NFTs or Non Fungible Tokens have been a polarizing topic in the investing community for the last couple of years. While most people think of them as JPEGs of apes, the blockchain technology behind NFTs has all sorts of real-world utility. Digital art is just one facet of the NFT industry, and nearly anything else that needs some sort of authentication can use this technology.
Recently, institutions have been joining the NFT Market at a rapid rate. Earlier this week, Visa (NYSE:V) announced a program to help content creators start businesses in various industries using NFTs. Entrepreneurs in the fashion, art, and music industries are some of the sectors chosen by Visa, as the world shifts towards an increasingly creator-driven market. This change signals Visa’s entry into the world of Web3.0 as content creation becomes the primary form of information transfer between creator and consumer.
Visa’s foray into the musical NFT space is an interesting one. Currently, platforms like Nifter by Clickstream (OTC:CLIS) and Audacity, are introducing users to the idea of NFT-driven music sharing. Artists can sell their songs as NFTs and earn payment via fiat or cryptocurrencies like Ethereum. The concept of a decentralized marketplace for selling original music is an intriguing one, particularly given the minuscule revenue split they receive from sites like Spotify.
NFTs Are Branching Out to Different Networks
One of the main barriers to entry for some content creators is the high gas fees that are present on the Ethereum network. While Ethereum is still the foundation for the NFT and DeFI industries, there are alternatives that are making some noise. For example, the largest NFT marketplace in the world, OpenSea, is close to adding Solana-based NFTs to its site. This would decrease fees and the costs involved in creating NFTs, and reduce the inability of some artists to join in.
Sites like Nifter are based on the Ethereum blockchain, but we could see broader adoption of networks like Solana or some Ethereum layer-2 protocols like Polygon or Arbitrum.
Are NFTs Here to Stay?
Most likely, but perhaps not in the iteration we are currently witnessing. The first step for NFTs was digital content like the JPEGs of apes or the uber-popular, NBA Top Shots from Vancouver-based Dapper Labs. In the future, we’ll likely see more of a shift to content like Nifter’s music offerings or authentication technology such as the digital verification of event tickets like they used at Coachella this past year.
The most bullish sign is institutional buy-in. Companies like Visa are joining other established businesses like Meta Platforms (NASDAQ:FB) which are adding NFTs to Instagram and Shopify (NYSE:SHOP) which is allowing creators to mint and sell NFTs on their online shops. Where the industry goes in the future is up for debate, but it is certainly reasonable to start looking at investing in the industry in its early days.
This industry article was published for information purposes and paid for by Strategic Innovations Inc. Although the Companies mentioned have not endorsed or paid directly for this article, Strategic Innovations is paid by these companies for social media management; the management includes such articles for informational purposes. And at no time is this endorsement to buy or sell any stock.
