NFTs are non-fungible crypto tokens that lack the fungibility of their digital counterparts, hence the name. Unlike cryptocurrencies, each NFT token is unique and can be held only in a single wallet.

They are not interchangeable; meaning they cannot be exchanged like dollars or Bitcoin because each NFT represents a unique digital item and price point. NFTs were created to help convey that a digital item is as original and precious as a physical one.

Although the owner of the NFT does not always assume the exclusive rights to use its attached work, NFTs can confer the authenticity of said item. Typically, NFTs are present on an Ethereum blockchain and represent a piece of a digital media item, for example, an image, text, or video. NFTs became extremely popular in 2017 when collectible images of digital cats “cryptokitties” began selling for thousands of US dollars.

This year, the work of a digital artist named Beeple was sold for $69.3 million. While this may seem cumbersome and not very lucrative, it may present greater value opportunities for creators and organizations that extend beyond just basic images.

According to a recent survey, the value of NFT transactions has risen by 400% in the last 12 months i.e., an increase of $240 million per year.

Additionally, 222,000 new wallets have been set up to store or pay for NFTs. Bringing the total value of the NFTs issued on the Ethereum Blockchain to $14.3 billion. A figure which is expected to double in the next year. By the year 2025, experts predict that the value of worldwide NFTs will reach $80 billion.

A poll conducted in March indicated that 11% of American adults have purchased an NFT. It is important to understand the use of NFT tokens is expanding beyond cats and collectibles and it is expected that they will prove useful for all sorts of activities in both physical and digital environments.

Creating consistent value in an inconsistent market

NFTs live in an open blockchain system which allows all the transactions to be viewed publicly. This makes it possible to code features into contracts that govern the rules of buying and selling NFTs. Such contracts can give digital artists a stake in their own work and a share of the proceeds – even after the artwork is sold.

This is not possible when the artwork is sold through conventional means. NFTs can also link to a text that contains the legal contract of ownership of that NFT. However, the property rights of the NFT are usually conferred by the platform issuing them. Depending on the issuer, you may or may not be allowed to use the NFT for commercial purposes. The ownership of an NFT is equivalent to the unique ownership of a digital item.

The craze about NFTs is taking over the world. NFTs have moved well beyond the digital world. Several art galleries in London are showcasing NFTs – another indication that non-fungible tokens are moving towards mainstream adoption.

Recently, the NFT platform ENVOY has committed to creating and producing a suite for artists and NFT collectors that rewards them for showcasing their work and NFTs on its platform. The platform even intends to reward people for holding and using their NFTs.

Several NFT collectors and platforms are getting increasingly involved in the “metaverse” as well – a parallel digital universe where online games are played and digital items are stored and collected. This too has led to the growth in popularity of NFTs and digital collectibles.

Transitioning from art to utility

While different artistically defined NFTs (such as Beeple’s art piece) have burst the market wide open – the value of the NFT market extends far and beyond digital images. They may even be able to help you buy the property and or access a vaccine passport. For example, the country San Marino has allowed the use of such tokens as digital covid-vaccine passports. Due to the secure nature of blockchain – and these tokens’ proof of unique ownership – NFTs have become extremely useful for financial ...