The Inception of Digital Assets and Growth of NFTs
NFTs arrived with a bang in India and they are here to stay as NFTs continues its rise to become a global phenomenon.
By Saptak Bardhan December 29, 2021
Opinions expressed by Entrepreneur contributors are their own.
We are living in a completely different world, one that has been ravaged by the pandemic for more than two years, a world that is technologically more advanced, a world where technology has played a huge part in our lives and we are inclined to use technology for various purposes. The start-up ecosystem has bloomed extremely well during the pandemic. There is a new phenomenon in the market that has made quite an impact in the short period it has existed. Non-fungible tokens or popularly known as NFTs are the talk of the town. NFTs are digital assets being stored on a blockchain. A digital asset means it can be anything ranging from an image to a video or an animation or a single-pixel or even a tweet for that matter. Since the item is non-fungible it means that it is one-of-a-kind. There is only one Mona Lisa. One cannot trade the portrait of the Mona Lisa and get back the same portrait. What he/she will receive will be completely different from the item he/she traded. The same principle is applied to NFTs. The NFT in context is one of its kinds like the first tweet of Twitter or the video by Beeple. The person purchasing the NFT has ownership of the asset. The ownership is marked on a digital ledger called Blockchain. The Blockchain network that is backing the NFT marketplace records the transaction and since it is a public platform, it provides transparency of the sale.
“Digital ownership has brought with it tokenization, enabling brands and creators to offer exclusive & curated services to their communities, which in turn has led to an exponential growth in engagement & monetization,” says Praphul Chandra, CEO, and Founder, KoineArth. A colored coin on the Bitcoin Blockchain was the inception of the idea of NFT. Colored coins were tokens that represented any real-world asset that vary from a car to equities or bonds. Counterparty came along in 2014 which was a peer-to-peer financial platform that allowed asset creation and has a decentralized exchange which provided a way for users to make their tradable currencies. Counterparty became a platform for trading cards and memes. Force of Will trading cards became popular on counterparty so did the meme frog called “Rare Pepe”. As Rare Pepe trading started gathering pace, Matt Hall and John Watkinson who are the creators of Larva Labs created unique characters that were being generated on the Ethereum blockchain. The project was named “Cryptopunks” and no two characters looked alike. It was a hybrid of the ERC721 and ERC20 token standards. Post this, Cryptokitties entered the market which led to the boom in the NFT market. Cryptokitties were using ERC721 as it was a blockchain-based virtual game that would allow the players to adopt, breed, and trade virtual cats using Ethereum. The company that was responsible for Cryptokitties, Axiom Zen went viral as the company spun off Cryptokitties into Dapper Labs. 2018-2021 has been the period of NFTs growing exponentially as they slowly moved into public awareness which led to mainstream adoption.
Growing in popularity all through the years under the radar, NFTs took the crypto community by surprise and by storm as there was a slow transition in mainstream art. Artist Kevin Abosch partnered with GIFTO for a charity auction for a piece of Crypto art called “Forever Rose” in 2018. This partnership raised $1 Million for the art. The first-ever NFT is believed to be created by Kevin McCoy in 2014 called “Quantum”. The NFTs can be copied just like anything digital. However, there will only be one person with the ownership of that particular asset and can sell it to someone else in exchange for crypto coins or something else. If another person tries to sell a counterfeit of the original artwork/NFT, then the individual gets flagged by the NFT community. However, NFT marketplaces have their safety and security measures in-built so that the sale of counterfeits can be stopped for good.” A thumb rule to understand the difference between an authentic & a fake NFT is that if a rare NFT is priced at a comparatively cheaper rate than what it’s supposed to be, there is a massive chance of it being a fake because the price of NFTs is determined on supply and demand rule. The rarer it’ll be higher would be its pricing tag” says Arun Pandey, Co-founder, Beyondlife.club. The recent phenomenon has made an instant impact on India as a whole with recently Bollywood Megastar Amitabh Bachchan becoming the first actor to roll out his NFT collection on Beyondlife.club. “Technology has always fascinated me & the arrival of NFTs has opened the doors to a new realm of connectivity and an opportunity of engagement for me with my fans on a whole new level. My Fans are an integral part of my journey & through the platform Beyondlife.club, I can help them get access to some of the most cherished moments & memorabilia from this beautiful journey of mine.”
Actors like Kamal Hassan and Salman Khan are also joining the bandwagon as the major companies have also started to roll out NFTs. Facebook, Nike, NBA, WWE, Twitter are a few of the many organizations that have decided to roll out NFTs. NBA is selling videos of its most memorable moments as NFTs. Global stars like Lionel Messi, Gareth Bale have also joined the bandwagon amongst the other prominent sports personalities. As NFTs grow in stature and are growing in popularity in all niches, it has appealed to fans, teams, etc. “NFTs have become a great way for individuals and businesses to capitalize on unique assets, engage fans, and potentially generate revenue while staying ahead of the curve and keeping pace with innovations in commerce.
NFTs have managed to penetrate all the sectors and all the fields which have made it more appealing for audiences worldwide. There have been notable changes with cryptocurrency and NFTs that are forthcoming as everything has gone digital and everything is just a click away. The adoption of cryptocurrency all around the globe has played a major role in the exponential growth of Blockchain technology. NFTs are being looked upon as an opportunity to monetize art for creators as well as a medium to connect to their fans whereas the collector sees it as a way of attaining bragging rights by securing ownership of apran authenticated artwork bought directly from the artist or the creator which in turn has led to an exponential growth in engagement as well as monetization which is why the market has been pumped with the arrival of Non-fungible tokens. New NFT marketplaces are bound to come with WazirX, Beyondlife.Club, BollyCoin are some of them.
NFTs have created their own market and are now impossible to ignore. Digital art, music collectibles have paved the way for creators to capitalize on the opportunities as well as grow their portfolios. As the NFT fraternity does not discriminate between upcoming creators and established creators, it gives equal opportunity to both. Today, a digital creator would sell his work as an NFT rather than selling it as a GIF or maybe even a sticker. India is a new market for the NFT. However, the impact the NFTs have made has been more than what was expected from it. NFTs are being looked like the next big thing in the digital world and it might as well be true with the craze that it has attracted. “The global interest in NFTs has been on a steep rise over the past year. The global NFT market has a market capitalization of $43.08bn as of October 25, 2021. Its trading volume is around $3.6bn” says Vishakha Singh, VP, and Co-founder, WazirX NFT Marketplace. The NFTs have been hitting the $150 Million on the OpenSea NFT Marketplace which sells on the Ethereum Blockchain. NFT sales also hit a major high when it hit a record volume of 1.24 Billion in Q2 of 2021. India is relatively new to the market hence it will take some time for the NFT to make its place but the association of NFT with celebrities has already hyped it up and it is a matter of time that Indian people will adopt NFTs in the mainstream much like the entire world.