The NFT industry has grown massively in the first two months of 2020. Non Fungible Tokens (NFTs) are mainly used to claim ownership of digital art and collectibles.
Non-fungible indicates that these tokens are not interchangeable for one another as they have unique characteristics. In 2021, NFTs have received a lot of mainstream attention, with promoters like Mark Cuban even calling them “game-changing.”
NFT Sales Through the Roof
According to data from CryptoSlam, there has been more than $200 million worth of crypto-collectibles sold in the last seven days. NBA Top Shot, the platform created by Dapper Labs in collaboration with the National Basketball Association (NBA), takes the lion’s share of these sales, amounting to $144.68 million.
CryptoPunks is the second most used NFT platform with $83.8 million in sales since its inception, out of which more than 50% of these sales ($45.4 million) came just in the last seven days.
Research conducted by NonFungible.com in collaboration with L’Atelier BNP Paribas found that the number of active wallets transacting in NFTs has grown 97% in 2020 to 222,179 from 112,731 in 2019.
The report also revealed that the total value of transactions in the NFT market was up 300% from $62.8 million in 2019 to $250.84 million.
NFTs Get Mainstream Attention Due to Unique Proposition
Due to this sudden growth in the NFT market and NBA Top Shots being associated with a high profile organization like the NBA, NFTs have received a lot of mainstream attention from the big media houses and even high profile celebrities like LeBron James and Lindsay Lohan.
As reported by CNBC, Nadya Ivanova, chief operating officer of L’Atelier, a BNP Paribas-backed research firm, stated how these collectible digital assets can be thought of as a better version of an MP3 file. She goes on to say that since musicians have struggled to earn profits from their work in a digital economy, some are moving to NFTs as proof of ownership of their work and as an additional source of revenue.
However, to some the rapid rise of the NFT market is reminiscent of the Initial Coin Offering (ICO) bubble in 2017 when multiple parties raised money through token offerings. Billy Rennekamp, grant manager at blockchain research firm Interchain Foundation, went on to tell CNBC, that he:
“wouldn’t be surprised if we go through another entire bull market and bear market”
Nonetheless, NFTs continue to snowball while these speculations continue. Even Microsoft has teamed up with the Enjin blockchain to reveal an NFT-based rewards system to honor and praise the woman in science. In fact, a digital artwork created by Mark Winklemann (a.k.a. Beeple) is set to be the first fully digital, NFT-based artwork ever sold by a major auction house. Beeple artwork is going to be auctioned at arguably the most prestigious auction house in the world, Christie’s.