If there is a time machine, that time travels you back 10 years ago, what are you gonna invest in? Some might say Tesla, for me I would choose a type of cryptocurrency — Bitcoin. Do you know how much Bitcoin price has grown since 2011? Each Bitcoin cost approximately $3.50 back in May 2011, until the moment I write this article, it is around $45,000, the price spike around 12,500x ! Well, you heard it right and I didn’t make a mistake. Sounds crazy right? If you are fortunate or wise enough to buy $100 Bitcoin back then, you are a millionaire by now.
Cryptocurrency is built on top of a technology, known as blockchain. Talking about blockchain, to explain in simple, it is a permanent database that records all transactions on a network with characteristics like decentralize, immutable, security. These are the keys to make it a good asset (the nickname of Bitcoin is “digital gold”), and some even believe cryptocurrency eventually will replace cash.
I’m not giving advice to invest in Bitcoin or any other cryptocurrency. The point I want to bring out here is, cryptocurrency is a kind of fungible token. What’s a fungible token? Fungible represent interchangeable, in another term, if me and you both own a Bitcoin, it represents the same values, no matter which one you’re holding. In fact, fungible is the fundamental feature of any currency.
After knowing cryptocurrency and blockchain, let’s talk about our main topic today — Non-Fungible Token (NFT). Non-fungible simply means non-interchangeable. So NFT is special tokens that represent unique, non-divisible, collectible items. It is unique in the sense that they cannot be split or, exactly changed for other non-fungible tokens of the same type. In short, NFT is a digital asset selling on a blockchain network.
Blockchain provides immutability. So with Blockchain, ownership of the NFT can be proven, no one else can dispute nor challenge the authenticity of the asset since it’s logged on an open ledger anyone on the network can access. NFT is the trend of the year, it is growing rapidly and may be the next billion-dollar market. According to analysts, the market cap of NFTs could increase to $470 million in 2021 from around $300 million in 2020. So what’s so worth mention about NFT?
In my opinion, born of NFT might solve a long last problem, the real ownership of asset dilemma. Back in the 14 to 17th centuries, there is a revolution of art, known as the renaissance, during that period of time, there is a lot of great art, masterpieces that drew by famous artists such as Leonardo Da Vinci, Michelangelo, etc. All the artwork, painting they left behind can easily cost million or billions of dollars, despite the high value it contains, the real problem is, if there are 2 paintings of “Mona Lisa”, how you identify which one is real?
By the traditional method, which is human identifying, is unreliable. There is no guarantee that what identifies is real, is real. Back to nowadays, Digitalisation is the most important change in 21st century, everything can go digital already go digital, or in the way going digital. Especially during this pandemic situation, it actually makes the digital booming go faster. According to some reliable sources, the global art market was valued at $50 billion U.S. dollars, but it is dropping due to covid-19. In contrast, digital sales of auction houses and art dealers actually go doubled, and no doubt that there will be more digital asset coming out in the internet. Imagine if 10% of the art go digital, that would be easily a billion-dollar market.
After talking so much about the history of NFT and how could it help to solve the real-world issue, let’s see what already exists in the market.
- Individual Website NFT.
These are some individual, stand-alone website
2. Marketplace like Opensea, Rarible, etc.
Trending NFT like Loot, Bored App Yacht Club, CryptoPunks, VeeFriends, Art Blocks, etc.
NFT market trend is changing very rapidly, so there might be changes of popularity when the time pass, it is just for reference to get us to understand more on the market.
Conclusion: It is inevitable trend about digitalisation. The pandemic situation that still raging around the world only make what already happening go even faster. But no doubt that there is bubble in the current NFT market, but just like any other new technology first launch, the Internet in the 2000s, Cryptocurrency in the 2010s. It is nature process, when the bubble burst, what survive will be the next giant which show its own value. The focus is about the advantage of NFT could solve, the technology behind all of these, and might take an important roles in metaverse, should worth to preserve.
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