Does NFT have a future? NFT’s features and future prospects explained in detail!

Many people are interested in NFTs, which have become a hot topic in recent years, as they were nominated for a buzzword award late last year.

NFT is an abbreviation for non-substitutable token, which is a non-substitutable digital token that records data on the blockchain to give unique value to digital assets such as art, music, videos, game items, etc. that remain unique and cannot be replaced. It has attracted attention in recent years as a field that creates new trading markets and businesses by building its own network and using blockchain technology.

But will NFTs end up being just another boom? Is it worth paying money to own? Many people think so.

In this article, we will discuss whether NFT has a future? We will explain why it can retain its value.

Three features of NFT

Currently, it is possible to store photo data and other data on the Web without permission, and copyrights are virtually nonexistent.

However, NFT’s entry into the market has made the following three features possible. We will explain them below.

Programmability

Programmability in NFTs means that various transaction rules can be programmed into certificates on the blockchain; the seller (author) of an NFT can also determine the commission for secondary distribution and receive it even if it is distributed secondarily years later.

This programmability system allows the seller (author) to program not only the primary transaction between the seller and buyer, but also the commission and the volume of transactions during secondary distribution.

By utilizing the programmability system, it is possible to create a mechanism on the blockchain such that “a portion of the purchase price is transferred to the author at the time of distribution” even if the NFT leaves the author’s possession.

In the case of conventional art, there have been cases in which a work of art has been recognized after the artist’s death, and the work has been sold at a high price. In addition, there have been cases in which a famous artist has asked an appraiser to verify the authenticity of a work of art.

By using the NFT blockchain as a proof of authenticity, it is possible to continue receiving royalties even after the death of the artist.

As for authenticity, it is easy to determine the authenticity of an item since the history of the item is recorded on the blockchain.

The use of programmability will be of great benefit to artists and creators because it will eliminate the organizations and corporations that have been managing and exploiting them in the middle.

Tradability

Because NFTs have clearly stated ownership on a decentralized blockchain, NFTs can be held without being controlled by a specific service vendor.

Blockchain technology allows NFTs to have clear ownership and to be transacted with each other; it allows NFTs to be unique, making valuable NFTs an asset as well.

In addition, transactions can be highly secure because the transaction details are publicly available on the blockchain and can be verified by anyone. The data itself will be stored outside the blockchain due to data capacity limitations.

Interoperability

In the case of traditional platforms, digital content becomes unavailable once the service of the platform from which it was purchased is discontinued. In the case of smartphone games, for example, it is no longer possible to continue to own items and characters in the game if the service is terminated by the provider.

On the other hand, NFTs can be issued and distributed under a common standard called the network chain, making it technically possible to use digital content across multiple platforms. However, use across multiple platforms assumes that the format of the content itself (music, video, 3D data, and other file formats) will work on each platform.

In order to enable use across all platforms in the future, it is desirable to standardize the network chain and standardize each type of content.

Why do you see a future for NFT?

We have explained the three characteristics of NFTs, but why do we think there is potential in the NFT market? I will explain from three main perspectives.

Potential for value to increase as an art investment

From NFT, digital art composed of manga manuscripts by Osamu Tezuka, a master of the manga world.

Even NFT art, which is a digital asset, can increase in value due to the name recognition of the artist who created it and its rarity. It is still fresh in our minds that the mosaic art NFT “Astro Boy” sold for 120 Ethereum (approximately 56 million yen) in an auction held on the NFT marketplace OpenSea until December 18, 2021, setting a record for the highest bid for an NFT from Japan.

As an advantage for artists, they can prove that the work they designed is genuine by linking their blockchain address to it.

As a buyer, you can satisfy your own needs by owning a rare artist or an NFT work with a small number of copies issued. The rarity of the piece, coupled with the expectation that owning it will increase the value of the asset.

Possible risks of owning actual paintings and other objects include physical damage, such as damage or loss due to natural disasters or accidents. Antique pieces of value are damaged and lost in disasters such as fire or earthquakes. From a conventional perspective, if you purchase a highly valuable contemporary artwork, but it is incinerated, lost, or stolen, the value of the asset will not remain in your possession unless you have insurance.

However, since NFT is digital data, there is no need to worry about it being physically damaged. This is an advantage of NFTs compared to physical assets.

