The recognition of non-fungible tokens is exploding amid a looming bubble

  • A ten-second video recently sold for $ 6.6 million.
  • OpenSea, the sales volume of the NFT market, reached $ 86 million in February.
  • Investors expect a bubble once the pandemic pushes people to explore the digital realm.

Blockchain technology has changed the way the world works. This is reflected in the action of Miami-based art collector Pablo Rodriguez-Fraile. The art collector decided to do a ten-second video in October 2020. Little did he know, however, that the same video would gross him $ 6.6 million a few months later.

Investors diversify portfolios with NFT

The 10-second video is the original work by a digital artist named Beeple. The real name of the artist is Mike Winkelmann. What makes his video stand out is that it is authenticated by blockchain and provides a digital signature to identify the owner and prove that it is not fake.

At the same time, a non-fungible token (NFT) is a new digital asset that exists amid the global pandemic. With the Cryptoasset, investors and other enthusiasts can buy items that can only be found online. Blockchain technology signs the elements and confirms that they are the original versions and who they belong to at any given point in time. According to Rodriguez-Fraile:

You can go to the Louvre and take a picture of the Mona Lisa and you can have it there, but it’s of no value because it doesn’t have the provenance or history of the work.

The reality here is that this is very, very valuable because of who is behind it.

OpenSea is the official marketplace for NFTs. It brings together buyers and sellers of these online-based properties. Sales volume increased from $ 8 million to $ 86 million in less than 8 weeks. Despite the remarkable growth, investors are alarmed that a bubble is floating.

OpenSea sales volume

The rise of NFTs could also bode well for the cryptocurrency market and enable mainstream adoption. Note that Beeple’s ongoing digital art promotion ends on March 11th. Christie’s auction house accepts payments in Ethereum and fiat money.

CoinMarketCap describes NFT as “a special cryptographically generated token that uses blockchain technology to connect to a unique digital asset that cannot be replicated”. Some of the leading NFT tokens are Enjin Coin, Flow, and Decentraland.

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