NFT's: What's all the fuss about?

We have all seen and heard countless news articles and social media posts about the latest craze, NFT's. We want to know if this really is a craze, fad or bubble. Or, is there something more to these collectible blockchain assets?

What is an NFT?

NFT's or non-fungible tokens, are a way to store real-world or digital assets inside a blockchains data, assigning digital ownership to the owner or owners of the NFT. NFT's can be obtained in a variety of ways such as purchasing with crypto and fiat or even by competing in games. The value of an NFT is usually linked to its scarcity, fame or notoriety. An NFT can be many things such as an in-game item, collectible item or artwork, a financial product or even a naming system. New intriguing uses are being dreamed of all the time.

What are Non-fungible Tokens ahyway?
- Digital ownership verification
- Key characteristics:
- Verifiable (artist, provenance)
- Programmable (royalties, adjustments)
- Portable (multiple places at once)

Tokens can represent:
- Art/collectibles
- In-Game items
- Financial products
- Name systems
- Many more...
Total number of sales involving a non-fungible tokens (NFT) in the art sector worldwide over the previous 30 days from April 12 to June 15, 2021, by type
Source: Statista

Are they just a craze?

NTF's have often been often been called a craze or the latest fad. That indicates that they do not have a long lifetime of popularity in the real world. But they are extremely collectible and fetch some eye-watering prices on the open market. You can look at NFT's like modern day antiques.

The value of these assets can fluctuate along with the overall market but their implied value comes from what they represent. You can check the live list of popular NFT's by ownership on Open Sea. We believe the NFT market is here to stay. Only time will tell, but the world loves to collect, compete and show off. NFT's are a way to do all that digitally. The love of meme NFT's has really taken off, many fetching enormous prices. Have a look at some of the most famous below.

Charlie Bit My Finger: $760,999
Disaster Girl: $500,000
Nyan Cat: $600,000
Overly Attached Girlfriend: $411,000
Grumpy Cat: $83,000
Bad Luck Brian: $36,134
Leave Britney Alone: $44,00

NFT & DE-FI integration

Combining NFT's with DE-FI has opened up new avenues for developers and business to build services. By holding an NFT, you will now be able to get a loan, backed by that NFT. Being able to fractionally invest in an NFT will be extremely attractive to newcomers just looking to test the market. Just like investing in a business, you become a kind of shareholder in the NFT. If the value increases, so does the value of your share. Hooray! You can also sell your share in the NFT at any time and claim your profit. Tokenizing risk-weighted assets will also become extremely attractive to those institutions looking to record their assets on the blockchain. The whole ecosystem is still defining itself. NFT's can grow hand-in-hand with the DE-FI space. Supported by a wider blockchain infrastructure. Imagining blockchain without the smart contract today is impossible. The smart contract enables NFT's and DE-FI to exist with one another in harmony.

What future uses could NFT's have?

What can NFT's do for us in the future. NFT's offer a myriad of ways for people to lock-in ownership and this gives rise to many ingenious ways to leverage their security and collectability. The use cases for NFT's are varied and can be applied to many real-world situations and digital products. There is evidence that several large players are looking into services like NFT's as collateral.

Globally iconic entertainment brand and studio, Marvel, has recently partnered up with VeVe to offer popular MCU characters and comics as digitally collectible NFTs.

Rapper and serial entrepreneur Jay-Z recently announced that he will be selling an NFT based on the album cover of "Reasonable Doubt" – his 1996 debut album.

NFT's can be used in supply chain, ticketing, identity verification and customising the metaverse. Expect to see a lot more growth in this area over the next 2-3 years while this new and interesting side of the crypto-space matures. We can't wait to see what people come up with next!

Summary

It's fair to say that NFT's are still in their infancy. It's also probably fair to say that some of the prices seen in 2021 Q1 were inflated and probably not representative of the future market. That being said, NFT's have brought some fun to the crypto-space. They have enabled a whole new area where people can get interested, take part and even contribute to change.

Some of the remarkable NFT stories around the web only illustrate the excitement many people associate with NFT's. If you want to know whether we think you should invest in NFT's. Ask yourself, "have I ever enjoyed collecting anything?". If you answered yes, then you probably would enjoy the buzz of owning your very own NFT.