The NFT Economy - Hype or Real?

The NFT Economy

Since the appearance of the first NFT in 2017, the market for digital assets has grown exponentially. A big contributing factor was the release of the ERC721 token standard in 2018. This standard provided the basic functionality to track and transfer NFTs. This spurred on a growth in NFT tech, giving developers the tools to develop products easily.  

The NFT market has continued to make unprecedented growth with reports showing up to 2100% where more than $2 billion was spent on NFT collectibles in the first three months of 2021.

Our viewpoint may be a little biased on the future of NFTs, but the Beeple story is becoming less of an anomaly. Just last week, a CryptoPunk character dubbed Covid Alien was sold for $11.7 million in a Sotheby’s auction. The buyer was a billionaire and venture capitalist, Shalom Meckenzie.

Maybe we are onto something here...

Related: New to NFTs? Get a quick-and-easy introduction to what NFTs are, in this blog post.

Which NFTs are Selling

Over the past few years, cryptocurrencies have gone from a little-understood rumour to a normal part of our lives. This is partly because we’re learning more about how the blockchains they’re built on work, so we can use them in different ways and more efficiently than ever before.

But with all the hype around it, identifying which NFTs are selling and why can be a difficult question. In theory, any digital art could be sold as an NFT and provide valuable proof of ownership and copyright. But when everything from tweets to slam dunks have entered the market, it becomes harder to tell whether you’re looking at a masterpiece or are one purchase away from a huge waste of money.

Beeple (the creator of the record-breaking NFT) is a talented digital artist, and the first tweet ever is a souvenir of a historic moment that marked the disruption of the online space as we know it today.

Similarly, when we did our research and examined a list of the most valuable NFTs sold, we only saw one artist with a traditional art background. Most of the artists have a background in digital art and the work itself is innovative and disruptive — representing the futuristic NFT metaverse that it sits within.

A prime example would be Don Diablo’s DΞSTINATION HΞXAGONIA. The NFT unlocks a 1-hour immersive music video. It was created exclusively for a SuperRare auction and filmed over a year with 3D-rendered characters and sets, all within Diablo’s sci-fi aesthetic.

These are the NFT pioneers but as NFTs become more popular, we’re going to start seeing all forms of content minted, sold and traded.

On Momint, we’ve seen a variety of ways in which our creators are making use of the NFT mechanic. ConnectedTheCoast NFTs unlock VR experiences, the Beertimes NFT came with a case of special craft beer. We’ve also had a famous SA Rugby player, Bryan Habana raise money for charity by creating a limited edition NFT. The owner received a signed pair of boots.

A Way to Fuel the Arts?

The market value of a work of art — NFT or otherwise — is based on what people are willing to pay for it. While skill does come into it, it’s still tightly linked to supply and demand — more popular artists and their work often command higher prices while equally talented but lesser-known artists struggle to survive. Because taste, trends and popularity are all subjective they’re also open to manipulation.

So why not bypass the hype, invest in art you like and support creators you believe in? In theory, if they do good work and share it, more and more people will hear about them, support them and drive their prices up. They’ll be encouraged to create more and you’ll have an NFT in your collection that increases in value. And if it doesn’t, then at least you’ll have exclusive rights to a high-quality piece of digital art that you absolutely love.

Buying an NFT on Momint is the perfect way to start — our collectors don’t need to empty their bank accounts to support excellent artists or own high-quality pieces which may increase in value. It could cost you the same as a cup of coffee, or even be free. Now that’s a good investment!

‍We hope you found this article helpful! We’re going to keep on creating short content about NFTs, blockchain technology and digital art. If you have any questions or if you would like to watch/read something related to these topics, then email us at help@momint.so‍‍