NFTs are one-of-a-kind digital assets based on blockchain technology that may represent anything from artwork to music. This implies that when you acquire an NFT, the transaction is recorded in a digital ledger at all times.
The NFT industry continues to evolve at a breakneck pace, transforming the crypto world, as we know it. Many first-timers have no idea what they are throwing themselves into. When newcomers and investors acquire an NFT, they do not always know precisely what they are getting. Non-fungible tokens are going popular quicker than anything else he has seen, according to crypto tycoon Sam Bankman-Fried, but most individuals who possess them to have no idea what the future holds for such digital assets.
“I still believe that many individuals joining in don't know what it’s supposed to be like”, the 29-year-old said in a discussion with CNBC's “Street Signs Asia” on August 24.
Bankman-Fried went on to say that, he has spoken with many crypto aficionados. Notably, when he questioned what they plan to do with their tokens, his customers generally merely shook their heads. According to the FTX creator, Visa has also entered the NFT market by purchasing a CryptoPunk NFT for $150,000 (£109,000).
“It is almost mainstreaming quicker than the public realizes what they're embracing, which is a strange thing. It has the potential to result in massive proliferation. It might also leave a bad sensation in people’s mouth if there's a breakdown, which no one ever found out what it was”, he added.
As per a Galaxy Digital study citing data from DappRadar, transaction volumes of prominent NFT collections like CryptoPunks, Bored Ape Yacht Club, and Meebits have increased by over 300 percent in the last month. The popularity of play-to-earn games and the emergence of NFTs as a store of wealth are credited for the increase.
“I am not going to claim they have not earned money acquiring them”, Bankman-Fried added. “Some have undoubtedly gained money by trading them. If you can figure out what makes them appealing, that would have been another way to enter into the sport”.
He went on to say, “NFTs are a budding sector that has many unknowns about where it will go in the medium to long run. For the time being, NFT revenues are still breaking all-time peaks, resulting in increased cognitive knowledge and sociocultural acceptance in the mass market. The marketplace may be able to maintain such velocity over time if decentralized finance grows at the same time”.