The Growth of the NFT Market
NFT has scarcity and asset property. NFT becomes a digital collectible as it maps the data. As with traditional collectibles, people collect for passion, social needs, cultural identity and investment purposes. Collectors are often able to reach a consensus within the same culture circle and are willing to pay a lot more than what non-collectors can imagine for a rare collectible. This phenomenon is no news in many culture industries (e.g. fan economy and audiophiles), and the NFT crypto- collectibles market is no exception.
The biggest difference from traditional collectibles is that some NFT collectibles are multi-purpose. Firstly, in the context of games, an NFT is more than just a collectible. It can be used in the game and has value in the virtual world. Secondly, as blockchain data is transparent and reliable, different applications can work together to showcase NFT collectibles. For example, in the Cryptovoxels virtual world, users can showcase NFT artwork they own.
As of this March, 2021, the cumulative trading volume of NFT artworks reached $546 million with the total transaction count exceeding 190k. The NFT industry continued to thrive in Q1 2021, with significant growth in the number of transactions, 5 transaction volume, number of active wallets and number of traders compared to Q4 2020, including a 2,053% increase in transaction volume and a 129% increase in the number of traders.
At the same time, like DeFi, NFT has the potential to be Lego bricks, being able to combine with others in the ecosystem. In the world of blockchain, NFT can be combined with many elements, including lending and gaming. If we can tap into NFT's economic value, we can ensure its constant liquidity. In the real world, NFT can be combined with some physical assets, such as property, securities, insurance, etc. Not only that, NFT is also becoming more and more accessible, as a painting, graffiti or a toy can be an NFT. If these assets can be successfully “NFT-ed", the market expansion to come will be extraordinary.