Bitcoin may be a point of reference when it comes to cryptocurrencies. It holds 41% of the total capitalization of cryptocurrencies that has now reached 2.3 trillion as Bitcoin value is very close to one trillion dollars. But Bitcoin is not alone. The second-largest cryptocurrency based on capitalization, Ethereum (ETH) has approached 460 billion dollars or 20% of the total value of the cryptocurrency market as has made significant gains since last July where its price has risen significantly, close to 100%.
Looking at the reasons for the significant increase in the price of Ethereum, it seems that the growing demand for NFTs may play a key role in this increase. NFTs are the acronym for Non-fungible tokens. These are unique, irreplaceable, rare, easily identifiable digital objects protected by cryptography, with digital representations of real-world objects such as art, music, objects, and video game. They are bought and sold online, often with cryptocurrency, and are generally encrypted with the same underlying software as cryptocurrencies. The idea with NFTs is that each is a unique, irreplaceable, or rare asset, thus highlighting the concept of a rarity in the digital world.
NFTs are not located on a computer or server. They are kept at the owner’s personal blockchain address, which is controlled with a private key. NFTs which are based on Ethereum, and the OpenSea platform have recorded a huge increase in demand, as the value of trading volume exceeded $ 3 billion in August.
This seems not to happen by accident. NFTs have already impacted digital art by unlocking a direct revenue-generating mechanism for creators. Artists can not only publish digital representations of their work but can directly sell their creations in global art markets. The OpenSea marketplace has the most, but there are also specialized parts, e.g., for a specific art form.
The NFTs’ turnover has skyrocketed this year as NFTs are becoming a tool for publishing, monitoring, and monetizing, from almost any creative endeavor since NFTs are the decentralized, digital version of certifying the authenticity of a physical object. A property rights digitization mechanism that identifies an object or property title. Ultimately, it is an entire ecosystem of digital representation and asset ownership.
All these are suggesting that NFTs may still be far from seeing their full potential. NFTs are then likely to be used to represent the vast majority of the content that can be viewed, collected, or monetized on the Internet. It can be applied from music or digital concert tickets to real estate stocks and insurance policies. It can literally be applied to everything, in a parallel economic universe, outside the traditional financial system.
The NFT space is still in its infancy and may be hiding amazing opportunities as NFTs may play an important role in the future of commerce. The applications seem to be endless. One can borrow an expensive item that generates value if used, and share the profits with the owner, or buy digital land and rent it to someone else. It is, therefore, possible that in the new digital world that has already been created, cryptocurrencies such as Ethereum, which is involved in this new world, might be boosted further by NFTs.