b. NFTs in the Web3
As we have seen previously, Web3 is taking us into a new era by creating a true model of ownership on the Internet, combining economics, technology, art and more. This new vision of the web is based on the development of new technologies, including the blockchain, with its accompanying possibilities: fungible tokens via crypto-currencies (Bitcoin, Ethereum, etc.), decentralized finance, Metavers, and NFTs (Non-fungible tokens) in particular.
An NFT is a cryptographic token stored on a blockchain. It is mostly in the form of a picture or a video. Unlike basic digital files (JPEG, JPG...) which are fungible, the NFT is non-fungible because it has a unique property registered in the large decentralized register that is the blockchain, which makes it possible to store and transmit information transparently, securely and without a central control body. By investing in an NFT, you acquire exclusive ownership of the work. As a result, you can use the certificate to prove that your work is unique and unforgeable. In particular, this technology creates digital rarity within the digital ecosystem. First created in 2014, NFTs have really hit the mainstream since 2017 and have seen a sharp increase in 2021.
Fungible: In common parlance, things are said to be fungible if they can be replaced by something similar. Among the examples often quoted, money is fungible. In other words, exchanging one euro coin for another one euro coin does not change anything overall.
In contrast, NFTs are Non-Fungible. In other words, it is unique and this uniqueness is easily identifiable thanks to the blockchain.
Over the past two years, the Non-Fungible Tokens (NFT) market has experienced a phenomenal explosion. For example, in 2021, the NFT market grew by 21,350%, with sales increasing from $94.9 million to $24.9 billion. This growth has continued, stabilizing sales at significant levels compared to previous years. As a result, as in the first May of 2022, more than $37 billion were sent to the NFT market.
First of all, it should be noted that any digital asset can become an NFT, i.e. artworks, tweets, GIFs, songs, video games or domain names. This ability to bring scarcity into the digital ecosystem, but also the diversity of possibilities it brings, has made the NFT ecosystem attractive to the world of sports, video games, fashion, but also to many artists, insiders and investors.
In the digital age, this market is expanding rapidly. This expansion can be explained by the soaring utilities and possibilities offered by NFT technology. Indeed, beyond being able to be digital works of art, NFTs can also and above all offer their holders numerous advantages in various fields:
- Authenticity & Certification (Match Ticket)
- Traceability (To avoid fashion counterfeiting)
- Digital rarity
- Collector's items
- Video games (owning unique items in a game)
In reality, there are as many use cases as there are areas of operation.
Any digital asset can thus become an NFT, and be used to indicate ownership of a digital object. These non-fungible tokens have changed markets around the world in many areas. Owning an NFT means owning a digital asset, but also much more, as we have just seen above. The sector continues to develop, and the number of utilities is increasing. It is notably via the latter that the adoption could be more and more important, within the crypto ecosystem, but also outside.