NFTs and Crypto Assets
By: Brian Vislar
(Credit: Nifty Museum)
One of the more interesting developments of 2021, was the rapid growth of NFTs (Non-Fungible Tokens) in the internet market. The non-fungible token (NFT) market consists of multiple online buyers and sellers of crypto art, gifs, and many more multimedia issues that are founded on the principles of blockchain technology. The growth of the NFTs has been part of the larger crypto-asset growth that began during the COVID-19 pandemic in early 2020. More recently in 2021, Bitcoin has continued this upward trajectory with the volatility that characterizes most cryptocurrencies. The growth of digital assets has been a trend in the past years that will have a lasting impact, especially given the increasing rates of inflation in the past few months.
NFTs comprise a multitude of multimedia art that according to David Hollerith (2021), “They [NFTs] can be packaged as digital collectibles, works of art, music, video game items, real estate of virtual reality platforms, and even concert tickets” (para. 2). A more prominent line of NFTs has been the “Bored Ape”, which has sold multiple NFTS worth thousands of dollars. This crypto market has ballooned to be worth over 27 billion US dollars over the past few months. Blockchain comprises a decentralized validation method known as “proof-of-work”, which verifies each unique user and grants access to participate in the crypto process. An understanding of NFTs requires a critical understanding of “proof-of-work” as a method of decentralizing authority in the marketplace. “Proof-of-work” facilitated the exchange mechanism of crypto-assets and according to the Ethereum Whitepaper (2013), “First, it provided a simple and moderately effective consensus algorithm, allowing nodes in the network to collectively agree on a set of canonical updates…provided a mechanism for allowing free entry into the consensus process” (para. 3). Additionally, many major companies are recognizing the benefits of NFTs and their popularity, such as Mark Zuckerberg’s “Metaverse” and Nike’s recent purchase of a virtual shoe company. According to Richard Lawler (2021) who reported on the acquisition of RTFKT Studios by Nike said about NFTs, “Metamask wallets, which is one of the ways NFT owners can verify their purchases, with the idea that at some point in the future you’ll play games or enter other sorts of VR spaces where your items can materialize'' (para. 4). Furthermore, it appears that many companies are actively participating, such as Macy’s in the trend towards cryptocurrencies and NFTs. This implies a future cyber-punk economic reality. In the not-so-distant future, we will see the NFTs shift from currently being abstract, art, and intangible assets to materializing into a tangible asset that we will be able to use in the “Metaverse” or any virtual reality world. Many in the NFT virtual world claim that the new technology will pave the way for development in the economic sphere of a new future. According to The Artnet NFT 30 (2021), “And it is absolutely vital for anyone interested in engaging with the NFT phenomenon to understand that history—because it’s the only way to see through the fog of volatility, astounding numbers, whipsawing cryptocurrency valuations, technical jargon, and ostensible silliness of much of the current moment and glimpse the radical future ahead” (p. 3).
The rise of NFTs poses greater questions about where the state of currencies and assets will take us in the coming years. This is especially true, given the recent unveiling of Mark Zuckerberg’s “Metaverse,” but also larger players involved in crypto-assets and NFTs. As the crypto asset market continues to grow, we will have to reevaluate the impact of such technology: environmental and the economic consequences of a decentralized currency and NFTs.
Citations
https://www.theverge.com/22833369/nike-rtfkt-nft-sneaker-shoe-metaverse-company
https://ethereum.org/en/whitepaper/
https://finance.yahoo.com/news/nft-market-explodes-into-27-b-phenomenon-as-investors-with-bigger-bags-put-them-to-work-133112238.html
https://media.artnet.com/image/upload/v1639499700/2021/12/THE_ARTNET_NFT_30_qdfyc4.pdf
One of the more interesting developments of 2021, was the rapid growth of NFTs (Non-Fungible Tokens) in the internet market. The non-fungible token (NFT) market consists of multiple online buyers and sellers of crypto art, gifs, and many more multimedia issues that are founded on the principles of blockchain technology. The growth of the NFTs has been part of the larger crypto-asset growth that began during the COVID-19 pandemic in early 2020. More recently in 2021, Bitcoin has continued this upward trajectory with the volatility that characterizes most cryptocurrencies. The growth of digital assets has been a trend in the past years that will have a lasting impact, especially given the increasing rates of inflation in the past few months.
NFTs comprise a multitude of multimedia art that according to David Hollerith (2021), “They [NFTs] can be packaged as digital collectibles, works of art, music, video game items, real estate of virtual reality platforms, and even concert tickets” (para. 2). A more prominent line of NFTs has been the “Bored Ape”, which has sold multiple NFTS worth thousands of dollars. This crypto market has ballooned to be worth over 27 billion US dollars over the past few months. Blockchain comprises a decentralized validation method known as “proof-of-work”, which verifies each unique user and grants access to participate in the crypto process. An understanding of NFTs requires a critical understanding of “proof-of-work” as a method of decentralizing authority in the marketplace. “Proof-of-work” facilitated the exchange mechanism of crypto-assets and according to the Ethereum Whitepaper (2013), “First, it provided a simple and moderately effective consensus algorithm, allowing nodes in the network to collectively agree on a set of canonical updates…provided a mechanism for allowing free entry into the consensus process” (para. 3). Additionally, many major companies are recognizing the benefits of NFTs and their popularity, such as Mark Zuckerberg’s “Metaverse” and Nike’s recent purchase of a virtual shoe company. According to Richard Lawler (2021) who reported on the acquisition of RTFKT Studios by Nike said about NFTs, “Metamask wallets, which is one of the ways NFT owners can verify their purchases, with the idea that at some point in the future you’ll play games or enter other sorts of VR spaces where your items can materialize'' (para. 4). Furthermore, it appears that many companies are actively participating, such as Macy’s in the trend towards cryptocurrencies and NFTs. This implies a future cyber-punk economic reality. In the not-so-distant future, we will see the NFTs shift from currently being abstract, art, and intangible assets to materializing into a tangible asset that we will be able to use in the “Metaverse” or any virtual reality world. Many in the NFT virtual world claim that the new technology will pave the way for development in the economic sphere of a new future. According to The Artnet NFT 30 (2021), “And it is absolutely vital for anyone interested in engaging with the NFT phenomenon to understand that history—because it’s the only way to see through the fog of volatility, astounding numbers, whipsawing cryptocurrency valuations, technical jargon, and ostensible silliness of much of the current moment and glimpse the radical future ahead” (p. 3).
The rise of NFTs poses greater questions about where the state of currencies and assets will take us in the coming years. This is especially true, given the recent unveiling of Mark Zuckerberg’s “Metaverse,” but also larger players involved in crypto-assets and NFTs. As the crypto asset market continues to grow, we will have to reevaluate the impact of such technology: environmental and the economic consequences of a decentralized currency and NFTs.
Citations
https://www.theverge.com/22833369/nike-rtfkt-nft-sneaker-shoe-metaverse-company
https://ethereum.org/en/whitepaper/
https://finance.yahoo.com/news/nft-market-explodes-into-27-b-phenomenon-as-investors-with-bigger-bags-put-them-to-work-133112238.html
https://media.artnet.com/image/upload/v1639499700/2021/12/THE_ARTNET_NFT_30_qdfyc4.pdf
