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The rise of NFTs must be accompanied by further decentralization

The rise of non-fungible tokens (NFTs) has been a sight to behold, with the market seeing an increasing amount of mainstream traction with each passing day. To put things into perspective how big this space has actually become, conservative estimates show just how much money has currently entered this rapidly developing area. yoga above $500 million.

Another way of assessing the impact of NFTs on the global economy is by looking at the diverse range of artists, celebrities, musicians – basically just about anyone, at this point – who have embraced the technology. For example, the recent thrash metal pioneer Megadeth Became one of the latest adopters NFT’s allows supporters to purchase unique collectibles that are officially supported by the band. It just goes to show how widespread the reach of this technology has become almost overnight.

Additionally, what makes NFTs so unique is that they cannot be swapped for other tokens in a mutually interchangeable fashion. This is in contrast to both how most fiat assets work – that is, a US dollar can be swapped for a variety of goods – as well as most cryptocurrencies, such as bitcoin (B T c) and ether (ETH), function.

As a result of this unique capability of theirs, NFTs can serve as an excellent medium of ownership, allowing individuals to easily purchase a wide variety of things from digital art to music to real estate.

related: How NFT, DeFi and Web 3.0 are intertwined

NFTs need a more decentralized environment to flourish

As the non-fungible token market continues to flourish, this is because more and more people will continue to move towards the use of highly decentralized blockchains that offer their users a high level of data transparency and flexibility in terms of trading NFTs , especially when compared to centralized solutions like Rarible, OpenSea, Binance NFT, etc.

Today there are Byzantine fault tolerant (BFT) cluster-based blockchains designed to handle NFT database management duties. A decentralized database can provide users with streamlined access to a data distribution network that ensures a high degree of protection against data breaches, network failures and performance issues – all issues that currently plague the global NFT ecosystem at large .

related: The role of decentralized networks in a data-abundant, hyperconnected world

On a technical note, it should be pointed out that while most NFTs today are built on top of the Ethereum network, the ecosystem is currently facing some serious congestion issues as well as issues related to high gas fees. Recently, it was being reported that the average price of a transaction facility on the Ethereum network (between February and the end of March) was hovering around the $16-$20 range.

Finally, it’s worth noting that while most developers today continue to rely on centralized databases (such as those provided by Amazon Web Services and Microsoft), the fact of the matter is that these databases have a centralized point of failure. and thus are prone to various third-party intrusions and threats.

The future looks bright for NFTs

With more and more money – be it retail or institutional – NFT market entry With each passing day, many experts believe that the space will rapidly turn into a multi-billion dollar industry, with use cases extending far beyond just art and music ownership.

related: Art reimagined: NFTs are changing the collectibles market

Furthermore, it stands to reason that, in the future, we may see NFTs being used for a wide range of everyday payment/transaction purposes – such as buying clothes, shopping in supermarkets, etc. – because These tokens have an innate ability to link. Identification of an individual with the items purchased, thus making refunds and product swaps easier and more hassle-free.

In addition, as the COVID-19 pandemic continues to rage around the world, many governments are already promoting the use of contactless technologies within their borders. This could be another reason why NFT adoption may increase significantly in the coming months and years.

Finally, to chart the meteoric rise of these digital offerings, we can see that several major NFT marketplaces have seen record high transaction volumes recently. For example, OpenSea’s monetary in/outflow volume spiked There has been a massive 1,400% increase since the start of the year, while Rarible’s overall trading volume has increased by 634% over the past few months.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.

The views, opinions and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Pavel Bains is the CEO of Bluezel – the decentralized database for the new Internet. Powell is an expert in digital media, having worked with Disney, Microsoft, Warner Bros. and DreamWorks. Powell is also a frequent contributor to Forbes, Huffington Post and Fast Company, writing articles in the areas of finance and digital media. He has been named a Technology Pioneer by the World Economic Forum.