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Blockchain technology and cryptocurrencies generated a lot of hype worldwide and had found unlikely support from famous businesses, celebrities, entrepreneurs, and even governments. So, today we are looking at a much different crypto market than the one before the latest bull cycle in 2021.
Thanks to the incredible innovative blockchain design, there are many new blockchain-based solutions available on the market and new cryptocurrencies. In fact, there are over new 6,000 virtual currencies on the market.
Also, NFTs is a tech innovation developed initially in 2015 on Ethereum’s blockchain network, but in recent years it’s been one of the fastest-growing trends on the market. If you’re wondering what NFTs are and why they are gaining traction, here we will take a look at NFTs and their main advantages.
What you'll learn 👉
Defining NFTs
First, you should be able to distinguish between NFTs and cryptocurrencies. NFTs are developed as non-fungible assets, which means each NFT is unique, it isn’t interchangeable and cannot be replaced with another asset. Whereas, when we are looking at cryptocurrencies and even fiat currencies, they are fungible assets, in the sense if you own 5 BTC and change them for 5 BTC, you replace them with the currency of the same kind, you will end up with the same digital assets. But that is not the case with NFTs.
Every NFT that has ever been created is a totally unique digital asset. The first NFT token was created by Nick Johnson – ERC721 – and displayed digital proof that the users possess assets on Ethereum’s blockchain. Otherwise, most NFTs today are built on Ethereum’s blockchain technology, but there are other networks.
NFT Marketplaces
Another reason why NFTs are popular is that there is a rising number of NFT marketplaces where you can easily obtain NFT as long as you have a good crypto wallet. Actually, most reputable NFT marketplaces make sure the process of bidding, obtaining or selling NFT is simplified for every user. But, if you’re a complete beginner and you feel overwhelmed, we recommend this guide to buying NFTs that offers in-depth information on NFTs and the buying process.
Types of NFT
Thanks to the adaptable nature of the blockchain network, you will find many different types of NFTs. However, we will mention the most popular ones below, although we expect in the future for NFTs to be used in an array of different industries, including the real estate industry, finance, and other sectors.
Collectable art is the most popular type of NFT, from profile pictures, generative art, stickers to proper art pieces. It proves the sole ownership of the user over certain art pieces, and it is a way to promote innovations in the fine art collection market because it directly connects artists with fans, for example.
In addition, you can also purchase collectable cards like Pokémon cards, stickers, baseball cards, and other types of cards. As you can tell, you can also find video games, music and sounds as NFTs.
Besides, there are even experiments within the NFT marketplace to market articles like the New York Times article, which was sold for over $500,000 and even videos which you can also find for free on platforms like YouTube. The main point is you can conveniently purchase and own a fraction of certain NFT art pieces or the entire artwork on an NFT marketplace.
Most Valuable NFT
The value of NFTs is completely dependent on the market demand, and as we talk mostly about unique art pieces, obviously, some have achieved more success than others. Below, we will list some of the most valuable NFTs that were sold during 2020 and 2022.
For $5.4 million via Sotheby’s was sold the original source code of the World Wide Web. Crossroad is an animated NFT created by the artist Beeple in 2021, featuring former president Donald Trump. The NFT was sold for $6.6 million. Moreover, CryptoPunk #780 was sold for over $7 million.
Final Thoughts
To sum up, the NFTs marketplace shows a lot of potentials, and it’s gaining traction because you can easily sell and buy digital artwork, but also because they are adaptable to other industries that will benefit from the implementation of NFTs as a proof of ownership. That said, make sure to take the time to review your own financial goals , do your research and identify the NFTs you want to buy before you make an investment.
