The last decade has seen many different modes of unconventional digital assets and currencies entering the financial world. With virtually all miners and investors benefiting from decentralized digital currencies like bitcoin, there is a new player who has changed the digital asset industry. Non-fungible tokens (NFTs) have gained popularity over the last year. The volume of NFTs traded on the market has increased by 43% from April 2021 to June 2021. This exceptional growth can mainly be attributed to their distinctive character. Since then, NFTs have grown at a rapid rate. According to Reuters, the share of NFT sales during the first 6 months of 2021 grew to $ 2.5 billion.
Most of the available NFTs are created and stored on the Ethereum network. In addition to this network, NFTs are compatible with other blockchains such as Tezos and Flow. The ownership of the NFTs can be easily traced and verified, while the owner of the token can remain a pseudonym. Different types of digital assets or goods can be tokenized, such as artwork, videos from a live stream, or items from a game. The file size of the digital item does not matter when adding the item to the blockchain.
Depending on the NFT, license fees and copyrights may not be included when purchasing the digital asset. This can be synonymous with how buying an exclusive artwork or a limited edition does not give you exclusive rights to it. NFTs can have many other potential applications in consideration with advances in concepts and underlying technology. Globally, there is a well-established potential of blockchain by value engagements. Currently, business strategy assessments are used to commission about 70% of enterprise blockchain initiatives. According to NASSCOM, the Indian public sector has supported and driven blockchain-based projects involving more than half of the country’s states. Blockchain applications are being identified by businesses across a wide range of industries. Although only 8% of these are in production, the majority are expected to expand this year.
Investors who invest in NFT are exposed to a variety of options. Different types of digital objects such as videos, music, images, texts, tweets, and others can be converted into NFT. The highest-profile sales have been accounted for by digital art pieces. NFTs can also have land parcels in different virtual world environments. Some of the featured NFT entries are collectibles, games, event tickets, music, media, virtual items, memes, real-world assets, domain names.