The digital assets ecosystem has reshaped the dynamic understanding of trading, purchasing, and reselling art, as the rise of blockchain technology and cryptocurrency has enjoyed soaring popularity in recent years.
With growing interest, Non Fungible Tokens (NFTs) have found themselves right at the center, echoing a new phase in web and internet evolution.
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Although with the premise of Web 3.0, the metaverse and related software developments, some NFT markets such as Axie Marketplace, Rarible, RealCollection, and SuperRare among others are somewhat omitted by retail traders, with the industry losing sight of what these specific platforms can do for the future of technological innovation.
The latest statistics revealed the trade volume of NFTs accounted for more than $24.9 billion in 2021, a jump from $95 million in 2020. More than 2.7 million active wallets were recorded last year, and already in January 2022, OpenSea, the world’s largest NFT marketplace, reported more than $4.8 billion worth of sales in the first month of the year.
Digital assets and collectibles on the NFT marketplace have gained a staggering amount of support in recent years, totaling more than $40 billion worth of sales in 2021, according to a Bloomberg report.
As the Non-Fungible Token marketplace is increasingly growing bigger, with collectibles minted on popular blockchain-based digital platforms, predictions currently indicate that the industry is set to surpass the traditional art and collectibles market in the coming years, as the industry experienced head blows during the pandemic in 2020.
With around $10 - $20 million worth of NFTs sold and traded each week, companies are adapting to the growing demand, looking to establish their dominance among first-generation blockchain tech developers.
Even with the growing popularity, leading blockchain giants such as Block Inc (NYSE:SQ) and Coinbase Global Inc (NASDAQ:COIN) have showcased how powerful the NFT ecosystem has become in such a short while.
Digital assets in terms of monetary value are perhaps among the few influences the market carries. When removing the cover, we are confronted by a complex industry layered with innovative software and technologies that are revolutionizing everything from healthcare, telecommunications, and cybersecurity.
NFT platforms have become known as a virtual showroom of digital art at their most basic form, but that’s now all changing.
With demand from retail traders and investors seeing a growing number of new NFT platforms coming to life, developers and software engineers are reshaping how we conduct online communication, transact and browse the internet.
Looking deeper, we see how NFT platforms have led developers to discover new forms of technology and commercial-grade software. Over time, we can perhaps expect these tools and features to be more distributed among various industries and sector-related platforms instead of solely being used to transact and protect digital assets.
- Improving Online Security
The transition into the digital workspace has left millions of workers and employers to rethink and restructure business models. With this came the age of digital and remote working, as the pandemic kick-started a generation of digital nomads working from anywhere in the world.
Even with easier access to information, and remote communication, the digital world is not perfect. Online security protocols have changed a lot since the start of the pandemic.
Rising cyber threats and ransomware attacks have started a new age of online security features that enables users and companies to better protect their data, information, and transaction information.
While digital artwork and trading remain a key of many NFT platforms, security has in recent times become a major priority for companies looking to curb the increasing threat of cyberattacks and hacking.
“We’re in the perfect space to develop security and reliability of large-sized original data, in particular intellectual property rights, digital art, or biometric data. Blockchain technology offers decentralized data encryption, and in real-world scenarios, such as that of RealCollection, we already see a solution-based approach that offers Identity Data Hub (IDH) storage/sharing protocols.” shares Lee Jung Ryun, CEO of IBCT, the development company of platform LEDGIS.
The growing network of users and buyers has led NFT platforms and blockchain-based technology firms to develop end-to-end encryption features that will enhance security protocols and assist with network-based storage and sharing solutions.
For security purposes, some companies utilize Decentralized Identifier or DID, and Identity Data Hub security helps improve loss prevention and provides better copyright protection for artists. More so, using end-to-end encryption in various networks allows for the use of blockchain-connected Secure DB, IPFS, and Cloud networks.
User-focused technology enables users to access better NFT processing, a block-producers ecosystem, valuable access to inter-blockchain communication, and a reward system that pays based on the number of token purchases.
In January 2022, a cyberattack on the well-known NFT marketplace, OpenSea, saw more than $1 million worth of digital assets stolen. The hackers were able to bypass a security flaw unknown to OpenSea developers.
Efforts by blockchain developers have led to the facilitation of better-decentralized data encryption, an environment in which one will be able to manage and control personal data easily.
With the emergence of Web 3.0, companies are placing a strong emphasis on improved security protocols that should be regularly updated and maintained. With these efforts, it’s not only NFT enthusiasts that will enjoy heightened security features but also the everyday online user.
- The Virtual World is Now More Probable
In 2021 nearly every person on the internet was reading something related to the metaverse. While at the time it seemed as if this idea of a highly technological virtual world was still years away - it sprung to life a lot quicker than one may have thought.
From the metaverse, digital assets such as NFTs, tokens, coins, and other cryptocurrencies, there’s a whole new world of ingenuity awaiting.
To better combine these efforts, some NFT markets are showcasing 3-D objects of contemporary digital pieces in the metaverse. Work on these bold projects incorporates artists, designers, and developers from different industries to combine their efforts, creating a digital gallery accessible by anyone on the metaverse.
NFT markets are a percentage that makes up the metaverse, but it creates new possibilities for individuals, artists, and high-end brands.
Utilizing the metaverse in its current capacity is an opportunity for NFT platforms to set up a virtual secondary market, allowing users and NFT collectors to resell previously purchased pieces, connect with other users and explore the potentials of the virtual world.
Ongoing efforts will assist companies in tapping into new markets of potential clients, helping them establish their presence as the market becomes more mainstream.
There is, of course, still a lot that needs to be understood about the metaverse, with the development of VFX and VR/AR experiences still in their infancy. Currently, NFT platforms are more focused on bringing a host of next-generation NFT collectibles to users, as market demand has steadily increased.
- The Premise of Digital Currency
Yes, digital currency is now bigger than ever, and the current crypto market cap is worth more than $1,7 trillion. To put that in perspective, that’s around the same as Canada’s Gross Domestic Product (GDP) as of 2020 according to the World Bank.
Crypto has become a significant part of our financial and economic infrastructures, and removing it from the system will have dire effects that will be felt for decades. So while the influence thereof is only becoming more prevalent, creating alternative coins and tokens can be used to trade and purchase NFTs in the digital ecosystem.
More so, digital coins or currencies are not just being used for the purchasing of certain NFTs. It’s helping make digital transactions more secure, safer, and more streamlined, looking to work in a variety of industries, including healthcare, retail, hospitality, and tourism, among others.
While it may offer better decentralization for those who enjoy better autonomy, it’s not entirely without any risk, a worrying factor that’s still not yet been addressed. Digital coins are transforming the world of online payments and remittances, being more decentralized, adding to the benefits of autonomous transacting.
While we may be fascinated with the promises that the digital world can bring, we should consider how software and technology are now more interchangeable than what we could have imagined. There’s more to the world of virtual showrooms and digital NFTs. It’s creating solution-based innovation that will revolutionize the digital era.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.