In one of my previous post I gave my vision of what the future of NFTs might look like so I decided to see what the NFTs look like today.
With volumes traded and collections reaching millionaire levels, NFTs remain on the investor's radar even with the shocks of the recent troubled context that befell global markets, arousing the curiosity of investors, from the most experienced to new market entrants. But what is this technology, what is behind the value of NFTs, where to buy them and what to expect for the future of the segment?
Today we're going to start with the basics to teach you who still don't know what NFTs are.
NFT is the acronym that designates a non-fungible token, or in Portuguese, a non-fungible token. And it basically consists of a digital item created from blockchain technology, just like cryptocurrencies, and which has a unique identity for each version of itself.
But if they are based on the same technology, what makes an NFT different from a cryptocurrency? The characteristic of non-fungibility or substitution. Unlike cryptocurrencies, this type of token cannot be replaced by another token even if it is similar or even identical, as the "fingerprints" of each of the assets are unique.
That is, each NFT has its authenticity guaranteed, each one is unique. Even if an item has 10 copies, each of them is unique in itself because it has its own digital identity. Thus, whoever owns an NFT owns a unique digital asset, which no other person has.
The non-fungible character is what assures the value of the NFTs proposal by making them scarce by nature.
To illustrate more clearly, imagine a famous classic painting. The Scream, by Van Gogh, whose original painted work is physically in a museum.
Its fame opens the way for posters or identical virtual copies of the painting to be spread and owned by diverse people, admirers and fans around the world, correct? But despite the similarity, none of these copies will come close to the value of the original painting. The same is true of an NFT. The guarantee of authenticity now re-signified and with a new universe of everyday applicability.
Attesting to the originality of a work, commercializing music in a fragmented way, game items, design projects, among others, the uses of blockchain technology have opened new horizons, are creating communities and also the foundations for the future of WEB 3.
NFTs have been transforming the art, music, consumer, sports, fashion and many other industries, showing a new sea of possibilities for exploring digital interaction.
They began to gain notoriety as artistic items, capable of disseminating new trends and serving as an extra usability element for cryptocurrencies, which function as a means of payment by NFTs. The relevance of the segment makes the artistic NFTs the most famous and the main aspect of this segment until today.
However, with the evolution of the sector, utility, metaverse, music and games NFTs - with items like skins or tools within the platforms - and those called collectibles have gained more and more enthusiasts. In the gaming sector, NFTs provide new possibilities for exclusivity and differentiation in an environment that values these aspects as advantages among players, bringing to the fore a crucial aspect of NFTs, the exclusivity status that generates the idea of superiority of those who hold a certain non-fungible token.
Even with some technical challenges that still exist, the community continues to improve the dissemination of NFTs in the games industry. Today, for example, in addition to items purchased in games such as skins and tools, we already have several blockchain games that also incorporate NFTs as rewards for player performance, such as Axie Infinity, Farmers World and The Sandbox Game.
Billion-dollar industry, in the second quarter of 2022 alone the NFTs market moved more than US$12 billion, according to data from The Block Research.
With non-fungible tokens revolutionizing the way we think about art, projects like CryptoPunk and Bored Ape Yacht Club have managed to build a sense of status and belonging that not only builds loyal users, but attracts more and more enthusiasts and generates value.
And, although the recent crisis spread across the crypto market has affected the NFT industry in terms of market cap reduction, projections are still optimistic about the post-market recovery and investor interest trend, such as Markets and Markets research shows that Global NFT market trends are positive with scope for growth of 35% in the coming years.
When we think of NFT among the most diverse segments, there is always an artist, a designer behind it.
The main artists of today, the most recognized for their traits and proposals, are also the most successful in terms of capitalization. Most of the time these artists have mysterious identities, like Pak, the artistic identity behind the creator of the most expensive NFT in history, The Merge, which sold for $91.8 million. Pak has more than US$300 million in total sales and ranks as the leading artist on the NFT market in terms of total value received for his tokens, alongside the famous Beeple, creator of the piece “Everydays — The First 5000 Days”, sold for US$69. millions.
Third country in world adoption of NFTs, behind the United States and the Philippines, Brazil has a group of very talented artists with different proposals, but who conquer more and more admirers day after day.
As a highlight, we bring here four great names:
On OpenSea's online platform, the collections with the highest historical volume transacted are those of the Bored Ape Yacht Club, with greater usability in view of the strength of the community that has developed around the brand, with even physical spaces in the real world being allocated to holders of BAYC tokens.
The artistic segment remains the most expressive of the NFTs market, from the number of existing collections to negotiated values, and this is due to the success that some collections have had in creating a community status around the tokens.
A collection of NFTs launched in 2017 by Larva Labs, CryptoPunk, inspired by the cyberpunk movement and electronic music artists such as Daft Punk, takes the place of the largest collection on the market by volume, with 6 NFTs occupying positions among the 10 most expensive ever sold. in the world.
Called CryptoPunks tokens, the most expensive ever sold to date is the "CryptoPunk 7523", which sold for $11.8 million.
In terms of trading, it is observed that the segment has managed to maintain its market parameters. Even after the first wave of devaluation that hit the entire crypto market in the first quarter of the year, the main collections of NFTs are managing to hold steady.
Even with the evolution of the market, buying an NFT is still not the simplest thing in the world. You need a digital cryptocurrency wallet, wallet balance, access a specialized marketplace and browse there to find the perfect NFT out of thousands. But where to buy NFTs?
The largest and most popular platform is OpenSea, an American platform created in 2017 that allows user interaction with NFTs from different blockchains beyond the Ethereum network, such as Solana and Polygon.
Despite being the main one used by great artists, there are several alternatives on the market, with trading platforms even exchanges, those in which investors trust the custody of their tokens.
Binance NFT, Coinbase NFT and FTX NFTs are some of them. Magic Eden, Rarible and Zora are other independent platforms also recognized by the market.
Even with high competition, we historically see the consolidation of OpenSea as the main NFT trading platform in the market. Its security parameters, usability and diversity of available tokens have established user trust, giving the platform the largest market share in the segment.
The Blockchain User Behavior report shows that Brazil continues to occupy the top positions in terms of overall NFT adoption and market share.
The sense of community created around these tokens was not only successful, it became a phenomenon among celebrities and even institutional investors.
In the world of celebrities, you have certainly heard about the millionaire purchases made by Neymar Jr. and Justin Bieber from BAYC collection items.
They weren't the only ones. Whindersson Nunes, Pedro Scooby, Jay-Z, Madonna and Snoop Dogg are just a few of the other names that have also jumped on the NFT bandwagon.
But not only the recognition of artists live the NFTs. The adoption of this technology has already been used in several different contexts. From fighting fake news - with the FACTS-NFT platform putting up for sale 20 carefully selected fact checks in the form of cryptographic tokens; the sale of articles in newspapers such as the New York Times and the purchase of video clips as in the case of A Criptoarte.
The possibilities are endless. And there's still a lot to explore on the horizon for NFTs.
