NFT, you haven’t heard the last of it ! In recent months, NFTs have been stirring up the web and are leading a revolution around the world. This third quarter of 2021, 6 billion dollars have been traded on the Ethereum blockchain alone ! Far from being a simple buzz or a small speculative bubble, these virtual tokens are no longer the business of just a few geeks. From now on, investors, collectors and even novices are jumping on board ! Everyone is fighting for them and paying top dollar!
What is an NFT?
In concrete terms, an NFT is a digital token that represents a unique and unforgeable asset. It can be a video, an image, a GIF, a piece of music, a work of art, a figurine, a tweet and many other things. These digital contents are matched with a certificate of authenticity equivalent to a digital property deed and are then listed in a blockchain. NFTs are generated on digital platforms and acquired using cryptocurrencies. They may be endlessly traded, resold and have their value evolve over time.
What’s its usefulness?
While many wonder what’s the point in paying so much money to own something that is available to everyone, freely, on the internet… Well, when you’re buying digital content in NFTs, you acquire data proving that you are its sole owner. In some cases, NFTs give you access to the exclusive content of a clip, for example, which viewing would only be reserved to buyers having acquired one of the 20,000 tokens put on sale for its discovery. Here, the principle of rarity linked to the NFT, increases the popularity of the virtual works and thus becomes a unique investment opportunity, since it is possible to resell it on a second market and thus make a profit. Another usefulness of the NFT is that an artist who wishes to sell his work in NFT will be rewarded with royalties (commissions) at each subsequent resale, and this, for his entire life.
An explosion of the market in just a few months.
While the NFT first appeared in 2017 with the phenomenal success of crypto-kitties and crypto-punk, extremely popular digital avatars that generated millions of dollars in transactions, it is truly at the beginning of 2021 that NFTs became known by the general public, via the digital art world. It was during Christie’s historical sale, in February, of artist Beeple’s digital work Everydays, the First 5000 days, which sold for $69 million. Since then, not a day goes by without the NFT making top news.In view of its success, several other sectors are interested in them, such as video games, music, sports, the luxury industry or even real estate.
A new era for the virtual real estate world.
It is now possible to build your dream house and own a virtual property. Buying and selling plots of land, buildings, houses in the form of NFT, that is the concept offered by the metaverses, these fictitious virtual worlds, based on blockchain, which act as notary in these digital universes and where users can not only buy land, but also visit buildings, walk around and meet people in the form of avatars. Metaverses are thus becoming real living spaces but also a field of opportunity for communication and marketing. These 3D worlds are an Eldorado for advertisers and brands who see it as new opportunities to boost their image by highlighting their products and services in this virtual world, in order to trigger consumer behaviour in the real world.
The metaverse, a flourishing market.
Virtual real estate in the metaverse is the new big winner in the multi-million dollar NFT world. On November 23, Decentraland metaverse announced the biggest ever virtual land sale, of a 565 square meter virtual lot, for a record breaking $2.4 million paid in cryptocurrency. Located in what is listed by Decentraland as the “fashion district” in this parallel world, the buyer Token.com, an investors company, said that the parcel, which acts as a virtual shopping mall, could host fashion shows by famous brands and foster commerce within the burgeoning digital fashion industry. An investment that will allow them to generate significant revenue when renting their land for such events.
As of today, NFT sales have reached an amount comparable to the turnover of a company like Chanel. At the end of October 2021, NFT sales amounted to more than $9.2 billion compared to $162 million at the beginning of the year, a spectacular increase of more than 5,000% with a number of works sold increasing by 98% from 5.1 million to 10.1 million during this period. More and more users are opening their wallet to acquire NFTs in crypto-currencies and are all the more present to resell them.
NFTs generate fascination, lack of understanding and curiosity, but whatever the case, the NFT trend is still booming ! October’s Google trend data show that 81% of Google searches are for the term NFT. As you will have realized, the NFT market is generalizing, opening up to more and more sectors, and attracting an increasingly diverse audience. Its potential is growing at an exponential rate and the opportunities are limitless.