While the cryptocurrency buzz is still unsettling, NFTs are acquiring a fast pace in the virtual ecosystem
Since Bitcoins inception in 2009, blockchain technology has evolved above and beyond. In 2022, it has reached far more than what people originally expected. Blockchain technology houses any form of digital assets and keeps them safe in an encrypted key. It has the potential to give value to everything like fiat currencies and artworks in the digital world. For example, fiat currencies are converted to stablecoins like Tether and USD Coin while artworks are called NFTs (Non-Fungible Tokens). While the cryptocurrency buzz is still unsettling, NFTs are acquiring a fast pace in the virtual ecosystem.
Cryptocurrencies have been stealing the stage for three straight years now. Since the Covid-19 lockdown was imposed and people started trying their hands on virtual tokens, cryptocurrencies became extremely popular. More than the popularity, they gained prominence and made many people rich over the years. However, 2022 doesnt seem to be the year for cryptocurrency. Since the beginning, even major digital assets like Bitcoin and Etheruem are experiencing a bullish trend. On the other hand, NFTs are taking the center stage. According to a report by DappRadar, consumers spend about US$100 million on NFTs in 2020. But it has drastically risen to US$22 billion, which is a 21,9100% growth in just a year. Today, interested people are buying Non-Fungible Tokens on digital platforms like OpenSea, Rarible, etc.
Both Cryptocurrency and NFTs are lucrative investments. If you think digital tokens are extremely volatile, then Non-Fungible Tokens is not your thing. Although NFTs and cryptocurrencies share the same baseline called blockchain technology, they are different in nature and carry diverse features and values. But the recent trending topic is NFTs. Big Non-Fungible Token sales like Jack Dorsey, CEO of Twitters Tweet, for US$2.9 million and Beeples artwork for US$69 million is making headlines everywhere. When NFTs are gaining prominence like never before, lets explore the possibilities of these digital artworks during the cryptocurrency market upside down.
Non-Fungible Tokens represent anything that is unique like furniture, artwork, jewelry, etc. NFTs basically represents a unique object or an artwork that can be sold online. They are different from cryptocurrencies because they are not interchangeable, but fungible. However, similar to virtual tokens, they can be traded via a blockchain network and all the transactions and movement of NFTs are closely kept in context.
When a product is brought into the NFT world, it gets private ownership and tradeability. When somebody buys the Non-Fungible Token, the ownership of the product moves, which is the private key, is given to the other person. One thing that makes NFTs unique is their ability to promote the originality of the product. You can sell the same artwork on social media or any physical medium, but there are chances it might get copied by others. However, on NFTs, the owner of the artwork remains at the help and the works cant be copied. It gives owners an option to brag about the uniqueness they possess. Since there is only one original work on NFTs, its value also increases based on the demand and interest.
Recently, people are using a new method called scholarships to rent the Non-Fungible Tokens to make money. These are basically virtual tools, creatures, or skins for games that are much required to participate. They lend them to players and collect rent.
Cryptocurrencies are increasingly used in everyday life. Over the past couple of years, people are using digital tokens as money that can help them make transactions on a daily basis. On the other hand, even well-known brands are coming forward to accept cryptocurrency payments. However, NFTs are not this lucrative. They are unique so they cant be traded very often. Most importantly, NFTs cant be traded for each other like cryptocurrencies. Both cryptocurrency and NFTs are accessible through a digital ledger that makes transactions and ownership shifts transparent.
As mentioned earlier, an NFT cant be traded for another while we can do the same with a cryptocurrency. Yes, we can trade a Bitcoin to buy Bitcoin as they carry the same value. But we cant do the same with NFTs as the value differs.
Bitcoin marks the most remarkable success of blockchain technology implementation. Yes, BTC has emerged as the first cryptocurrency in 2009, paving the way for more digital assets to come. Today, nearly 80 million people are investing in Bitcoin and most of them are using it as a store of value or an option to trade. BTC is the best option for people who wants to avoid government regulations and tax issues. NFT is a branch of blockchain technology that puts collectibles on the network so they can be easily traded.
In 2022, Bitcoin still seems to be the winner even after losing value for three consecutive months. Although NFTs have some solid features and advancements, they are similar to altcoins. More than being a store of value, NFTs are emerging to be speculative. On the other hand, Bitcoin has actually helped many people become millionaires over the years.
According to the New York Times, Non-Fungible Tokens have been around since the mid-2010s. It is just that they gained popularity recently. The recent buzz around NFTs is solely created because of the Covid-19 pandemic and the digital evolution. Just like how we cant predict what will happen in the cryptocurrency sphere, the NFT world also remains behind the shadow. But one thing for sure is that it wont go away any time soon.
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Will NFTs Step Over the Cryptocurrency Buzz in 2022 and Beyond? - Analytics Insight