Till a few years ago, very small fraction of investors saw potential in NFTs. But in 2021, the market opened up to massive NFT pitches globally. Is this a passing fad, or will the growth continue?
A decade ago, you’d have scoffed at the idea of a wedding in virtual space. Not anymore. A Chennai-based couple recently celebrated their wedding—Asia’s first on the metaverse—where people interacted through their avatars. Even the bride’s late father attended!
That’s not all. The couple also launched non-fungible tokens (NFTs) featuring them and the wedding invitation. “We launched 10 unique NFTs of around $25-150 which were resold for $1,000-2,000. The response was huge,” says Dinesh Kshatriyan, the groom, who is a project associate at IIT Madras.
NFTs have come a long way from the time when only celebrities created and sold them for millions. “NFTs are slowly but surely becoming a part of our everyday lives. Not only are NFTs a great business opportunity, they are also a new way for people to enjoy themselves while making money. That’s why NFTs are here to stay,” says Toshendra Sharma, Founder and CEO, NFTically, a Polygon-backed NFT marketplace.
As the world embraces the metaverse, NFTs will become the thing to own. “Owning an NFT would give people access to certain exclusive things in the metaverse… Collectors can access unique and credible artworks in the form of NFTs from around the globe. Since the NFT market is booming, some collectors are also looking at NFTs as a long-term investment option,” says Sandesh B. Suvarna, Co-founder and Vice President, WazirX NFT Marketplace.
Why are people buying jpegs and gifs?
You’ve heard of the deed that represents a house without being the physical house? That’s what NFTs do. It is a type of programmable deed of ownership to an asset that exists on a blockchain. This digital deed gives its holder the exclusive ability to use, sell and transfer the asset’s ownership rights. Here, an item can be made unique by giving it a code and the ‘digital deed’ or token—which cannot be replicated—proves one’s ownership of that digital asset.
NFTs can offer anything from GIFs to digital art to static images. The USP of an NFT is that it is used to prove ownership of a digital item; The use-cases for NFTs—run on blockchains such as Ethereum and Matic—are varied. An NFT can be looked at as an authentic digital art piece or an asset which can be used to earn cryptocurrency in games. Artists also use them to prove ownership of their digital art, which often includes JPEGs or GIFs, paintings, audio or video files, or any other type of digital file, says Vikas Ahuja, CEO at crypto trading platform CrossTower India. The file is stored in decentralised storage and an NFT can be created to prove its ownership.