NFT market on the rise: A trend is conquering the financial world

Digital finance problems are becoming more and more popular

Since the advent of Bitcoin and Co. Digital financial topics have gradually become more and more interesting to the general public. Cryptocurrencies have not only been a side issue for some time now. And just last year, digital currencies experienced an extreme recovery. According to a survey, 41% of cryptocurrency owners bought their digital funds for the first time in 2021. Digital currencies are particularly popular and respected in Brazil, Hong Kong and India. But interest is also growing in Europe.

Anyone interested in the crypto scene in the broadest sense will quickly realize that it has undergone tremendous development in the few years since it was created. What began with investors and traders buying bitcoins and thus expanding their portfolio with an innovative product, has evolved into an independent ecosystem that is becoming increasingly complex. Financial service providers and brokers now offer a wide range of products in digital currencies: A comparison of cryptocurrency cards for example, it makes clear to what extent its use as a means of payment has already penetrated the everyday lives of consumers. Another nuance is blockchain and cryptocurrencies like the NFTs. Non-fungible tokens are currently experiencing real hype.

Non-fungible tokens: What is behind the phenomenon?

But what are NFTs anyway?? NFT stands for Non-Fungible Token – which means something in the style of a unique or non-replaceable token. A bitcoin, for example, would be a fungible token because it is one of many and could theoretically be exchanged at will without changing its value. An NFT is more like a trading card in the physical world.

Most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency like Bitcoin, but its blockchain also supports NFTs, which store additional information, making them work differently than, say, an ETH coin. Specifically, NFTs can be pretty much anything that is digital. An NFT can be a piece of music, a graphic or even a post on Twitter – in fact, the founder of the platform could sell one of his tweets for almost $ 3 million. Using NFT technology is all about digital art. And what is art and what is not is, as we all know, in the eye of the beholder.

One could call NFTs a development of the art market on a digital level. This is not least reflected in the fact that for many buyers of NFTs, the emotional value of the work is at least as important as the price they pay for it.

Anyone who buys an NFT gets ownership of the digital work that is still visible to everyone on the blockchain. So it’s a bit like owning a Picasso that stays in the museum after you buy it. The uniqueness of an NFT is verified by upload. In addition, it is always ensured that the creator of NFT can be traced back.

The Frankfurt Museum of Applied Arts has set itself the task of making NFT technology more understandable: With the exhibition “Unblock GaudiThe museum is dedicated to crypto art and answers questions such as what blockchain, cryptocurrencies and NFTs really are.

NFT market on the rise: A trend is conquering the financial world

Image: Chetraruc on Pixabay

Buying and Trading NFTs: How to Do It

Since the NFTs are on the blockchain, the purchase is mostly made via cryptocurrencies settled down. However, there are platforms that make it possible to sell through a bank account.

Moreover: The first NFTs have already been auctioned off by the well-known auction house Christie’s. Such is the work Everyday by graphic designer Mike “Beeples” Winkelmann for about $ 69 million.

Anyone who wants to buy an NFT can do so through various online marketplaces, and crypto exchanges also offer NFTs for purchase. Reputable and well-known platforms include Open Sea, Nifty Gateway, Super Rare and Rarible, among others. Which platform is chosen depends not least on the desired payment option. The most commonly offered means of payment is Ether. As a rule, an Ethereum purse is required to process the purchase. In addition, it should be noted that trading on a blockchain is chargeable.

The NFT market performs better than classic cryptocurrencies

In its report for the first quarter of 2022, the blockchain analysis platform Nansen noted that the NFT market is currently developing more successfully than the broader cryptocurrency market. It also trumps the Defi market and the stock market. Specifically, this means that NFT indices as a whole surpass the crypto market by 103.7%. The NFTs also perform better in a direct comparison with the individual indices. It showed that collections of handmade art and music have remained fairly stable, while growth in the NFT games and generated arts sector has slowed.

With these profitable prospects, the online giant Amazon now also wants to get involved. CEO Andy Jassy promises that collaboration with the NFT market is conceivable and that NFT trading can be considered in the medium term. Being established in an online marketplace as large as Amazon could give the NFT market an extra boost.

These are the most successful NFTs in the current market

Last but not least, we would like to present the top 3 of the most successful and most expensive traded NFTs. These top 3 show once again how different the digital works can look in terms of content.

1. the merger

The currently most expensive NFT worldwide is The Merge by artist Pak. It was sold for as much as $ 91.8 million. However, the work does not belong to a single owner. It is a fragmented work, with parts distributed among 28,983 people.

2. weekday

We have already mentioned this NFT. For it went on Christie’s for $ 69.3 million over the virtual disk. Artist Beeples is well known by NFT lovers. Everydays is a collage of 5,000 photos taken over a period of 13 years.

3. Clock

The watch changed hands for $ 52.7 million. This work is more than a work of art. It was coined to draw attention to the ongoing imprisonment of WikiLeaks founder Julian Assange. The clock shows the days he has been in jail. NFT was bought by supporters of Assange. The money from the sale is to be used to defend him in court.

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