Will NFTs Stand the Test of Time?
NFTs are one of the most widely talked about phenomena of recent years, dominating media headlines and sparking the curiosity of wider society as people try to wrap their heads around this innovative technology.
This has led to two distinct narratives that have long surrounded NFTs – are they a transformative technology that can reshape society, or a passing fad that has descended into a gold rush?
Many people have been reluctant to become involved in the space because they are unsure how long NFTs will be popular. Although no one has a crystal ball, you can certainly make a better judgement call once you develop a more thorough understanding of what NFTs are, and why they are popular.
Will NFTs stand the test of time? This is what you need to know:
What are NFTs?
NFTs – short for non-fungible tokens – are digital assets that are stored on the blockchain. At a basic level, an NFT is a file which contains a unique piece of property – whether it is the intellectual property rights to a song, digital artwork, a film script or any other item which is recognized as unique.
NFTs differ from fungible tokens because they can’t be directly replaced with an identical token, property or another asset. In part, this is what gives them their value.
Although many people struggle to wrap their heads around the idea that a digital file can potentially trade for ten times the value of a house, it is no different from the high value that fine art pieces or historical artefacts can garner.
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Why are NFTs so popular?
NFTs are popular for a couple of predominant reasons.
The first is the reason that many NFT critics believe will end the market before it has the chance to mature – financial gain.
It is no secret that certain NFTs have sold for sky high sums, making both the seller and the creator multi-millionaires overnight. The prospect of achieving such a feat is enough for many NFT creators or retail investors to enter the space and try their luck at making a quick buck.
Another pertinent reason why NFTs have grown in popularity is that the potential of the technology that underpins them is fascinating.
It is easy to characterize the current NFT market as simply digital art held in encrypted files, but it is predicted to become far more relevant to wider society over the coming years.
NFTs are making it possible to interact directly with your favorite brands, own a share of your favorite song, build an online community or bankroll your creative efforts.
This second reason is what gives NFTs a strong chance of standing the test of time.
How can NFTs evolve in the future?
NFTs will continue to adapt to changing market trends like any other asset class, but they have the potential to go further than that.
The future potential for NFTs is mesmerizing. Putting the ownership of creative assets in the hands of the artists and their fans will revolutionize the creative arts. It will be far easier to earn a living from your creative projects or own a piece of famous artwork by buying an NFT.Meanwhile, businesses will find it far easier to build strong online communities and extend the reach of their brands as a result.