Rising Popularity of NFTs
Thanks to the hype around cryptocurrencies around the world, NFTs have also gained a lot of traction, especially in the last couple of years. It's one of the latest blockchain-based innovations created in 2015 on Ethereum's blockchain network, which eventually became one of the fastest-growing trends in the crypto market.
If you're wondering why NFTs are one of the most popular assets right now, in this article, we will zoom in on the lenses of NFTs and what makes them a valuable blockchain-based innovation in 2022.
Curiously enough, in 2012, the NFT past concept 'Colored Coins' was first mentioned in a paper by Meni Rosenfield, but for the Bitcoin's blockchain. The main idea behind Colored Coins was to use Bitcoin as a way to prove ownership of real-world assets. For this purpose, a token element would be added, which would make them unique.
That said, the Bitcoin blockchain was never intended for the development of the Colored Coins, and following 2012 a lot of shifts happened in Bitcoin's blockchain network, including the development of other blockchain networks built on top of the Bitcoin's blockchain, such as the Ethereum's blockchain where the first NFTs as we know today were launched.
This leads us to the first NFT, which was created by Nick Johnson – ERC721 – on Ethereum's blockchain. It's also worth noting that nowadays, most of the NFTs today are created on Ethereum's blockchain technology, even though there are some which are created on other networks, and in the future, we except for other crypto projects to boost the development of NFTs.
What are NFTs
As we mentioned earlier, the main idea behind NFTs was to prove the ownership of real-world assets. Although NFTs are also used today to prove the ownership of digital assets, the idea stayed the same. NFTs had to be unique and segregated from other assets, which means they are developed as non-fungible assets. Hence, each NFT cannot be replaced with another NFT on the market.
One of the main factors that boosted the popularity of the NFTs was the rise of online trading sites where you can purchase NFTs. As it is a decentralized marketplace, it's easy to wonder where does the NFT value come from?
How come there are NFTs that have sold for more than $500,000 like the New York Times article and many other that don't appreciate in value so quickly? The simple answer is that due to the decentralized nature of the market, the overall supply and demand for specific NFTs dictate their value. So, an NFT has value because the community that has purchased a fraction of it believes it has value.
Types of NFT
There are vastly different types of NFTs available on the market. Some of the most popular ones are collectible art which can be anything from art pieces, videos, photographs, and articles to generative art, GIFs, and stickers.
The main advantage of purchasing NFTs as means of ownership of fine art is the direct relationship between artists and fans. Otherwise, NFTs are also used for buying and selling songs, video games, and even collectible cards. It's safe to say that in the future, NFTs can be used as proof of ownership of everything from art to real estate properties since the technology is easily adaptable for different real-world markets.
Some Valuable NFTs
The most popular years for NFTs were back in 2022 and 2021 were some NFT pieces worth millions of dollars, and they are the main reason why there is a huge hype around the NFT market today. Some examples include the original source code of the World Wide Web worth $5.4 million, CryptoPunk #780 for over $7 million, and Elon Musk's tweet has massed $1 million as an NFT, although they took it off the market among many other successful NFTs.