The Non Fungible token (NFT) is the newest buzzing part of the Ethereum blockchain, each one being a unique digital asset that is not interchangeable and cannot be substituted. The term non fungible means that this technology is unique and is not replaceable with something else. These newly found digital assets are blowing up at the moment, generating a lot of enthusiasm from investors, buyers, sellers, and everyone interested in the digital world.
The technology applies to a wide range of asset types. It can be anything digital like art, music, gaming, GIFS, videos, and more. They can be bought, sold just like any form of art as the current market primarily determines their value. The online space is expanding; people are investing so much into new technologies. NFTs are going mainstream with their blockchain security and convenience. The field is constantly growing, and sectors in the entertainment industry show a contagious amount of enthusiasm.
What is the notable advancement of the NFTs in the crypto world?
The hottest market currently getting a ton of buzz is the digital art market. Artists are beginning to make a whole lot of money by auctioning their art on the money market. Just recently, Mike Winkelmann, popularly known as “beeple,” recently sold his digital artwork, “Everydays- The first 5000 days,” for $69 million through auction.
The growth of crypto art has been one of the most exciting trends of 2020 and doesn’t seem like it would slow down in 2021. NFT marketplaces have bloomed on the Ethereum network, causing a ripple of diverted attention from other crypto space.
The non-fungibility of this asset distinguishes it from a lot of other cryptocurrencies. For example, your bitcoin will always be worth an equal amount of bitcoin, but an NFT is a unique digital asset. It is impossible to get a similar replacement of the item you purchased, giving you complete ownership of such an investment. It can only be sold to get an entirely different asset. NFTs would cost an additional amount at other times, and values could increase, or vice versa.
It is inarguable that the NFT opens a door for a creative medium that has never existed before, making it possible for people to collect digital art and not in a physical medium. Artists get to share their work while getting compensated for it. However, questions are rising, and the world is watching. Can we honestly say that this tremendous buzz is good for the crypto environment?
Although many other projects are making waves in the world of crypto, the NFTs are becoming a more significant part of everything. A lot of people are investing so much into these digital assets. This technology enamors millennials and the younger generation, and much attention is being diverted to this supposed fraction of crypto. As this buzz becomes a wave that cannot be stopped, can we say an imminent crash is looming in the crypto space?
NFTs and the blockchain environment
The blockchain environment is a network of diverse databases—a collection of information stored electronically on computer systems. Different types of information are usually held on the blockchain and can also be used as a ledger.
The NFT, being a digital asset, is often stamped with a bit of a unique code used as a viable record of its authenticity before being stored on the blockchain. Its technology is primarily based on the Ethereum network.
The NFTs have become a unique fraction of the bitcoin technology, being the way to introduce physical assets into the crypto world. Having the potential to represent real-world properties, qualifications, valuable individual assets, they allow these assets to be stored, shared, bought, and auctioned on our devices. The whole system seems to be transforming, and the other fractions of the bitcoin technology get reduced to a hum compared to the NFT bubble. Although the NFT is still in its infancy stage, it poses a threat to the other projects on the blockchain network.
One cannot browse the internet without coming across a new gist about NFTs; this space jas captured the attention of artists, gamers, sports enthusiasts, speculators, and investors. It’s a hot topic that seems promising, and a lot of people are inclined to think that this technology would grow bigger and better. At the same time, it sidelines the volatile aspects of blockchain technology, such as cryptocurrencies like Bitcoin and many others.
Would NFTs crash the market?
Indeed, the NFTs have become a massive part of the crypto space, but comparatively, it is still a fraction of a more significant amount of projects that exist in this space. The crypto boom is driven by a whole lot of technological advancements that are currently unmatched. If the buzz about NFTs reduces and the NFTs crash, it definitely won’t take crypto down because NFTs are more like a separate region in the crypto world. There is indeed a connection, but the crypto technology’s autonomic nature is an added advantage here.
NFTs are great, but some arguable facts exist, backing up the truth that they do not have the leverage to crash cryptocurrencies. Let us say a few things about those facts:
- NFTs are a fraction of the crypto market
The cryptocurrency market has been in existence way before the NFTs were introduced, with a remarkable performance in all sectors. The first decentralized cryptocurrency, “bitcoin,” which was released in 2009 by Satoshi Nakamoto, has made tremendous success in the years past, promising to be more successful alongside other crypto inventions in years to come. The global cryptocurrency market stood at $754 million in 2019 and is projected to reach $1758 million by 2027. With various technological advancements, a virtual currency exchange has increased in the past years.
The world’s cryptocurrency is now worth more than 1trillion dollars, with bitcoin accounting for a large majority of this value, alongside many other cryptocurrencies making waves in the crypto market.
So what am I trying to say with all these data? NFTs only account for a small percentage of the cryptocurrency market; it is highly unreasonable to assume that this lesser fraction could be the end of cryptocurrency.
- Some serious longevity backs the cryptocurrency market:
Occasionally, we come across news about investors and asset holders in the crypto world, Partnerships, and projects that keep them afloat. We can all agree that these are the significant factors that keep a business going. Daily, more innovations spring up, and the enthusiasm from investors and partners keeps soaring. These factors have brought about a competitive advantage to the market, increasing expertise, resources available and making things better for the crypto audience.
As meager as it might seem, this is a significant factor that backs up the cryptocurrency market. Many have invested so much with the assurance that space will keep evolving. Although the NFT is currently a hot topic shaking up the cryptocurrency world, many partnerships have nothing to do with the NFTs. The NFTs remain in their own space and cannot crash the cryptocurrency market.
- Let’s not forget the autonomic nature of cryptocurrencies.
Cryptocurrencies being the first actual-world implementation of decentralized authority, offers a whole new paradigm of self-sufficiency. All projects that exist in this space have a sovereign power of independence. The bitcoin, Etherium, and other cryptos run independently. NFTs and the DeFI world work similarly in several exciting ways.
The NFTs function principally on the Ethereum blockchain as a digital asset in the blockchain space; it also exhibits notable features in this field. The decentralized structure gives direct control to users in a transparent environment. The NFTs are relatively self-contained. Given the fact that the crypto space’s fractions can exist independently, they cannot be brought down by them.
The concept of this technology is indeed fascinating. NFTs such as domain names, virtual world, art marketplace, crypto art museums, gaming, and many others are booming. Virtual real estate is thriving; people purchase celebrity art, trading cards, and digital assets as investments. There are many different avenues for brands to scour the NFT technology, causing a lot of positivity to the field. However, critics ask if they are worth the values assigned to them, especially if all it takes to view them is only internet access. This technology is highly unique, having the non fungible feature, unlike all other cryptocurrencies.
The NFT market is majorly on Ethereum and the primary market getting a lot of attention is the digital art market. The technology seems crazy and will most likely be around for an extended period, but I’m not convinced that it could crash the market.
People are investing millions in the market, the technology isn’t a work of art in itself but an authentic certification ingrained on the blockchain, providing proof of authenticity. The technology is fascinating in diverse ways, but It is self-contained with its consumers in its world of art and collectibles and, therefore, does not pose a real threat to the world of cryptocurrency. So, let us enjoy the buzz and remain optimistic about the exciting developments that keep arising in this space.