Non-fungible tokens (NFT) have become one of the main trends in 2021. Technology was discussed literally on every corner, and many celebrities tried to make money on hype.
We have collected expert opinions and unusual success stories, as well as analyzed the prospects for the development of the segment in 2022.
Technology confirms ownership of a digital object. If cryptocurrencies and fiat money are interchangeable, then one NFT representing a picture conditionally is not equal to the NFT of another user, since these can be different paintings by different artists with different values.
Each NFT is unique and singular. Even if a digital object is issued in several copies, each will have its own non-fungible token.
We talked about the technology, its development and application in more detail in the educational cards.
NFT’s annual trading volume exceeded $ 14 billion
Although the first NFTs appeared several years ago, the technology gained real popularity only in 2021. Trading volume for the year exceeded $ 14.2 billion, according to
The most popular blockchain for NFT creation, as expected, turned out to be Ethereum.
In terms of trading volume, OpenSea became the leader among marketplaces with an indicator of $ 3 billion in August. The segment has grown so rapidly that OpenSea has even been credited with a theoretical estimate of $ 10 billion.
The largest NFT marketplaces by trading volume. Data: The block…
Analysts at the investment bank Morgan Stanley have assumed that by 2030 the market for non-fungible tokens will reach $ 300 billion, according to the forecast, of which $ 56 billion will belong to the luxury goods industry.
Christie’s sold Beeple’s NFT for a record $ 69.3 million
The living legend of the NFT segment is digital artist Mike Winckelmann, better known by his pseudonym Beeple.
It was he who sold the NFT painting Everydays: The First 5000 Days for a record $ 69.3 million through the British auction house Christie’s.
A total of 353 applications were received. With a starting price of $ 100, the final bid was $ 60.3 million, with another $ 9 million in commission.
Everydays: The First 5000 Days is a collage of thousands of Winckelmann’s works published online since 2007.
Everydays: The First 5000 Days. Data: Beeple…
Less than two weeks after the deal, Beeple compared the NFT sector to a bursting dot-com bubble. However, according to him, the technology is strong enough to survive this period.
Winckelmann also converted $ 53 million in revenue after deducting auction house fees and taxes into US dollars, fearing Ethereum’s volatility.
“I’m not even close to being a crypt adept. I’ve been doing digital art long before all this bullshit. If NFTs evaporate tomorrow, I will continue to do this, ”concluded the artist.
While Beeple does not support the crypto industry, it does charity work. At the end of March, the artist sold an NFT painting OCEAN FRONT for $ 6 million to Tron founder Justin Sun and donated the proceeds to fight climate change.
Experts were optimistic about the prospects for the development of the NFT sector
Ethereum co-founder Vitalik Buterin has confirmed the potential of non-fungible tokens in funding public goods.
To do this, he proposed the creation of a DAO, whose members could collectively approve some NFTs with the assurance that a portion of the proceeds from sales would go to charity. And to draw attention to tokens with a social payload, Buterin urged to link them to social media profiles.
“If everyone agrees that one of the tokens is more interesting than the others, then it will be of great value in the eyes of its owner. It will be relevant for those who are ready to pay an even higher price for it, ”he added.
Buterin praised Jack Dorsey’s decision to donate $ 2.9 million from the sale of NFT’s first tweet to charity. At the same time, he expressed concern that the potential of the technology will not unfold if the focus remains on celebrities.
According to billionaire Mark Cuban, non-fungible tokens have huge potential for the next 10 years. The founder of the cryptobank Galaxy Digital, Mike Novogratz, agreed with him and called the technology “the road to the future.”
“NFT are not even first graders, they are preschoolers. We are at the dawn of a new and exciting era. I am absolutely sure that within 10 years the NFT sector will become much larger than most people think, ”he said.
The head of the FTX crypto derivatives exchange, Sam Bankman-Fried, added that NFT adoption is happening faster than other cryptocurrency segments.
He noted that people made a lot of money selling NFTs because it “was one of the ways to get into the game.”
Former US broker Jordan Belfort, known as “The Wolf of Wall Street”, believes that the value of these digital assets lies not only in “making money” but also in a sense of community.
The most popular NFT collections of 2021 were CryptoPunks from Larva Labs and Bored Ape Yacht Club from Yuga Labs, but others also made money on non-fungible tokens.
