Back in March of 2021, NFTs saw a monumental surge within various arts communities, with everyone from small artists to heavy hitters like Beeple, 3LAU and even Logan Paul carrying out gigantic tokenized sales. Digital collectibles are certainly something new, yet were quickly embraced by the crypto community and far beyond, with data tracking website NonFungible reporting that total NFT sales reached more than $2 billion in the first quarter of 2021, something remarkable compared to their $13.7 million in sales in the first half of 2020.
That number however, has currently dropped significantly, partially as a result of the NFT hype naturally dying down, and partially because of the recent decline of the massive cryptocurrency boom of the last 9 months. It is apparent however, that even though buying volume has decreased, NFTs are slowly but surely maturing within the market, and undoubtedly still are in their early stage with a lot more ground to pick up. According to data from NonFungible, more crypto wallets are making NFT-related transactions now for the first time in months. While actual trading volume has dropped, this means that more small artists are selling NFTs at lower prices, which indicates that the entry barrier is steadily becoming lower than it was back when NFTs were booming and selling for absurd amounts.
Right now, NFTs are undoubtedly going through Gartner’s hype cycle. Any new technology that gathers so much attention in such a short amount of time is bound to fall in popularity rather quickly, before it reaches its “plateau of productivity,” or in other words, the phase where it has matured within the market, is steadily finding more applications, and is rising in mainstream appeal.
Selling digital art is fun, and offers artists a whole new way to make a living off of their creations, connect with their audience and provide their most loyal fans with meaningful perks. There is no doubt however that the importance of new technologies is able to shine long-term one the hype dies down, and the technology behind NFTs has a lot of applications that will very possibly change the way art – and a lot of other things – are exchanged.
Blockchain technology allows artists to retain a percentage of each sale every time their NFT gets resold on secondary markets, something largely beneficial as their work increases in value. The blockchain ensures that ownership is authentic, and with the help of smart contracts (automatic transaction protocols registered on the blockchain), payments to the original creator are made seamless. Right now, transitions of something that involve any kind of ownership are dependant on a number of middlemen and lengthy contracts, which can oftentimes result in a not-so-transparent transaction. In the future however, other than providing artist with a secure way to monetise their works, the technology behind NFTs has the potential to change how assets like property and cars, or even land, change ownership.
There is no doubt that NFTs are still early in development, with endless possibilities on how they can influence the world of art, and beyond, in the future. Only time will tell where we’ll be 5 or 10 years from now, but one thing is for certain: we’ll be there every step of the way.
