The journey of NFTs has been nothing short of a whirlwind. The NFT boom began in 2021, coinciding with the iconic rise of the Bored Ape Yacht Club (BAYC). BAYC is an exclusive collection of digital art apes, doubling as an expensive virtual yacht club membership card. When NFTs were all the rage, snagging a BAYC NFT would set you back $400,000. However, following a period of massive hype, the NFT market crashed in 2022, driven by the fall of crypto and speculative trading.

Despite the slowdown, as we look into the current year, the narrative of NFTs is evolving. We're witnessing a potential comeback but with a broader scope beyond digital art. This comeback is characterized by deeper integration with a heightened focus on the practical utility of NFTs in various domains such as gaming, virtual real estate, and even identity verification and security. These developments hint at a more mature, utility-driven future for NFTs, suggesting a phase where they become more ingrained in our digital experiences and everyday lives

Could we see this new phase occur this year?

NFTs: past, present, and potential future

NFTs had their best year yet when the digital asset rose to prominence in 2021, with sales topping $23 billion in 2021 based on data published by DappRadar. Key drivers behind the rise were NFTs' potential to revolutionize ownership of art and digital collectibles, particularly attracting digital savvy consumers.

Some key milestones that marked the rise of NFTs included:

--- Beeple’s NFT artwork: In early 2021, the NFT world witnessed a historic moment that set the stage for the year's frenzy. Digital artist Beeple sold an NFT artwork called “Everydays: The First 5000 Days,” for $69 million at Christie's. This sale catapulted NFTs into the limelight, attracting global attention and signaling the potential of digital art in the blockchain era.

CryptoPunks: Launched in 2017, CryptoPunks is known to be one of the most iconic NFT projects. The digital collection consists of 10,000 unique, hand-drawn 24×24 pixel characters. When the project gained mass popularity, a single image of a pixilated character sold for a record price of $7.6 million in March 2021.

Snoop Dogg's venture into NFTs: In 2021, Snoop Dogg’s debut NFT collection was a key milestone in the industry. The "A Journey with the Dogg" collection featured unique digital artworks that took inspiration from his early years and life memories. A few months later, Snoop partnered with The Sandbox to launch ‘Snoopverse,’ a mini world on the metaverse platform with exclusive land and NFT bundles up for purchase.

--- Grimes NFT collection: At the peak of the NFT hype, musician Grimes also launched a series of 10 digital artworks inspired by her music. The auction of the NFT series on Nifty Gateway bagged $6 million.

----Intense media coverage: The media played a crucial role in the NFT boom of 2021. The phenomenon captivated Major news outlets worldwide, regularly featuring stories about record-breaking sales, the technology behind NFTs, and the emerging digital millionaires. According to a study by a professor at Vanderbilt’s Owen Graduate School of Management, out of the 26,000 NFT articles in their database, 3,000 were published in the first quarter of 2021 and 12,000 in the last quarter. This extensive coverage informed the public about the burgeoning NFT market and fueled its growth, attracting new creators, investors, and enthusiasts to this novel digital frontier.

Beyond Digital Art

NFTs are stepping out of the digital art scene and into diverse realms like music, gaming, and sports. Their unique features of authenticity and ownership are unlocking new ways for artists, gamers, and athletes to engage with fans. From exclusive music content to digital collectibles in sports, NFTs are redefining interaction and ownership in the digital age, showcasing their versatility across various industries.

Music :

NFTs are revolutionizing the music industry with their potential to open new revenue streams and ensure fair royalty distribution.

Imagine owning a special edition of your favorite album in physical form and as a digital collectible. Artists are releasing albums as NFTs, offering exclusive content and experiences. The rock band Kings of Leon's album "When You See Yourself" made headlines when they released their album as an NFT, a first for the industry. The NFT version offered special perks for NFT holders, like limited-edition vinyl and exclusive audiovisual art.

NFTs are also turning concert tickets into digital memorabilia. Fans can buy NFT tickets, including special perks like backstage passes or exclusive merchandise. Above all, NFTs are streamlining royalty payments, ensuring artists get their fair share every time their music is played or resold. Electronic music artist 3LAU sold NFT collections of his music, allowing him to receive royalties automatically every time a sale occurred. He later also introduced a new song, “Worst Case,” where he gave away 50% of streaming rights to 333 fans who purchased NFTs for the song’s rights. This move was a pioneering example of how NFTs can be used to ensure artists receive their royalties directly and transparently, bypassing traditional industry intermediaries while also creating ways to engage fans.

Gaming

In the gaming world, NFTs provide utility as tradable in-game assets. Players can own in-game items like skins, weapons, and characters as NFTs. These items open up monetization opportunities by allowing developers to create unique digital collectibles that players can buy or trade on an open blockchain marketplace. Unlike traditional gaming, where users license items to use within the game, NFTs create an open economy where players have sovereign ownership over their digital items. For game developers, monetization extends beyond traditional in-game purchases. They can earn royalties each time an NFT they created is traded, providing a sustainable revenue model that aligns with the interests of the gaming community.

Other Industries Benefiting from NFTs

The benefits of NFTs are not restricted to music, gaming, and sports. Here is a list of other industries that benefit from NFTs:

Real estate: Virtual and physical real estate transactions can be tokenized, simplifying processes and adding new layers of functionality.

Fashion: High-end brands are creating digital clothing and accessories as NFTs, blending the lines between physical and digital fashion..

Education: NFTs can be used to verify academic credentials, making them easily verifiable and transferable.

Advertising And Marketing: NFTs offer innovative ways for brands to engage with consumers, like tokenized coupons, loyalty programs, or exclusive digital content.