Non-fungible tokens or NFTs have disrupted the crypto and industries such as gaming, art, music and more, in 2021 and is likely to do so in 2022. Meta (Formerly Facebook), Reddit, and Twitter are going big on NFTs as they gear up with their NFT projects. With new players joining the NFT space every day, what does the future hold for the digital assets next year? Read to find out.

Why are NFTs rising in popularity?

NFTs have transformed the way people associate with art, music, collectibles, and sports in the past few months and there is anticipation that their usage will eventually extend to other digital media. The NFT market has existed since 2014, but the recent exponential growth has been boosted by their demand and an excess of market liquidity.

The concept of non-fungible tokens (NFTs) refers to digital assets that are linked to the blockchain, the underlying digital database of cryptocurrencies such as Bitcoin and Ethereum. By contrast, fungible tokens can be replaced or exchanged with another identical one, for example.

The emergence of Ethereum led to these projects being ported over to Ethereum's virtual machine, which allowed them to leverage the smart contract layer of Ethereum. The subsequent rise of CryptoPunks and CryptoKitties in late 2017 caused the NFT scene to explode and draw attention.

Among the reasons of the popularity of NFTs is that they can be used to trace the digital provenance of an object, thereby proving ownership to people. Broadly speaking, NFTs create scarcity so that something can be sold for more money because it is scarce.

According to some, NFTs will be a part of all purchases in ten years while others speculate that smart contracts will replace legal documents.

Who are using NFTS?

Sales volumes for NFTs in 2021 have soared to new heights. While they were just over USD 95m in 2020, they jumped to USD 1.2bn in Q1, USD 1.3bn in Q2, and USD 10.7bn in Q3.

An NFT of Beeple's work sold for $69.3 million (€58.9 million) at auction in March, breaking all records for previous NFT sales. Winkelman is a conceptual 3D artist who lives in New York City.

Kings of Leon recently became the first band to launch an NFT. The band is selling three different tokens: one for the new album, another for perks such as front row tickets for life, and a third for audiovisual art.

Searches on NFTs found Dorsey's first tweet to be the most popular. The second most popular project by search was Hashmasks, which was assembled in collaboration with 70 artists worldwide. The project "sold its collection of 16,384 NFTs" in February.

Future of NFTs

NFTs are expected to surpass Coinbase's cryptocurrency business, which generated about $1.3 billion in revenue during the third quarter, according to Brian Armstrong, CEO of the largest cryptocurrency exchange in the world. The growing blockchain-related opportunities will allow superfans to fuel creativity from their favourite artists in 2022 using their collective decentralized power.

Takeaways

It is likely that the NFT craze will peak in 2022 beyond in-game collectibles, artworks, and sports memorabilia, growing immensely during that year. With the wider use of the blockchain, NFTs are likely to be here to stay in some form or another, due to their usefulness as ownership records in business and new use cases.

We have already seen Visa, Twitter, and Adidas build their latest marketing campaign around the metaverse trend as evidence that mainstream adoption is on an upward trajectory as we head into 2022.

NFTically is a growing platform and global B2B SAAS that enables creators launch their own NFT marketplace. Join our Telegram and Discord communities to know more and stay informed about the latest NFT trends. For more info visit https://bit.ly/3py3f4Q