The NFT market 101 and its potential
The NFT market has exploded in 2021, even if not everyone knows that they have already existed since 2014.
In fact 9 years ago the artist Nili Lerner announced her NILIcoins, issued in a limited addition on the Bitcoin 2.0 protocol and created as art with the possibility to gain collector’s value after initial distribution. Brand names such as Twitter, Toyota, Apple, Ebay, Disney and Coca Cola were used, although according to the author they were not understood at the time.
The intent was to “promote a competitive credit-provides ecosystem”. Since the beginning of about 2021, very popular NFT collections have emerged such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC) and Cryptopunks, which together with Axie Infinity and Artblocks have totaled a whopping $12.7 billion in sales. The NFTs of these collections that I mentioned are highly speculative and owning one has become a symbol of exclusivity. Even celebrities have bought them. The american comedian Jimmy Fallon bought BAYC #599 and Eminem bought BAYC #9055.
Rapper Snoop Dogg and famous DJ Steve Aoki are also very active in the NFT sector, according to whom he has made more money with NFTs than in 10 years of music.
Decentralized games that use NFTs like the popular Axie Infinity are designed to be played on decentralized platforms rather than centralized like online games. These games are often cheaper, more accessible, and have better production values because they aren’t being run by big companies that prioritize profit over player experience. A crypto entrepreneur was robbed of 16 Cryptopunks and “a bunch of ETH” after clicking on some compromising links for his Metamask.
Following this trend of NFTs based on animal figures, everyone jumped into the NFT sector making collections of gorillas, birds, dogs, cats, ducks, etc… Needless to say, 90% of these projects collapsed as they have no use whatsoever. In my humble opinion, other than the famous collections mentioned above or those used by brands or artists, if NFT does not have a real-world application it is unlikely to be successful. For example, I am thinking of a freelancer who wants to sell his products or services, for example a physiotherapist or a life coach. You could buy their NFT and thus be able to access an hour of physiotherapy or life coaching. Another example that comes to mind is that of Ukraine’s Kharkiv Art Museum, that launched an NFT collection to finance the Ukrainian Cultural Heritage. The California Department of Motor Vehicles (DMV) is exploring the possibility of the issue of NFT car titles thanks to the partnership with Tezos.
In my opinion, if you have a company, the real advantages of NFT technology are:
- create unique experiences for your customers
- have new revenues
- build a strong community linked to your brand
- shape many brand ambassadors
- create greater transparency and authenticity in the management of your digital assets.
Each niche has its own specific particularities and make your assessments carefully as to how you can benefit from this technology.
In fact 9 years ago the artist Nili Lerner announced her NILIcoins, issued in a limited addition on the Bitcoin 2.0 protocol and created as art with the possibility to gain collector’s value after initial distribution. Brand names such as Twitter, Toyota, Apple, Ebay, Disney and Coca Cola were used, although according to the author they were not understood at the time.
The intent was to “promote a competitive credit-provides ecosystem”. Since the beginning of about 2021, very popular NFT collections have emerged such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC) and Cryptopunks, which together with Axie Infinity and Artblocks have totaled a whopping $12.7 billion in sales. The NFTs of these collections that I mentioned are highly speculative and owning one has become a symbol of exclusivity. Even celebrities have bought them. The american comedian Jimmy Fallon bought BAYC #599 and Eminem bought BAYC #9055.
Rapper Snoop Dogg and famous DJ Steve Aoki are also very active in the NFT sector, according to whom he has made more money with NFTs than in 10 years of music.
Decentralized games that use NFTs like the popular Axie Infinity are designed to be played on decentralized platforms rather than centralized like online games. These games are often cheaper, more accessible, and have better production values because they aren’t being run by big companies that prioritize profit over player experience. A crypto entrepreneur was robbed of 16 Cryptopunks and “a bunch of ETH” after clicking on some compromising links for his Metamask.
Following this trend of NFTs based on animal figures, everyone jumped into the NFT sector making collections of gorillas, birds, dogs, cats, ducks, etc… Needless to say, 90% of these projects collapsed as they have no use whatsoever. In my humble opinion, other than the famous collections mentioned above or those used by brands or artists, if NFT does not have a real-world application it is unlikely to be successful. For example, I am thinking of a freelancer who wants to sell his products or services, for example a physiotherapist or a life coach. You could buy their NFT and thus be able to access an hour of physiotherapy or life coaching. Another example that comes to mind is that of Ukraine’s Kharkiv Art Museum, that launched an NFT collection to finance the Ukrainian Cultural Heritage. The California Department of Motor Vehicles (DMV) is exploring the possibility of the issue of NFT car titles thanks to the partnership with Tezos.
In my opinion, if you have a company, the real advantages of NFT technology are:
- create unique experiences for your customers
- have new revenues
- build a strong community linked to your brand
- shape many brand ambassadors
- create greater transparency and authenticity in the management of your digital assets.
Each niche has its own specific particularities and make your assessments carefully as to how you can benefit from this technology.
Disclaimer: I am not aware of any third party rights on the images used. I undertake to cite the source if there are any and to adjust the position if requested.
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