The surge in non-fungible tokens (NFTs) has been a sight as the market appears to be gaining more and more followers as the days go by. To put things in perspective, how much this space has grown Conservative estimates put the amount of money that has flowed into this rapidly developing sector to currently exceed $ 500 million.
Another way to measure the impact of NFTs on the global economy is to look at the wide variety of artists, celebrities, and musicians. â ???? Basically anyone at this point in timeâ ???? who have adopted this technology. For example, thrash metal pioneers Megadeth have recently become one of the newest users of NFTs, allowing fans to purchase unique collectibles that are officially endorsed by the band. This shows the reach of this technology almost overnight.
Likewise, What makes NFTs so unique is the fact that they cannot be exchanged for other tokens. This contradicts both the operation of most fiat assets – for example, a US dollar can be exchanged for a variety of goods – as well as the operation of most cryptocurrencies, such as Bitcoin (BTC) and Ether (ETH).
Because of this unique ability of you to NFTs can serve as excellent property rightsso that individuals can seamlessly purchase a wide variety of things ranging from digital art to music to real estate.
NFTs need a more decentralized environment to be successful
As the market for non-fungible tokens continues to prosper, it stands to reason that more and more people will move to using highly decentralized blockchains that offer their users a high level of data transparency and flexibility when it comes to NFT tradingespecially when compared to centralized solutions like Rarible, OpenSea, Binance NFT etc.
Today there are blockchains based on Byzantine Fault Tolerance (BFT) clusters specifically designed for NFT’s database management tasks.. A decentralized database can provide users with optimized access to a data delivery network that provides high levels of protection against data breaches, network outages, and performance issues that severely affect the global NFT ecosystem.
From a technical point of view, it should be noted that Although most of today’s NFTs were built on the Ethereum network, the ecosystem is currently facing some serious congestion issues as well as issues related to high gas prices.. It was recently reported that the average price for facilitating a transaction on the Ethereum network (between late February and March) ranged from $ 16 to $ 20.
Finally, it should be noted that although most developers still rely on centralized databases (like those from Amazon Web Services and Microsoft), the truth is that These databases represent a central point of failure and are therefore susceptible to various attacks and threats from third parties.
The future looks bright for NFTs
With the daily entry of larger amounts of money – whether individual or institutional – into the NFT market, many experts believe that this space will quickly turn into a multi-billion dollar industry, whose use cases will extend well beyond the realm of art and music ownership.
Likewise, it stands to reason that in the future we can see how NFTs are used for a wide variety of everyday payments / transactions â ???? How to buy clothes, shop in supermarkets, etc.â ???? as these tokens have the innate ability to associate a person’s identity with the items purchasedwhich makes product exchanges and refunds easier.
As the COVID-19 pandemic continues to rage across the world, many governments are already promoting the use of contactless technologies within their borders. This could be another reason that the adoption of NFT could increase significantly in the coming months and years.
In order to finally document the meteoric rise of these digital offerings, we can see that many prominent NFT markets have seen record trading volumes recently. For example, OpenSea’s cash inflow and outflow has increased 1,400% year-to-date, while Rarible’s total trading volume has increased 634% in the past two months.
This article does not provide investment advice or recommendations. All investing and trading involves risk and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
Pavel Bains is the CEO of Bluzelle, the decentralized database for the new Internet. Pavel is a digital media expert and has worked with Disney, Microsoft, Warners Bros and DreamWorks. Pavel also writes regularly for Forbes, Huffington Post, and Fast Company, and writes articles in the fields of finance and digital media. He was named a technology pioneer by the World Economic Forum.