Sales of Non Fungible Tokens, a type of digital certificate of authenticity for digital objects, are estimated to have brought in nearly $41 billion (€36 billion) last year. Market researcher Chainalysis, who specializes in blockchain, arrives at that amount. The unique codes, referred to as NFTs for short, have only been on the rise since the beginning of last year, but have already yielded millions at auctions.
An NFT is a non-exchangeable code secured by blockchain technology that indicates that its owner owns a digital object. In that form, the first message on the social medium Twitter was auctioned by founder Jack Dorsey for 2.9 million dollars (2.6 million euros), even though the message can easily be copied or retweeted. The first source code for the World Wide Web already yielded $5.4 million (4.8 million euros) and the first SMS ever got a new “owner” for 107,000 euros.
Chainalysis came to the billion dollar mark by looking at all transactions involving NFTs via the blockchain for the crypto currency Ethereum. This blockchain, a kind of decentralized order book that is updated everywhere at once, is also open to other cryptos and is by far the most popular network for trading NFTs.
Air bubble?
Because so much money is paid for pictures, videos or messages that can be copied endlessly, some critics call NFTs a bubble. But it also offers artists and creatives who mainly make digital creations an opportunity to earn some money from their work, say the proponents. The market for NFTs is therefore approaching the size of the market for physical art or antiques, according to Chainalysis’s estimates. According to research by art fair Art Basel and investment bank UBS, art and antiques were sold in 2020 for just over 50 billion dollars (44 billion euros), although the corona pandemic did have an impact on art fairs worldwide that year.
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