Blockchain Cryptocurrency NFT Chapter 15 covers The Non-Fungible Token Market
The global market for non-fungible tokens is quite fragmented, with a number of large and mid-sized players accounting for the majority of market revenues. Key players are employing various strategies, entering into mergers and acquisitions, entering into strategic agreements and contracts, deploying more advanced technologies in non-fungible tokens, developing, testing, and introducing new and more efficient non-fungible tokens in the market.
The global non-fungible tokens (NFT) market reached USD 50.10 billion in 2021 and is expected to register a CAGR of 10.7% during the forecast period. Rising demand for digital art is a key factor expected to drive the market revenue growth over the forecast period. Digital art is defined as art created or displayed using digital technology. Non-counterfeitable tokens are valuable for artists as they ensure the authenticity and originality of blockchain representations of creative works. Grimes, for example, is the latest artist to benefit from the NFT gold rush.
As of March 2021, digital artworks worth approximately $6.0 billion have been sold. Similarly, digital artist Pak’s collection was sold for around USD 17.0 billion in December 2021, while digital artist Beeple acquired artworks worth USD 3.5 billion via Nifty Gateway in December 2020. Rising awareness and demand for digital artworks are some of the key factors that will drive the revenue growth of the global non-fungible token market in the near future.
North America non-fungible tokens market is expected to account for a larger revenue share as compared to other regional markets during the forecast period. Increasing adoption of the Metaverse is one of the key factors expected to increase the adoption of non-fungible tokens. Moreover, rising demand for digital artwork coupled with increasing number of digital artists creating digital content in countries such as the U.S. and Canada is expected to drive the revenue growth of the market in the near future. Moreover, the strong presence of major players in countries across the region is expected to boost the revenue growth of the North American non-fungible tokens market.
A “fungible” token, on the other hand, is a token that can be replaced by another identical token. Ether is the fungible token traded on the Ethereum network, meaning one Ether is identical to another. The same is true for Bitcoin. One Bitcoin can be exchanged for another Bitcoin because they have the same value. Physical currencies also work this way. A physical dollar bill is the same as another dollar bill, and thus both are “fungible.” But each NFT is unique. There is no other that is exactly the same, so they are not fungible – or not able to exactly replace another.
Are non-fungible tokens secure? Non-fungible tokens, which use blockchain technology just like cryptocurrencies, are generally secure. The distributed nature of blockchains makes it difficult (though not impossible) to hack NFTs. One security risk for NFTs is that you could lose access to your non-fungible token if the platform hosting the NFT ceases operations.
NFTs change the crypto paradigm by making each token unique and irreplaceable, making it impossible for one non-fungible token to be equivalent to another. They are digital representations of assets and have been likened to digital passports in that each token contains a unique, non-transferable identity that distinguishes it from other tokens. They are also extensible, meaning you can combine one NFT with another to “breed” a third, unique NFT.
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