The NFT market is rising fast. The highest-ever sale price for an NFT was over USD 90 million for a piece called Merge, which changes according to the ownership patterns of its buyers. And there are plenty of others that have now sold for over USD 1 million. As per a report by NonFungible.com, which provides market data and analysis on NFTs, global volumes in the market were to the tune of USD 56 million in 2021. There were some 2.5 million active wallets during the year and the company estimates that USD 5.4 billion of profits were generated as well.
The key driving force behind NFTs’ growth is blockchain technology. It allows for their unique identification and creates an ecosystem of transparent and secure transactions. The market is also maturing fast. While most NFTs still require to be paid for in cryptocurrencies, the question of how to buy an NFT with actual currencies is also being addressed. Some marketplaces now allow for trading in US dollars as well. The fact that NFTs are not restricted to just art, arguably the most popular type around, adds to their appeal. NFTs can be found among collectibles to real estate. Here are some of the key ones.
Works of art
Art NFTs as the name suggests, refers to digitally created art. These can be 2D and 3D art, animations or videos, among others. There is a sub-category of Generative Art within these NFTs, which is produced by a computer or algorithm. Some of these works are also created by actual robots! Another kind of Art NFT is One-of-One Artwork. Creators can create multiple versions of the same NFT, which are different only in their token IDs. So they can appear the same but are actually unique.
Collectible NFTs are quite similar to physical collectibles like trading cards. They were also the first NFTs that helped the growth of the market, like CryptoKitties and CryptoPunks. They can be used as avatars for profile pictures on social media, giving the user a unique way of presenting themselves. While Crypto Punks were the first such NFTs, it is Bored Ape Yacht Club that has proven to be the most popular to date.
Gaming with NFTs
Collectibles in the form of trading cards for sports stars has been around for a long time. They have now gone digital. Sports collectibles’ NFTs are estimated to have a valuation of USD 1.4 billion today. Additionally, video games related items like weapons and skins are also popular with NFT buyers. In fact, gaming and NFTs have become so integrated, that some games actually require the purchase of an NFT to start playing it.
Music NFTs give artists creative control over their pieces of work, while potentially earning money. Some platforms even allow fans to invest in this music, which can be a win-win for both the artist and the buyer. By investing in music NFTs, there is sometimes the option of earning royalties on the music’s usage. Besides that, it also earns bragging rights in case an artist a buyer invests in also becomes famous later on.
Events and Memberships
Event tickets can have identification numbers as can club memberships. So it is only intuitive that the process can be simplified with NFTs. This helps in maintaining a record of these and also allows for verification of holders. These NFTs have the advantage of unlocking other services and rewards too. For example, the Bored Ape Yacht Club gives access to exclusive events.
Domain Name NFTs
Providing ownership of internet domain names, they are a convenient option in that they use blockchain to ensure authenticity. They have been prominent NFTs for a long time, and over the years have become a simple way to purchase these names.
Most popular NFTs
While NFT demand depends on both the creator’s fame and the uniqueness of the creation itself, there are clearly identifiable trends in the market. Artworks and avatars are the most sought after among them. Some of the most valued NFTs are digital artworks fetching millions of dollars for creators like Pak and Beeple. The anonymous Pak’s artwork Merge, which has three circular masses against a black background, is the most highly priced, selling at over USD 90 million. Beeple’s Everydays project, which is a collection of digital art created every day for 5,000 days is another one that fetched a fantastic sum of USD 69 million. Avatars like CryptoPunks have also made millions for their owners.
It is clear that the NFT market has come a long way. But it can go much further, in fact, it already is. With a huge growth in transactions in the past years and the vast choice of NFTs available, it is a market to at least watch, if not get into straight away.