Why Are NFTs So Popular Right Now? (Plus 6 of the Most Popular NFTs)
The Ethereum blockchain gave birth to NFT by introducing a set of token standards enabling developers to create digital tokens.
NFTs are cryptographic assets that can include digital art, amongst other things, stored on a blockchain network that shows the ownership, authenticity, and provenance of something such as artwork, or real estate, for example. The term "non-fungible token" refers to the fact that the token is one-of-a-kind and cannot be duplicated or exchanged for anything else.
It is important to note that when someone purchases an NFT artwork that has been authenticated, they are not buying the digital asset in its entirety. Instead, they're buying a digitally authenticated note that declares they hold the NFT ownership. Anyone can download a copy of the file or link corresponding to whatever the NFT is tokenising, but only the NFT space owner has the contract that specifies their ownership rights.
Why Were NFTs Introduced in the First Place?
NFT collectables have exploded in popularity because they provide an alternative model for people to own valuable digital content.
They've got a means of proving ownership of a digital object that could otherwise be easily replicated. Unlike an old painting or sculpture, digital artwork is incredibly simple to duplicate - all it takes is a simple download. NFTs show authenticity, in the same way, the blockchain guarantees that a single bitcoin or portion thereof belongs to only one person.
Unlike physical artworks, which can be broken, lost, or destroyed, NFTs cannot be destroyed because they are recorded on a blockchain, an immutable record of transactions. The majority of NFTs use the Ethereum blockchain, but there are others.
NFTs Provide a Different Way to Own Items
Built-in royalties are enabled by the NFT technology, this benefits the artists resulting in a far more financially rewarding market than most creators are accustomed to.
NFTs provide an alternative model, allowing people to own digital content that is valuable to them independently of leading media platforms' whims and interests. NFTs can be shared and used across multiple platforms, and they remain the owner's property until they are sold. For example, if you're a basketball fan, you can buy an NFT of the best shots from 2021 that will be yours forever and can be used on any platform you want, with no restrictions.
NFT transactions use blockchain authentication to prove ownership - a digital "original". Blockchain enables you to quickly determine whether an NFT you're looking at is genuine. Owning an NFT, like other "originals," can be a status symbol for collectors. But it's not just about bragging rights on the internet. Collectors of NFTs, like those of other more tangible art forms, have a wide range of motivations. Some people may adore the piece and want to own it, while others may see it as a way to gain status or make money.
Owning an NFT provides the same sense of permanence and ownership as physical items, but for digital assets.
What Is It About NFTs That Makes Them So Popular?
NFTs are useful for more than just tokenising assets. For example, in the case of "Every day," the NFT gives the token's creator a cut of future sales, with Beeple receiving 10%. This can assist artists in securing a steady stream of income - and, more importantly, a portion of future resale value.
The Ethereum network is where the majority of NFTs are created so far. The ownership of NFTs can be traced and verified, but the token's owner can remain pseudonymous.
NFTs have one owner at a time. To manage ownership, each token has a unique ID and metadata no other token can duplicate. They’re created using smart contracts that assign ownership and manage the transferability of NFTs. The blockchain, where the NFT is managed, stores this data. At a high level, the minting process entails adding a new block to the blockchain, validating information, and recording it.
As a result, tokenised art comes with a one-of-a-kind digital certificate of ownership that can be sold or purchased online. It is transparent and cannot be copied or stolen because it is stored in blockchain.
NFTs That Were the Most Popular in 2021–2022 (So Far)
In the last year, there have been several blockbuster NFTs. Beeple was the most popular artist, but TRG Datacenters used Google Trends data and social media to look at some of the other most googled NFT art pieces between January and September 2021.
Twitter co-founder, Jack Dorsey's first tweet was the most popular NFT by search. Hash marks, a collection of over 16,000 unique digital assets created in collaboration with 70 artists worldwide, was the second. According to the industry website The Block Crypto, the project "sold its collection of 16,384 NFTs for $16 million in less than a week, with the most expensive Hashmask selling for 420 ETH ($650,000)."
just setting up my twttr
— jack⚡️ (@jack) March 21, 2006
The iconic DOGE meme, which features the now-famous Shiba Inu Japanese dog breed, which sold for $4 million in June this year, was the third most popular NFT by search volume. "The NFT is now valued at $220 million after being fractionalized into 17 billion pieces - split up to allow for community ownership," Business Insider reported in September.
6 of the Most Popular NFTs
- The Bored Ape Yacht Club is the most well-known NFT collection (BAYC). YouTuber Logan Paul has invested in BAYC. Eminem, the American rapper, is the most recent celebrity to jump on board, owning a piece of digital art that looks like him. He also uses it as his profile picture on Twitter. On the Ethereum blockchain, the Bored Ape Yacht Club is a popular series of NFT profile images. They retail for tens of thousands of dollars, and a rising number of high-profile celebrities are buying them.
- The game Axie Infinity is a top NFT project to keep an eye on in 2022. It's a blockchain game where you can earn money by playing. The metaverse game was first released in May 2018 and has grown in popularity significantly over the past year.
- Cool Cats is another NFT collection that has been making headlines, and it is based on the Ethereum blockchain. It was released in June 2021 and featured 9,999 unique characters based on a blue cat animation. The combination of varying facial expressions, traits, and attires, however, is what distinguishes each of these characters.
- The Mutant Ape Yacht Club (MAYC) is a separate project from the BAYC that features a unique collection of apes. MAYC debuted in August of 2021. The collection included 10,000 Mutant Apes, which sold for USD 96 million on the spot. It was an expensive NFT.
- Larva Labs created Meebits in May 2021. Meebits is a pixelated 3D avatar that we can use in the virtual world, and it has a similar vibe to CryptoPunks. There are 20,000 unique characters in the NFT collection that can be rendered. Depending on the rarity of the characters, their prices can reach hundreds of ETHs. An NFT, on the other hand, costs around $14,700 on average.
- Decentraland is one of the newest projects among NFTs, launched in July 2020. Decentraland, which sits atop the Ethereum blockchain, allows users to enter a virtual reality world to buy land, build homes, and create avatars. Not only that, but owners can also trade their digital collectables.
Is the Future of NFTs Going to Boom or Bust?
There is no shortage of enthusiasm for NFTs. A number of cryptocurrency exchanges are interested in participating. The NFT market is expected to surpass the size of Coinbase's cryptocurrency business, which recently reported third-quarter revenue of about $1.3 billion, according to the exchange’s CEO Brian Armstrong.
Coinbase announced its entrance to the NFT market by launching its own NFT marketplace on October 12, 2021, and has sparked high interest among the community since then, as the platform's backing from the largest exchange in the United States would put it in direct competition with other titans like OpenSea, Rarible, NBA Top Shot Marketplace, Binance NFT, and Crypto.com, among others.
NFTs may be trending in town right now, but they still have a long way to go before becoming widely accepted and truly mainstream, as with any new technology.
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The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.
Last updated: 29/03/2022