed of great videos of NBA stars, such as dunks. Since its release at the end of 2020, the number of users of the platform has surged to more than 300,000.
The second largest Ethereum-based NFT is CryptoPunks, which allows users to trade more than 10,000 unique and collectible pictures of characters. In the past month, a transaction volume of 108 million U.S. dollars was created.
To ordinary people, these pictures and videos may look interesting, but they are definitely not worth tens of thousands of dollars. To some extent, they are right, because many current NFT transactions are based on pure speculation. Many users do not buy NBA moments as collectibles, but hope that their valuation will rise, just as people buy sports shoes or other assets such as Beanie Babies hoping that they will increase in value.
The best example is an NFT artwork sold at auction for more than $69 million, making its author Beeple the third richest living artist in the world. This title should belong to a household name, but it was awarded to Beeple. After selling the works, he admitted that there seemed to be a bubble in the NFT field. Investing in NFT artworks was extremely risky, and many artworks eventually became worthless.
When everyone buys collectibles for the purpose of selling them, rather than saving them as novelties, they will definitely be overvalued and highly speculative. Some people think what we see in the NFT field That's it.
However, others believe that these NFTs are the next wave of art, and users can own the next Picasso by purchasing CryptoPunk or NBA moments. These NFTs represent the true digital ownership of a work of art and therefore have great value.
Fortunately, for the long-term development of NFTs, they are not only applicable to artworks, but also have many use cases in the real world. NFT may have a revolutionary impact on traditional industries. For example, MetisDAO uses NFT as a "passport" to track users' reputation and collaboration history in its ecosystem. In addition, Enjin Coin is building a platform that allows users to use video game projects as NFTs. This means that users can own a sword in a game like Minecraft and transfer it to another video game like Fortnite, which is unprecedented. One of the most promising use cases is the storage of official documents, such as property rights, birth certificates, and identification. This will allow anyone to virtually save their most important files and enjoy all the benefits of blockchain, such as privacy and verifiable legitimacy.
Even though digital pictures may not always have a valuation of millions of dollars, and may not necessarily have a transaction volume of 500 million dollars, the current prosperity of NFTs represents a major victory for blockchain technology. It brings users' adoption and awareness of these platforms, and will make more users willing to use blockchain wallets such as MetaMask and send transactions to smart contracts. The future use cases of NFT will continue to evolve, enabling the industry to surpass the speculative trading of digital art and helping to realize the future of the Internet. Maybe these NFTs are the future Picasso, Leonardo da Vinci and Michelangelo, let us wait and see!