Why NFT is so successful in market?

 NFT stands by - Non-Fungible Tokens

As digitalization makes world global village, it has created problems of ownership. Said ownership solution has been given in the form of NFTs

It has been seen in last year, the total sales of NFTs hit $100 million. It was just start. Such as the DeFi market reached $4 billion in locked value and major cryptocurrencies began rally to yearly highs, we might shortly see a hockey-stick growth pattern in the NFT space. Let’s have a look at why it might be the case.

Why NFT is so successful in market?
Why NFT is so successful in market?

Reason #1: Simplicity and fun

The means of storing digital art, in-game assets (swords, garments), cards and kitties is a very simple and fun model to grasp, and it does not require any comprehend education. Operators see their entire interaction with the user interface as a fun game and are incentivized by the emotional reward of unique object ownership.

Fabian Vogelsteller, the creative designer of ERC-20 and ERC-725, has revealed in his public interviews that 

these standards were initially created for fun community tokens — art, fashion and entertainment — rather than financial applications that have recently been successful with the DeFi movement. 

Achieving the unique idea of Ethereum architects, NFTs focus on the same pattern that is people collect paintings and vases. Visual representation of an object with an immutable record of ownership is psychologically enticing to consumers.

Reason #2: Scarcity and investment attractiveness

Pricing of scarce objects/ items is a zero-sum game; individuals choose the items they believe will be in need by other people and thus will grow in price.

As physicist and network scientist Albert-Lázló Barabási writes in The Formula, 

when performance can’t be measured, network drives success. 

In the art community, distinguished creators, who are flourishing in reputation and have great connections, produce a limited number of acts that are highly sought after by many collectors. This promotes price growth.

If we take any industry without rarity, say, when screens get pricier, more screens flood the market. This is impossible in the NFT market where the cost of an object is inseparable from the psychological attraction, so the economic cycles are way more distinctive. The further in, the hotter it gets.
The non-fungible token (NFT) 'CryptoPunk #7523', a series of 10,000 unique pixel-art characters made by Larva Labs in 2017, was sold for $11.8m at Sotheby's earlier this year [File: Shannon Stapleton/Reuters]
The non-fungible token (NFT) 'CryptoPunk #7523', a series of 10,000 unique pixel-art characters made by Larva Labs in 2017, was sold for $11.8m at Sotheby's earlier this year [File: Shannon Stapleton/Reuters]

Reason #3: Adoption from Asia

The point that a lot of crypto developments target Asian markets to be successful is old news. In the case of NFTs, this interest is even more natural because the concept of funny collectible items and games have strong cultural origins in countries like South Korea and Japan.

Asians have an active fascination in visual representations of objects, cute characters and images. For instance, mascots — cute animals representing a specific town or company — as well as world-famous emojis were born in Japan.

The importance of an unbacked asset that is entirely market-driven also looks to be a natural concept for Asians. Games with in-house currencies that could be withdrawn lived in South Korea way before crypto.

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