For example, athletes Tyson Fury, Floyd Mayweather, Mike Tyson, LeBron James, Shaquille O’Neal, Khabib Nurmagomedov, Alexander Usik, Alexander Ovechkin, Garry Kasparov and singers Tina Karol, DOROFEEVA and Grimes.
NFT fever has not spared the creators of the memes Nyan Cat, Bad Luck Brian, I Don’t Want It, I Will Not, Puzzled Chloe, Pepe the Frog, and Disaster Girl.
In such a state of the market, it is not surprising that schoolchildren have found a way to monetize non-fungible tokens. For example, 12-year-old Londoner Benjamin Ahmed made about $ 350,000 from CryptoPunks-style NFTs.
Minting cost him $ 300. In July, the student’s collection of 3350 NFTs was sold out in nine hours, bringing him over 80 ETH. On further resale, Benjamin earned an additional 30 ETH in royalties.
In November, 14-year-old Abigail from the United States earned over $ 1 million per day on NFT. She released a collection of 8,000 beluga whale pictures as non-fungible tokens.
The animals are adorned with glasses, caps, fur coats and other items. The young artist created most of them on the iPhone 8. And her 25-year-old brother Adam, who is engaged in trading, helped to understand the technology.
Minting cost $ 5300. For each sale, the schoolgirl donated 10% to Sunshine Kids, an organization for children with cancer, and another 10% to non-profit foundations that help beluga whales. The amount of donations has exceeded $ 200,000.
There were also those who decided to make money by someone else’s labor. Since 2013, Art Wars artists have been creating Star Wars stormtrooper helmets as art objects. Without their knowledge, the works were sold as NFT for 1600 ETH.
Curator Ben Moore has photographed some of them and put them up for sale on OpenSea. The marketplace received a notice of copyright infringement. The page with the Art Wars NFT project on the platform is currently unavailable.
Moore does not deny that he created the tokens without the permission of the artists. However, he claims to have sent them emails with information about the collection. About 12 artists are already preparing to file a lawsuit.
The main reason for the popularity of NFT was speculation, which helped token holders earn millions of dollars. But some in the industry saw other benefits as well.
Morgan Creek Digital co-founder Anthony Pompliano said the interest in NFT is driven by a desire to “recreate the collecting industry” in the digital environment.
“Every person who usually spends $ 50,000 to $ 1 million to buy a car, watch, house, boat, etc., now understands that they can spend the same money on a digital product and display it in front of a large number of people on the Internet.” , – he wrote.
Pompliano recalled that in September 2020, he predicted a 6,000-fold growth in the digital art market, and stressed that he had underestimated the sector. He is confident that technology “will absorb not only digital art, but also collectibles, luxury and more.”
Other NFT owners noted the possibility of forming communities around the various collections. In October, the owner of CryptoPunk # 6046 under the nickname Richerd refused to part with his non-fungible token, even for $ 9.5 million.
He wrote that if 10,000 owners of 10,000 NFTs didn’t want to sell them, then everyone would be invaluable. He was told that “everything has a price”, but Richerd refused to sell his “punk” regardless of the offer.
CryptoPunk # 6046. Data: Larva labs…
Then one of the users made a bet of 2500 ETH for CryptoPunk # 6046, and the token owner actually declined it.
“My personality, along with the identity of other iconic punks and monkeys, has a value that goes beyond the NFT. We have our own brands, […] and it has value. Because I value personal brand and identity, it was easy for me to refuse, ”wrote Richerd.
If successful, the deal would be the largest sale in CryptoPunks’ NFT collection history to date. But even in the speculation-based segment, there were those who “entered the game” not for profit.
In 2021, NFTs blew up the cryptocurrency market. Some users only wanted to make money, others – to turn the new trend for good. There were also those who aspired primarily to the development of technology.
Even if you think of NFTs as “million dollar jeepgs”, they will definitely go down in the history of the industry and continue to grow in 2022.
Judging by the forecasts of experts, we are expecting an increase in trading volume, the emergence of new collections and the expansion of the sector to other industries.
Celebrities, collectives and teams will continue to make money from their fans, but only time will tell whether NFT will succeed in becoming more than just an object of speculation.