The rise of this nonfungible token (NFT) was a sight to behold, with the industry apparently garnering an increased amount of mainstream grip with each passing day. To put things into perspective as to how big this distance has really become, conservative estimates indicate that the sum of money which has entered into the fast-evolving industry currently totals over $500 million.
Another way to estimate the effect which NFTs have had about the global market is by looking at the diverse selection of artists, celebrities, musicians — basically just about anybody, at this point — which have adopted this technology. For instance, thrash metal pioneers Megadeth recently became one of the newest adopters of NFTs, enabling supporters to purchase unique collectibles which are officially endorsed by the band. This just goes to demonstrate how prevalent the reach of the technology has come to be virtually instantly.
Also, what makes NFTs so exceptional is the fact that they cannot be swapped for other tokens at a mutually interchangeable fashion. This is contrary to the two how most fiat resources operate — i.e., a U.S. dollar can be redeemed for many different goods — as well as how most cryptocurrencies, like Bitcoin (BTC) and Ether (ETH), function.
As a consequence of this special ability of theirs, NFTs can function as excellent mediums of possession, allowing people to purchase a broad variety of items which range from digital artwork to music to even real estate.
NFTs require a decentralized environment to flourish
Since the nonfungible market continues to flourish, it stands to reason that more and more people will continue to move towards the use of highly decentralized blockchains offering a high level of information transparency and flexibility for their users concerning trading NFTs, particularly when compared with centralized solutions such as Rarible, OpenSea, Binance NFT, etc..
Now there are Byzantine fault tolerant (BFT) cluster-based blockchains which have been tailor-made for handling NFT database management responsibilities. A decentralized database can offer users streamlined access to a data delivery network which ensures a high level of protection from information breaches, network failures and performance issues — all problems that currently plague the international NFT ecosystem in a big way.
On a technical note, it should be pointed out that while most NFTs today have been built atop the Ether network, the ecosystem is currently facing some serious congestion problems in addition to problems related to high gas fees. Most recently, it had been reported that the typical price of facilitating a transaction on the Ether network (between the end of February and March) was hovering around the $16–$20 range.
Lastly, it’s important to note that while most developers today still continue to rely on centralized databases (such as the ones supplied by Amazon Web Services and Microsoft), the fact of the matter remains that these databases include a centralized point of failure and are therefore vulnerable to different third party intrusions and risks.
The future looks bright for NFTs
With more and more money — be it retail or institutional — entering the NFT market with each passing day, many experts believe that this distance will fairly quickly transform into a multi-billion dollar industry, whose usage cases will spread far beyond the range of simply artwork and music possession.
Related: Art reimagined: NFTs are changing the collectibles market
In addition, it stands to reason that, in the future, we may see NFTs used for a wide selection of everyday payment/transaction purposes — such as purchasing clothes, shopping at supermarkets, etc. — since these tokens have the inborn ability to connect a individual’s identity using their purchased items, thus making refunds and merchandise swaps easier and more hassle free.
Furthermore, together with the COVID-19 pandemic continued to anger on throughout the globe, many governments are already promoting the use of contactless technologies inside their borders. This could be an additional reason NFT adoption could grow quite significantly in the months and years ahead.
In closing, to graph out the meteoric rise of these digital offerings, we can see that many notable NFT marketplaces have recently witnessed record high transaction volumes. For instance, OpenSea’s monetary in/outflow volume spiked with a whopping 1,400% since the start of the year, while Rarible’s overall trade volume increased by 634% over the previous few months.
The perspectives, ideas and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and views of CoinNewsDaily.
Pavel Bains is the CEO of Bluzelle — the principal database for the new internet. Pavel is also a frequent contributor to Forbes, Huffington Post and Fast Company, writing articles in the areas of finance and electronic media.