In the last year, non-fungible tokens, otherwise known as NFTS, have been on the rise. NFTs are part of the Ethereum blockchain, which is similar to a cryptocurrency like a dogecoin or bitcoin. However, its blockchain supports these NFTs, which makes them work differently than a coin because they need to store extra information. Essentially anything can become an NFT, such as music, drawings, video clips, or GIFS.
How Do Ownership Rights of NFTs Work?
However, while the person who owns the NFT holds ownership of the work, anyone can make digital files or copies as many times as they want of the digital item. This means that besides saying you own a piece, there is not much you have in terms of ownership since anyone could use or download the same clip or image that you spent millions of dollars on.
Of course, the original artist still has reproduction and copyrights to the artwork. However, due to the fact that it’s all digital, NFT art is hard to authenticate, which means that many people could end up being scammed out of money to purchase what they think is “authentic artwork.”
The Recent Rise&Fall of NFT
This increase in demand for NFTs began during the beginning of coronavirus when people were stuck in their homes and learning more about the tokens through platforms like Tiktok. Due to education and boredom, more people purchased NFTS, which made the price of cryptocurrency go through the roof. However, with all good things, they must come back down, which is precisely what happened in the last two weeks.
Average prices for non-fungible tokens have been at an all-time low. While they were once averaging $1,400 in February, they’ve just dropped 70%, according to Nonfungible. The whole buzz that created this peak was a Beeble digital artwork that sold for more than 69 million dollars. While many would think this might be the end of the popular digital trading currency, it actually turned out to be the opposite.
Despite this giant crash, users are still selling, trading, and purchasing more than 5.8 million dollars’ worth of NFTs every day. While those volumes are lower than the average prices and trading volumes of the past, NFTs are still on track to gain more in 2021.
There is even some potential for companies to find ways to monetize NFTS and move into the marketplace with branded content or art to sell. Companies are always trying to find new ways to expand their technology, and NFTS may be the perfect way to provide a unique experience to customers.
Just like any type of digital currency, there is no accurate way to predict what will happen in the future or how the market will play out. The volatility could just be part of a marketplace learning to shift through new challenges, or it could completely deflate, becoming nothing more than a short time “fad.” Only time will tell for this popular cryptocurrency.