Furthermore, if the value of the asset remains after several decades and can be held by one’s children and grandchildren, people’s desire to own NFT art is likely to be even stronger.

The NFT market continues to expand

Market expansion is essential to the future of NFTs. take OpenSea, the world’s largest NFT market, for example, which in March 2020 was earning only $28,000 per month in commissions, thanks in part to OpenSea’s corporate efforts. By September 2020, sales had doubled.

And the company’s sales reached an all-time high of $3.4 billion in August 2021, generating $85 million in commission income.

In January 2022, the company announced that it had succeeded in raising $300 million (about 35 billion yen) in funding and that its enterprise value in the marketplace (electronic marketplace) reached $13.3 billion (about 1.5 trillion yen), and the NFT market is expected to develop further in the future.

The number of objects that can be traded as NFTs is also increasing.

In addition, while artwork was originally the target of the NFT trade, other types of NFTs have increased as the market has grown, including videos and artists’ music NFTs that enthusiasts would enjoy owning, and NFTs of photos that were buzzed about on social networking sites and tweeted about on Twitter for the first time.

Particularly growing in the NFT market are those with gaming uses, such as Land in Sandbox, AXIE, the AxieInfinity monster, and sneaker NFTs used in Stepn.

NFTs used in games have asset value even after purchase. (In some cases, too many target NFTs on the market can lead to a drop in price.)

In any case, one of the attractions of NFTs is that you can participate in the game by owning them, not just as a mere possession or collector item.

It’s Not Too Late to Buy and Start NFT!

After reading the articles so far, I’m a little late to the party. I’m a little late to the game, but is it too late to get started? Some of you may be feeling that way.

However, new projects and platforms are popping up one after another. You never know when the NFT art you are interested in will go on sale. Let’s start by opening a crypto asset exchange to trade.

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Purchase virtual currency on a virtual currency exchange such as Coincheck

You will purchase ETH, which is required to purchase NFTs. For this purpose, we will open domestic crypto asset exchanges such as Coincheck, BitFlyer, GMO Coin, Rakuten Bitcoin, and DMM Bitcoin.

All exchanges can be opened in as little as one day from application.

Once the exchange has been opened, you will transfer the amount you specified to the bank account designated by the exchange. The minimum price varies from exchange to exchange, but it can be as low as 500 yen.

Once the deposit is completed, you can purchase ETH.

Another overseas exchange, ByBit, which supports Japanese yen, is also recommended due to its low purchase fees. Depending on the NFT you wish to purchase, some coins may not be sold on ETH but on the Solana or Binance networks, so you will need to check with an overseas exchange.

If you expect to convert back to Japanese yen in the future, you should open a domestic exchange.

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Transfer virtual currency to a wallet such as MetaMask

Once you have purchased ETH, we will transfer it to MetaMask, a software wallet that allows you to supplement and manage Ethereum-based blockchain currencies and NFTs (non-replaceable tokens) in bulk. There is a browser extension version and a mobile app version.

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We will transfer ETH from the exchange to your MetaMask wallet address.

It is best to send a small amount at first to avoid risk. Once you have confirmed that your MetaMask has received the first amount of funds, please transfer the rest.

Once you have deposited the ETH into your Metamask, it is time to purchase the NFT you like.

Purchase the NFT piece you want in the marketplace

Buy the NFT you are looking for. The world’s largest NFT marketplace is OpenSea, where it is relatively easy to list items for sale, but there is also a lot of high-priced NFT art.

OpenSea is a relatively easy place to list your work, and there are many high-priced NFT artworks. Other than that, there are many popular series such as CryptoPunks and BoredApe YachtClub. Other NFT markets include Rarible and SuperRare, and the NFT market is expanding.

You can also find other artists’ works that you are personally interested in on Twitter. Purchased works become assets and can be sent to your own Metamask.

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Summary of the Future of the NFT

Let us summarize.

  • NFTs can guarantee transactions and security through programmability, tradability, and interoperability. NFTs can be held for a long period of time without degradation because they are data.
  • The NFT market is still expanding since last year. If the market can hold rare and well-known artists’ works, the price can be expected to increase.
  • NFT is an opportunity to increase the value of your assets in a field that has only just begun. We should open a virtual currency exchange and introduce MetaMask so that we can immediately purchase the NFT works we want when they become available for sale.

That is all. Find and hold valuable NFTs as soon as possible and increase your assets.