How NFTs affect the economy | The Guardian Nigeria News
Some critics described the NFT market as a bubble that would soon end. However, there are no signs that the NFT ecosystem will slow down anytime soon. One of the reasons behind the rapid explosion of NFTs is their ability to take various forms, representing digital and physical assets such as artwork, real estate, and video game resources. If you want to learn more about the history of NFTs, NFT profit is here to help you make good decisions and develop your knowledge along the way.
Experts believe we will see the creation of many platforms to showcase NFTs and manage their trades more efficiently. Perhaps that is why they are gaining traction among venture capital investors. However, NFTs also create robust economic opportunities for artists, content creators, collectors and publishers worldwide. The following article discusses how NFTs affect the economy.
Monetizing digital and physical assets
Before the introduction of NFTs, it was virtually impossible to collect digital art. The same goes for other digital objects and physical assets, including sports collectibles, lots and even clothing. NFTs have enabled artists, creators, developers and collectors to easily tokenize and monetize their works.
NFTs are created on a permanent digital blockchain ledger, with unique features to distinguish them from one another. That provides an accurate and irrefutable record of the origin, authenticity and ownership of each item, allowing creators to benefit from their works. NFTs are also limited in supply, leading to scarcity in a market that has been plagued by counterfeits for decades.
NFTs also make it possible to combine two items into a single entity called a race. This can help artists and creators maximize their income from the sale of their works. In addition, NFTs generate value addition as the original creators can still receive a fraction of the proceeds each time the items change hands.
Aside from independent creators and artists, companies can also use NFTs to create new products and services with unique features for global consumers. NFTs can also help companies tokenize their existing high-value product offerings to attract higher prices. The tokenization of real-world assets improves the efficiency of buying, selling and trading them on platforms. It also reduces the chance of risks such as fraud.
NFTs have enabled many artists and collectors to make huge profits from selling their works. NFT sellers can connect directly with buyers, without intermediaries, thanks to blockchain technology. This enables creators to reduce costs and take full advantage of their works.
A fast growing market
NFT technology is quickly growing into a lucrative market, attracting creators, content developers, collectors and investors around the world. NFT sales generated an estimated $13.7 million in the first half of 2020, but that number skyrocketed to about $2.5 billion over the same period in 2021. NFT sales in some marketplaces had reached hundreds of millions as of 2021. Those statistics show the rapid growth of the NFT market.
While most NFT marketplaces have focused primarily on digital artwork, art accounts for about a quarter of total NFT sales. The market also includes NFT fashion products such as the recently sold RTFKT digital jacket for $125,000. Twitter founder Jack Dorsey sold his first tweet as NFT for a whopping $2.9 million in 2021.
An NFT version of the New York Times column also recently sold for $560,000. Those are reminders of the unlimited economic possibilities of NFT. A recent report from PwC found that blockchain technology could add $1.76 trillion to the global economy, and NFTs will account for a larger portion of that capital.
NFTs and their marketplaces are rapidly democratizing the production and exchange of digital assets. Non-functioning tokens have enabled independent developers, artists, entrepreneurs and businesses to seamlessly access huge and fast-growing global markets for various digital assets, driving inclusive economic growth.