Currently, NFT is one of the hottest topics in the digital marketing niche. As a result, traders of digital assets are now more than ever familiar with the various features and benefits of the NFTs.
Selling NFTs such as digital arts and jpeg has been made easy by introducing platforms like OpenSea. These marketplaces create the best opportunities to buy and sell your assets legally and without stress.
Nevertheless, there have been recent issues and negative speculations about trading NFTs. Newbies find it challenging to market their assets, and old traders are not finding buying NFTs easy.
However, in this article, we will discuss the speculations and predictions of traders on the future of NFTs. Before we begin, let’s get a complete understanding of what NFTs are
About NFTs
Non-Fungible Tokens (NFTs) are cryptographic tokens with special and non-exchangeable units. This quality means that the tokens cannot be duplicated and dismantled as they are unique in composition.
A famous example of a digital currency with this feature is Bitcoin, which retains its unique unit nature.
Primarily, NFTs give you complete authority and ownership of digital assets. There are no two NFTs with the same features or designs- although they can be similar. However, each NFT file can only be available once in a particular quantity.
NFTs as a Financial Tool
NFTs and their owners have gained much prominence within a year of activity beyond expectations. These assets and the owners indeed took over the digital markets. In addition, most top organizations and businesses now consider NFTs as a way to secure financial support.
Sports, music, gaming, and even politics have all turned around with NFTs. Moreover, top manufacturing institutions, such as Coca Cola have heavily invested in NFT and its use for financial transactions. With every passing day, more and more people see economic reasons to join the NFTs industry.
Is NFT Technology A Bubble About to Burst?
Most new technologies often experience an upside-down phase. In this phase, the smooth path enjoyed at the start-up formation becomes rough, and the system fails. However, many people feel the case of NFTs is no different.
There are solid grounds why we believe that NFTs will not go through this phase. But, first, let’s see why some people consider the investment of NFTs as unreliable.
● Its Generation is Highly Energy-Intensive
Generating a single NFT requires both physical and electrical energy in large quantities. Ethereum supports most of the available NFTs. Therefore, there is a need to follow the proof of work, one of the most tedious crypto generating protocols. Many feel it will be impossible to keep up with this generation, and the popularity of NFTs will fade away.
● NFTs are not Solely for Investment.
As stated earlier in this article NFTs are solely made to ascertain digital ownership and not for investment. However, many have made speculations about its market value falling with time.
● Price Volatility
The prices of NFTs are highly volatile. Sudden changes often affect their prices massively. Therefore, traders who desire to use them as an investment may lose their finances.
Consequently, with a decrease in the value of NFTs, there is bound to be a decrease in demand, and NFTs will soon fade out.
However, let’s now consider why NFTs may survive an upside-down phase and continue for a long time.
● The NFTs Industry Fast Development
With every passing day, engaging in NFT trades becomes easier.
People now fully understand how the NFTs work and what they must do before actively investing.
Moreover, the creation of marketing platforms and the acceptance of several other niches have proved to be growing opportunities for NFT traders.
However, there are always new NFTs to explore at every point in time. Therefore, the NFT ecosystem offers traders a wide range of investment opportunities.
● Feasible Trends
There are now many organizations and niches that want to get involved with NFTs. Some of the various categories actively engaged in the NFT industry today are:
- Art and Crafts
- Lifestyle and Brands
- Movies
- Gaming
- Music and so much more
These organizations are ready to invest millions in technology. For example, a French company named Sorare gathered a whooping sum of $680 million for their proposed NFTs.
Other industries already connected with NFT technology, like Dapper Labs, raised $250 million with plans to raise more in the future.
Moreover, they also partner with top organizations to put support plans in place for the NFT technology.
Another significant niche with the interest of NFTs is in the gaming sector. Young people worldwide have long anticipated the gaming features offered by NFT technology.
The gaming sector has seen significant development by introducing NFT games where gamers can play to earn. Moreover, some old games now allow the use of NFTs on them. An example of Games with tremendous NFT contributions is Axie Infinity (AXS). The introduction of NFTs in this game has led to a massive increase in the company’s revenue.
As of May 2020, the company’s finances were up to $8 million, with a share price of about $0.12. However, In September 2021, AXS’s finance record skyrocketed to about $5.6 billion at times, with a share price of around $92.
Consequently, the example of Axie Infinity company is a clear indication that investment in NFT is a good decision. Additionally, other Games like Fortnite also show how NFT can influence the gaming sector positively.
The company has recorded billions of dollars in profits to indicate the economic benefits of NFTs in the gaming system. Moreover, NFTs technology has also led to the rapid growth of virtual reality. However, these reasons establish specific facts why NFTs are not bubbles about to burst.
Conclusion
Most people underestimate the future of NFT because they feel the tokens are not sustainable. They believe the token generation is complicated, their prices will soon drop, and they are not a good form of investment.
Nevertheless, the various innovations and benefits of NFTs have made many others think otherwise. Moreover, the recent involvement of NFTs in multiple niches such as Art and crafts, Music, and so much more help keep an optimistic view about them.
Consequently, this article has provided the risk associated with the NFT technology and why the speculations of NFTs failing soon is a fact. However, properly consider these NFT facts and their related benefits when involved in the industry.
