The Covid-19 pandemic shut us all in our rooms, cooped up in front of the blinding screens. Everything went online, even businesses. With the need to have everything available online, from school tuition to earning through social media platforms, there emerged a dire need to own properties online. That was when cryptocurrencies like Bitcoin or Ethereum came into vogue. However, these were fungible, easily replaceable tokens. As a consequence, NFTs, or Non-Fungible Tokens started their own fanbase, with its indestructibility and verifiability- a revolutionary leap in the history of the digital economy and global trades.
NFTs helped reshape the buyer-seller co-dependency. Now if someone bought a digital item with NFT, the metadata in the blockchain embedded their ownership forever. Just like a famous piece of art that can be traced back to its original artist, digital assets bought with NFTs can always be authenticated without the intervention of third-party verification.
NFTs (Non-fungible tokens) are digital assets that are operated with blockchain technology (mainly Ethereum), either on-chain or off-chain, for the security and verification of the provenance of ownership. This allows artists or consumer-oriented businesses to capitalize their products. The NFTs can be traced back to their original owners with the help of distributed ledger technology. They have revamped the map of the digital economy, raising an uproar in the online buyer-seller world.
Back in 2021, the worlds of digital art and sports witnessed the humongous impact NFTs had on them. The more the sales of NFTs increased, the more enthusiasm for their power spread. NFTs started having a strong grip on the digital economy.
Digital artists could gain so much from selling their artwork on the internet that was never known before. With the rise of NFTs, digital artworks were now being sold in bulk in exchange for huge profits. Artists did not need to involve a physical gallery for their art exhibition. Even aspiring artists could sell their artwork and show off their talent to the whole world.
Music artists utilized the NFT evolution in the digital world by launching exclusive albums and tracks. They even profited from secondary sales that generated quite a lot of revenue. NFTs have enabled artists to avoid piracy. They can be relaxed now as their artwork as NFTs will always be traced back to them.
If you are an avid gamer, you would know the fascination gamers have with owning unique assets in the virtual world. From buying a property to a clothing item, NFTs are a great source of pleasure for gamers. The artists who make these unique items also generate enough through NFTs.
On the other hand, games like Sharpnel, Heroes of Mavia, and Hytopia, have allowed their players to avail the play-to-earn option. This way games have the scope to turn the traditional, rather boring gaming landscape into an exciting, revenue-yielding journey.
NFT is a wonderful contribution to the world of digital art as it enables art lovers and artists to connect and engage in transactions in a secure environment. However, despite its immense potential, NFT does come with its own set of downsides.
NFTs are backed by blockchain technology , which accounts for a significant energy consumption. Ethereum is responsible for a huge energy consumption for every transaction, leading to huge amounts of carbon emissions that have a negative impact on the environment. This is why NFTs have to face several criticism from many.
NFTs also have a high volatility, just like the typical cryptocurrencies. With dramatic fluctuations in its value, NFT becomes uncertain and unreliable for many artists and collectors. That's because the fluctuations make it highly difficult to calculate the true value of digital assets, which may come with an inflated price tag while losing their value the very next day.
NFTs have, without any doubt, contributed to the digital economy while opening up new windows of opportunities for digital art dealing. However, like many other technologies and innovations, it isn't without challenges. From the legal and moral ambiguity to the risk of fraud and environmental damage, the downsides are not negligible. But NFTs are being improved every single day, and perhaps the future will be better than today's scenario.