Are NFTs Overhyped?
Have NFT sales skyrocketed to over $2.5 billion in the past six months? Yes
Are thousands of NFT sales worth millions of dollars in total value are traded each day? Yes
Has one digital artwork sold for $69 million? Yes
Does it look like NFTs are a bubble? Yes
Are they over hyped? No
Let me explain
However, while it might look like the market for NFTs bloomed out of nowhere, our modern economy has been trading NFTs for thousands of years. NFT a stands for Non-Fungible Token which is anything that can’t be replicated and keep the same value, basically a one of a kind item like your driver’s license or a family heirloom.
This past year has seen a boon of NFT sales amount to billions of dollars however these sales almost all were from digital art sales. In 2019, online art sales amounted to approximately 4.82 billion U.S. dollars, up by four percent over the previous year. Worldwide, the estimated value of the online art market is forecast to reach a total of 9.32 billion U.S. dollars by 2024.
Not only have NFTs not reached their full potential in the art space but platforms are creating entirely new industries surrounding digital creating which could generate billions annually in less than a decade.
But this is where things get crazy…
How big is the NFT industry?
Remember how I said NFTs don’t only apply to art? If you think about it NFTs can apply to basically every single industry ever. Here’s a list of what can be considered an NFT:
- Deeds to a car
- Tickets to a real world event
- Tokenized invoices
- Legal documents
- A unique sneaker in a limited-run fashion line
- An in-game item
- An essay
- A digital collectible
- Domain name
- A ticket that gives you access to an event or a coupon
- Code repository
- Sports memorabilia
- Unique coupon
- Lots and lots more options to get creative with!
The global collectibles market alone — including physical trading cards, games, toys, cars, and more — is a $370 BILLION market.
That’s more than 1,000X bigger than the trading volume of NFTs in 2020/
By that logic, then, the global NFT market can (and will) grow by 1,000-fold over the next 10-plus years…
And this isn’t counting the market for cloud computing, storage, identity theft, domains, sports memorabilia, tickets and coupons which combined are well over tens of trillions per year industries. The potential market size for potential NFTs is almost too big to estimate, only time will tell, but it’s clear NFTs on the blockchain will reshape nearly every industry.
An NFT Internet
While the sales for some digital art pieces might in the past year may be far over-priced, we must remember the massive scale and potential for the NFT market as a whole.