The NFT Craze: Breakthroughs of Blockchain Technology

In the blockchain field, there is a keyword each year to summarize the hot topics and trends of that year. 2017 was the year of ICO, 2019 was the year of IEO, 2020 was the year of DeFi, and 2021 is undoubtedly the era of NFT.

The popularity of NFTs is remarkable. In 2019, a limited edition pair of socks was initially priced at $12, and by 2021, it had been speculated to $160,000. A GIF meme of a rainbow cat made into an NFT sold for a high price of $580,000 ten years ago.

The first tweet of Twitter's founder was made into an NFT, and the bidding once reached $2.5 million. On the NBA Top Shot platform, a dunk animation of James sold for as much as $208,000. According to statistics, the NFT market transaction volume exceeded $340 million in February 2021, setting a historical record.

The popularity of NFTs continues to rise, expanding from the cryptocurrency sphere to multiple fields such as sports, art, and gaming. According to search data, the popularity of NFTs has surpassed that of DeFi and Ethereum for the first time. NFTs are experiencing a spring of explosive growth, unexpectedly bringing blockchain technology out of its niche and attracting a large number of ordinary users' attention.

What is the charm of NFT?

NFT stands for Non-Fungible Token, which is a non-interchangeable token. Unlike fungible tokens like Bitcoin, each NFT is unique, non-interchangeable, and indivisible. This allows it to represent unique digital assets, such as rare tweets, video clips, artworks, and more.

The uniqueness of NFTs and their characteristics stored on the Blockchain make them verifiable digital assets. This solves the problem of digital files being infinitely reproducible, endowing digital assets with scarcity and ownership.

For ordinary users, NFTs are easier to understand and accept than complex blockchain concepts. People can create NFTs of their favorite basketball, games, artworks, etc., to circulate in the digital world. This greatly broadens the channels for wealth acquisition and stimulates the creative enthusiasm across various industries.

Why did NFT explode in 2021?

Although NFTs were born in 2017, they didn't truly explode in popularity until 2021, mainly for the following reasons:

1. The development of trading platforms has made NFT trading more convenient.
2. The cryptocurrency bull market drives an investment frenzy
3. During the pandemic, people's demand for digital assets increased.
4. NFTs and physical collectibles are gaining more attention
5. The celebrity effect promotes the further popularization of NFTs

The deeper reason is that human society is undergoing a digital transformation. We are increasingly living in a digital world, and NFTs meet the demand for people to own and showcase unique items in the digital realm.

How to Participate in the NFT Boom?

Ordinary investors can participate in NFT in two ways:

1. Invest in cryptocurrencies related to the NFT concept, such as ENJ, FLOW, CHZ, etc.
2. Directly purchase specific NFT items, such as CryptoPunks, NBA Top Shot cards, and crypto artworks.

Compared to cryptocurrencies, the liquidity of NFT products is relatively low and requires time to solidify value. It is recommended to invest in well-known and liquid major IP works.

Future Trends of NFT

NFT is quietly changing the way we interact with digital assets. It provides new monetization channels for artists and creators, and also gives ordinary people the opportunity to have partial ownership of rare assets.

NFT breaks the limitations of the physical world, allowing assets to be atomized and traded in a divisible manner. Although it is still in the early stages, NFTs represent a completely new form of assets, with vast potential for future development.

Like other emerging technologies, the value of NFTs needs time for verification. However, it is undeniable that NFTs are bringing revolutionary changes to the digital world, and we should continue to pay attention to their development.