NFTs made headlines earlier this year after the industry as a whole discovered all of their different use cases. We are now cruising a period where the concept seems to be “cooling down”, while people choose to buy litecoin, Bitcoin, and other cryptocurrencies. The concept of virtual identity, tracking, and authentication through NFTs has been around since 2017, and it only now managed to break into the mainstream. Celebrities from all backgrounds are releasing custom NFTs to claim part of the market share, as retail investors see each and every opportunity as a long-term profitable bet.NFTs in 2021
2021 has definitely been bullish for NFTs. The year started in a powerful way, as we saw daily volumes spike across many platforms, including Rarible, NiftyGateway, NBA TopShots, as well as OpenSea.
The exponential growth of the market started with a bullish newsletter from Anthony Pompliano, a long-term Bitcoin bull and tech believer, who mentioned that digital art will increase in popularity over the next few months. All the artists and platforms mentioned in his newsletter became more popular as a result of this newsletter, and digital art went from pixelated paintings to music, and shortly after that to experiences. While digital art was the first one to find product-market fit, we expect to see NFTs grow more popular across different categories and industries as well.NFTs as experiences
Nifties as gateways to experience are by far one of the most important use cases that we expect to see growth in as the market continues to grow. Mark Cuban recently announced that the Dallas Mavericks were working on fan NFTs that would offer not only access to games (making it a form of a ticket) but also exclusive events that only premium members can visit.
Shortly after the trend started, Gary Vaynerchuck jumped on the trend as well, creating VeeFriends. Coming at a slightly higher price point, VeeFriends are sketches made by Gary, attached to an Ethereum address, and sold as a package with calls, meetings, and access to private events. Users would then become some sort of premium fan, meeting Gary in person and making actual use of their NFT, something which currently is a lacking factor.The gaming industry is disrupted by NFTs as well
Speaking of use cases, innovative enthusiasts of the space are looking to implement NFTs into different areas of life, giving them more use cases, and that is primarily seen in gaming. While it was initially impossible to create unique value online, something which was a problem for MMO RPG games, we currently see efforts being made to break this stereotype. Games like Axie Infinity and Ember Sword are the two most popular games in this area, and there are hints that a whole Metaverse of decentralized games will be introduced to the world soon.
A great way to track decentralized games that seem promising is by following Delphi Digital, a research firm focused on the Metaverse and NFTs. One of the firm’s partners, Piers Kicks, has written a great essay on the topic and it is certainly worth a read.The current market outlook
After a blowoff in early March, the NFT markets have been consolidating to lower levels, with top NFTs maintaining their floor price strongly. As predicted, many NFTs from unknown actors have not only lost part of their market value but also their liquidity, which has made many people skeptical of the markets.
As we currently see cryptocurrency prices being more volatile than usual, it is impossible to assume where we are going in the short term. However, in the long-term everything seems rather optimistic. The arena is full of opportunities, and entrepreneurs are now spending more time thinking of creative ways to add NFTs to the world.Industries that use NFTs
We are already seeing blockchain technology and NFTs finding a potential fit across many industries where tracking and authentication are important. Here are some of the industries you should pay attention to:
Healthcare: Track patient records, medicine, and medical history
Education: Track prior educational levels, exam scores, and internships
Job market: Authenticate the validity of CVs and experience gained in the past
Art industry: Already disrupted through NFTs but expected to grow further in the future
Justice system: Track spendings, past locations, and criminal record
And that’s just a few of the bunch. Non-fungible tokens are a great innovation in the current condition of the world and we expect to see more efforts being made to implement them in existing systems globally.
While it is still early to say how this will affect the crypto markets, we expect to see Ethereum gaining more popularity through it, as it is the foundational layer that makes NFTs work. Other blockchains are likely to emerge as competitors along the way, but Ethereum will stay around for a long time.