What Are NFTs and Why Are They Here to Stay?

Non-fungible tokens (NFTs) have whipped up a storm in the world of cryptocurrency over the past few months. They might have previously been siloed to the far-flung corners of the internet, but they are now being catapulted into the mainstream due to some high-profile sales. For example, in March this year, a British auction house sold a digital work of art, or an NFT, for 69 million dollars.

An NFT is essentially a digital asset that cannot be copied, substituted, or subdivided. They can be represented by any real-world object, more or less, such as art, music, in-game items, and videos. Many digital creators freely upload their content, so it can be quite challenging to pin down exactly what constitutes an original. This is where an NFT gives a potential collector that feeling of exclusivity in their ownership.

Let’s look at the reasons why NFTs have gained such popularity and why they are an investment built for the future.

High Profile NFTs

NFTs were created initially in 2017, but they have gained notoriety in 2021 as more people become aware of their value. Just last month, Kings of Leon became one of the first bands to embrace the innovation, by releasing their latest album as a collection of digital NFTs with exclusive audiovisual art. Additionally, clips of NBA star Lebron James dunking have sold for as much as $225,000.

Staying within the basketball world, Dapper Labs launched an NFT marketplace called NBA Top Shot, which allows fans to purchase and resell their favorite video moments from the sport they love. This brought huge attention to the technology and led to a considerable boost in NFT sales – NBA Top Shot has made $400 million in gross sales this year. Dapper Labs also launched an NFL marketplace similar to Top Shot in September this year.

A Long-Term Investment Built to Last

NFTs provide complete ownership and protection rights over artwork, video, and or music. This gives them a sense of longevity, as with any piece of art, they are likely to increase in value over time. Fundamentally, NFTs give investors more liquidity over their assets when they need it. Furthermore, by tokenizing assets, NFTs possess the potential for growth and development. Business professionals can also have more control over their products, which keeps art, music, and other formats sacred.

There is a popular misconception with NFTs that they are replicable, so it’s hard to be assured that you are purchasing the genuine original. While there have been cases of copied NFTs, the validity can be proven by checking the metadata on the blockchain explorer to identify the NFT’s hash’s location, which shows where exactly it is stored on the blockchain.

Social Media Involvement and the Future of NFTs

Twitter and TikTok recently provided an opportunity for users to import their NFT collections from their wallets onto the blockchain, with a verified checkmark based on the blockchain that the NFT has been minted on. This was an important step to legitimize NFTs further, as there were previous cases of replicated profile pictures being sold for hundreds of thousands and even millions of dollars. These moves from TikTok and Twitter demonstrate that they have both recognized the long-term value of the tokens and are keen to protect authenticity by tackling user concerns.

The values of uniqueness, scarcity, and authenticity are essential to us, which is why NFTs have great prospects. Soon it will be necessary to use them in business and sales to protect the assets and products of creatives, business professionals, and representatives of many other industries.

Find out more about how you can get involved with the purchasing and selling of NFTs with Delchain.

Share on facebook
Share on twitter
Share on linkedin
Share on email

In the News