The market for NFTs really started to grow in 2020 and grew exponentially in 2021 and 2022. Artists, celebrities, investors and businesses increasingly participated in this market. According to a report by NonFungible.com, the total value of NFT transactions quadrupled in 2020, reaching more than $250 million. By the end of 2022, the value had risen to an unprecedented $2 billion. This growth was driven by the increasing adoption of blockchain technology, the rise of digital art, and the desire for digital ownership in an increasingly digital world.
The turning point for NFTs was arguably the sale of digital artist Beeple’s artwork ‘Everydays: The First 5000 Days” at Christie’s auction house for a staggering $69.3 million. Not only did this sale break previous records, but it also helped the concept of NFTs gain widespread publicity, bringing what had previously been considered a niche market to the centre of global attention.
Impact and influence
The meteoric rise of NFTs has had an indelible impact in many areas. For artists and art professionals, NFTs provided a new medium and marketplace that guaranteed authenticity and enabled direct interaction with collectors. They turned traditional art markets upside down, as digital art now existed alongside physical artworks.
The music industry was also profoundly affected. Artists began releasing their music as NFTs to create unique experiences for their fans and new revenue streams independent of traditional distribution channels.
In addition, NFTs enabled the monetisation of virtual goods in the gaming industry. Virtual items such as skins, weapons and virtual land were converted into tokens as NFTs, giving them tangible value.
The impact of NFTs was not limited to the creative industries. Brands across all industries began using NFTs to engage with their customers in innovative ways. From tokenised branded merchandise to unique virtual experiences, NFTs offered a new frontier for brand engagement.
Click here, if you want to read the paper The Surge, Collapse, and Future of NFTs written by Dr. Johannes Kotte & Oliver Meyer behind this article.
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The present and the future
From 2022 onwards, the NFT market is falling. Market volatility, environmental concerns about the energy consumption of blockchain technology, and regulatory uncertainty are some of the factors that have contributed to this downturn.
However, despite these setbacks, it is important to remember the transformative potential of NFTs. Their ability to democratise the digital economy, guarantee digital ownership and foster creativity remains unmatched.
NFTs may be experiencing a market correction, but that doesn’t negate their fundamental value or their potential for long-term growth. Like any disruptive technology, NFTs are likely to go through periods of hype, disillusionment, maturation and stable growth. The current downturn may simply be part of this cycle, paving the way for the next phase of NFT evolution.
This phase can also be an opportunity for new technologies, platforms or tools based on NFT technology to get into the starting blocks to be part of the next launch of the NFT market.
In summary, despite the current challenges, the NFT market remains an exciting one. We are very excited to see which technologies will take off and become the next NFT market.
Please write in the comments which NFT technologies, to your knowledge, are already in the starting blocks and which ones you think have potential and could become established.
Oliver Meyer is the founder of ACYC. With a childhood interest in computers and programming, Oliver channeled his passion into a successful entrepreneurial career, founding several companies including PARUG GmbH and fruittune GmbH. Over a decade, he has honed his expertise in software architecture and IT, demonstrating commitment and discipline in every venture.
