According to the Q3 2022 report of NonFungible Company, the NFT market is in poor condition. The Wall Street Journal and other media report that the NFT market fell by 92 percent compared to last September. This caused panic among some people engaged in NFT projects for charity, while others tried to keep calm, considering the views of experts, saying that it was a natural phenomenon for interest to drop. So, let’s make things clear and try to understand what is happening with NFT and what to expect in the nearest future from people engaged in the Digital Art for Life program and NFT projects for charity.
Let’s start with the NFT notion to understand how it works. NFTs (non-fungible tokens) are a digital way to prove your ownership of an asset. Most NFT assets are digital. However, physical NFT assets can also be implemented. Non-fungible tokens use the technology that helps to record and track ownership. NFT is an asset used in a digital or virtual format that was released based on cryptocurrency and embodied using the technology of blockchain. Due to a combination of symbols with a unique code, all the needed data is recorded in the token. Inside, such information contains:
- data about the object itself
- data about the copyright holder
- user rights data
- data about the token purchase and sale operation
By purchasing a non-fungible token, the person gains the official rights confirming the ownership of an original digital item. Besides, other rights are assigned to the person, due to which they can perform some actions with the token.
The token can be added to any product in digital format – images, music, video recordings, and digital content of other categories. In addition, services of blockchain and e-wallets are made in such a way that the users can keep tokens as long as they want.
The report by NonFungible in 2022 made people think that the NFT market is dying since the sale of non-fungible tokens fell to 92%, making a daily average of about 19,000. In addition, the number of active wallets decreased 88% compared to November 2021.
Non-fungible token owners found themselves in a situation where the value of their assets was far less than they paid for them. As a result, people have lost interest in non-fungible tokens. As Google Trends show, the number of NFT search results fell by 80%. Indirectly, this relates to the war in Ukraine because the public’s focus was shifted to it. However, before you start looking for a job to cover all your expenses, let’s analyze the NFT market’s perspective.
Despite the decrease in non-fungible tokens’ popularity, it will unlikely disappear soon. Currently, two large domains use NFT to deal with collectible things and gaming tokens. Some non-fungible tokens owners and experts believe that non-fungible tokens have chances for growth and development.
- Decentralized Finance. Non-fungible tokens can become a new financial tool. This means that you can pay, invest, buy tickets with the help of the NFT, and more. In recent times, NFTs have been used as a tool for donations. Now, you can use NFT for charity; for example, many people donate non-fungible tokens to Ukrainians suffering from the war. There also exists a Digital Art for Life project aimed at supporting the army by selling NFT. In this case, people do not try to earn by investing, but they start selling NFT for charity.
- Virtual Reality. Modern life has become more digitalized. Digitalization applies to all life spheres: communication, business, etc. Non-fungible tokens can become a facilitator between real and virtual worlds, allowing the transfer of physical belongings into the physical world.
- Entertainment and Arts. Creative people use the digitalization of the world to make their artworks digital and transfer them into virtual reality. Using non-fungible tokens makes it simpler to purchase their works of art. Thus, creative people have gained another way to monetize their art pieces and help other people by participating in the NFT projects for charity. Non-fungible tokens go beyond direct monetary donations. They allow creative people to auction off their digital creations and arrange an NFT auction for charity.
Perspectives of NFT Market
The NFT market is still developing. It faces ups and downs but evolving. There are many spheres where it can be used, from investing to selling NFT for charity. Recent events have shown that non-fungible tokens can be an excellent tool for donating. The Digital Art for Life project is a good example of this.
Moreover, non-fungible tokens are about using blockchain technology. Like all innovative things, it requires a lot of attention and support. Hopefully, the project will overcome all the difficulties, and NFT for charity and investing will become a popular tool.
What will happen to the non-fungible token in the future? No one can say it for sure. Nevertheless, technologies called NFT have one significant advantage: creating unrepeatable tokens and protecting them from larceny. Due to the unrepeatable code given to each item, you don’t have to be disturbed about the protection of your information. It is securely protected from duplication and stealing so that you can digitize any valuable information. Moreover, it is a new way of donating and participating in such charity programs as Digital Art for Life which is topical due to the events in Ukraine.
Nevertheless, there are no norms and legislative regulations that would impact the advancement of NFT technologies. This sphere is unstable yet, though it has excellent potential. Cryptographic tokens give the opportunity to many creative people to earn funds, make their copyrights safe, arrange NFT auctions for charity, and users to create original digital collections for private use or further resale.