Non-fungible tokens (NFTs) have become widely renowned for their store of value and provide artists with a new means of capitalizing on their work. While art has unique meanings for each individual, a unique piece of art was sold on the OpenSea marketplace during this year’s ongoing NFT craze.
A fart was sold on OpenSea by a Brooklyn film director, capitalizing on the growing demand for unique NFTs. Regardless of whether it was just a form of mockery and a way of cashing in, the seller took advantage of an opportunity many other NFT creators have used to create profit as prices for an NFT can reach preposterous sums. Alex Ramírez-Mallis’s fart NFT sold for $85, which perfectly summarizes the NFT craze.
The NFT Boom
Demand for NFTs has skyrocketed between 2020 and 2021, with Rarrible and Nifty Giveaway creating entire ecosystems for NFTs to flourish. OpenSea.io is another NFT marketplace that aims to compete with existing market makers. It positions itself as the “Amazon of NFT” and offers a wider digital asset spectrum with a much lower price.
OpenSea is currently the second-largest NFT marketplace by trading volume. Its application as a global digital market spiked some notable investors’ interest from outside the crypto space. The company raised $23 million in Series A funding led by a16z and is backed by the likes of serial entrepreneur Mark Cuban and Reddit’s CEO Alexis Ohanian.
While minting on Rarible can cost artists up to $600 to stake one digital asset, OpenSea has a much lower entry point for users. OpenSea’s value proposition is that it offers a multitude of digital assets, from art or collectibles, which are found on other platforms, to Ethereum wallet domains, and even digital land in a virtual world called Decentraland.
There are no gas fees for minting coins on OpenSea, creating more opportunities for the ecosystem to flourish into an NFT mammoth. However, as entry into NFT is made easy, this can add more fluff than quality artwork and create a bubble, which we are already experiencing, according to experts. Cryptokitties popularized NFTs in 2017, generating millions and bottlenecking the Ethereum network due to high demand. They created a foundational layer from which artists further expanded into new creative directions such as Cryptopunks.
On the Flipside
- Every bubble in crypto history has made cryptocurrencies stronger in the long run.
- Any daring innovation in the field of technology has changed the way users consume digital assets, and they don’t usually die out.
- The value of OpenSea could drastically decrease if the crypto market crashes and NFT interest decreases.
A Future Use For NFTs
The value of NFTs goes further than being collectible and creating fast profit from selective artwork. As the game Second Life proved, humans want to escape their own reality and use digitization for escapism. Although the virtual reality game closed in August 2020, other companies such as Facebook are creating similar games, and NFTs will play an important role.
NFTs have been around in games for a long time; however, without the implementation of blockchain technology, a digital asset wouldn’t entirely belong to the buyer. The company would still own the rights. That was the case with Fortnite, which generated $2.4 billion in 2018 from in-game cosmetics such as characters and skins, and it’s not the only company to profit from selling such digital assets.
As demand grows, so does the possibility of NFTs becoming much more than just collectibles. With the emergence of new digital worlds, such as Decentraland and Sandbox, creating an entire world built on blockchain, one can only wonder at the extent to which NFTs can be implemented in a new reality created by humans.
OpenSea’s vision of creating a global marketplace where you can sell anything from farts to digital land is rooted in humans’ natural desire to escape their problems. However, the eBay and Amazon of NFT is expected to sail through some rough water before it can truly become a global marketplace for the up-and-coming reality.