We are in the modern era, and we know that the virtual economy is on the rise. From cryptocurrencies to any type of digital transaction, many people believe that such an industry will dominate global finance. One of them is Andrew Steinwold, a partner in the digital asset hedge fund company Polynexus Capital. Steinwold estimates that the sale of non-expendable tokens (NFT) this year reaches $ 100 million, and ensures that sales will continue to grow.
To understand the reason for this event we must first know the most fundamental: what is an NFT token?
What is a non-fungible token (NFT)?
Non-expendable tokens (NFTs) are a type of token on the Ethereum Blockchain that represent a single asset. These can be fully digital assets (virtual clothing, collectibles, weapons for video games, etc.) or tokenized versions of real assets. What does it mean that they are “non-expendable”? They are not interchangeable with each other.
Fungibility occurs when the individual units of an asset are interchangeable and indistinguishable from each other. For example, fiat coins are expendable. A twenty dollar bill is exchangeable for any other twenty dollar bill that is authentic.
An NFT is the exact opposite, each unit for sale contains a completely unique identifier, which is what makes each non-expendable token different from the others. This feature makes NFTs ideal for storing ownership of virtual items.
Its sale has increased significantly
In his latest article on Bankless, Andrew Steinwold interprets the rapid growth in popularity of NFTs as a sign of what’s to come. It also indicates that total Blockchain-based NFT token sales have exceeded $ 100 million for the first time since its appearance in 2017.
Steinwold believes that “we are in a market that could one day be worth trillions of dollars“Despite the fact that such tokens were once considered mere trivial toys.
According to him, collectibles on Blockchain represent the majority of NFTs sold between 2017 and 2020, with more than $ 37 million invested.
“Collectibles” are defined as any symbolic asset with little or no functionality, such as rare coins, autographed souvenirs, and rare books. Some projects that include them are CryptoKitties (who popularized such tokens for the first time), CryptoPunks and Avastars.
It should be noted that he is not the only one who highlights the growing potential of NFT tokens and their sale. A recent report by L’Atelier, part of the BNP Paribas group, identifies a US $ 100 billion “virtual economy” backed by the NFTs and virtual worlds, a factor they consider key to a transfer of generational wealth in the coming years.
In what other media do NFTs exist?
In addition, Steinwold delves into other media in which non-expendable tokens are present, such as virtual reality worlds and digital works of art “crypto art”:
“In virtual reality worlds, a user could create a virtual house, a crypto art gallery, an e-commerce store, mini-games (if you know how to program), and more. The options are unlimited (…) In total, an approximate of $ 27.5 million was spent on NFTs used in Blockchain-based virtual worlds“
Featured examples include Cryptovoxels and Decentraland, where a user paid more than $ 80,000 for a virtual parcel.
And although the crypto art Representing only $ 1.7 million in total sales, Steinwold believes that digital artwork at NFT represents a financial advantage for artists:
“The internet democratized the media by allowing artists to gain their own online following… But galleries still controlled the financial rails (…) Now, artists can finally control their finances because they are selling their work in a global and irrepressible financial system“
Furthermore, he believes that NFT-based property titles will also revolutionize the real estate market in the coming years. An important statement taking into account the size of this market.
And you, do you think that the use of non-expendable tokens (NFT) will continue to increase? Do you think they have real utility? Let us know your opinion in the comment box.