A new stage of development: how the NFT market will change in 2023

A new stage of development: how the NFT market will change in 2023

Author: Robert Strickland (crypto-journalist)

A new stage of development: how the NFT market will change in 2023

The first NFTs appeared back in 2017 and were released based on Ethereum smart contracts. By the end of the year, the online game CryptoKitties had become so popular that the Ethereum blockchain experienced serious difficulties in operation and there was an urgent need to scale it up. Another early project was CryptoPunks (10 thousand pixel character cards). Its sales exceeded $180 million.

But the popularity of NFT went away only in the spring of 2021 - then the artist Beeple sold at auction Christie's JPG file with its 5 thousand paintings, glued together in one image for a record price of $ 69 million. The collage entitled Everyday: The First 5000 Days included paintings by the artist, which he created every day for 13 years.

In 2021, the world's stars also looked at NFT, including the most popular musicians who released their songs in the form of NFT, as well as movie studios, which sold tokens tied to their pictures, and even billionaires. For example, Elon Musk produced an NFT track, tied it to a token, and sold it.

The popularity of non-interchangeable tokens continues to explode, with trading volumes running into the hundreds of millions of dollars, with NFT transactions reaching $1 billion back in June 2022. After that, there was a natural decline that lasted until January 2023. The decline in interest in NFT was caused by the decline in cryptocurrencies and the ongoing market correction. But all this time, the industry of non-interchangeable tokens continued to develop. And at the beginning of this year, digital assets began to rise in price again. Bitcoin showed a growth of 80%, its quotations exceeded $30 thousand again.

The market for NFT also returned to the upward trend - prices for tokens and the total volume of sold NFT units on specialized marketplaces increased again. The number of transactions in January reached 9.2 million. And these are only "clean" transactions, which are not suspected of fake sales to inflate the price of NFT or artificially create the appearance of excitement around a particular collection. In January, the ability to issue non-interchangeable tokens also appeared on the Bitcoin network, using the Ordinals protocol. The number of such NFTs has already exceeded 1 million.

The adherents of the mass appliance of the NFT technology are sure that as opposed to cryptocurrencies, the non-exchangeable tokens have much more ways of application in real life. For example, tickets to an event in the form of non-exchangeable tokens are already a reality. The main advantage of the technology is precisely that it allows fixing and transferring the ownership of various objects, for example, music, pictures, and even real estate. Another area of NFT development is the GameFi and meta worlds sector. They are taking the gaming industry to the next level.

Among the main NFT trends for the near future are the areas of music, games, meta universes, visual art, and artificial intelligence. It is important not to forget that such tokens are largely used as collectibles. For example, it could be a digital analog of a baseball card collection (there are already such projects and they are popular).

NFT also attracts the attention of large corporations. For example, Sony is working on using NFT in games, and Amazon has announced plans to launch an NFT marketplace. At the same time, such brands as McDonald's, Gucci, Louis Vuitton, Coca-Cola, and others have already released their own NFT collections in recent years.

However, the industry doesn't just live off the release of collectible tokens. NFTs are already finding very real uses. For example, users can install tokens as avatars on Twitter, last year it was reported about the plans to add such an option in Telegram, but at the moment, it has not been implemented. Pavel Durov's social network has already entered the industry in a different way - the platform Fragment sells user names in the form of NFT, which is used as short public links to accounts, channels, and chats in the messenger.

Last summer, Reddit launched its own NFT marketplace, which exceeded $12 million in sales by February of this year, while Amazon introduced a platform for trading non-interchangeable tokens in April 2023.

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