After Bitcoin, which became the talk of the town for several months in a row during its rising period, another subject that quickly rose to prominence was NFT trading. The term NFT trading is amusing because NFTs are non-fungible tokens that essentially represent non-independently exchangeable items.
So, how did NFT trading prosper to the point of its emergence in the traditional Art and Retail Industries?
To answer this question, consider NFTs as a form of agreement of ownership or use of an asset between the creator and the buyer or between the buyer and the seller. The asset that is minted as NFT, in a figurative sense, can be anything like a physical object such as a golden Xbox controller or an intangible object like an in-game weapon skin.
What brings value to NFT is the aspect of gaining exclusive ownership or collecting an asset, which is one of the oldest habits of humankind and the reason why the Art industry exists. So, since assets can be bought, borrowed, or lent for monetary gains, their transactional nature ties in with the act of NFT trading.
Read More: NFTs 101 Guide
In conclusion, all of it perfectly aligns with the primary goal of both art and retail industries- to create or produce items that a person can own or access for monetary gains. Let’s see some examples of how NFTs entering those industries affects their state and their evolution.
Adaptation of NFT in Art
The standard definition of the words’ Art Industry’ only encompasses the industry that deals with creating and selling visual artwork created by sculptors, painters, etc., through art galleries, auction houses, or independent sales.
However, art by itself can also encapsulate games, music, entertainment items, etc. Thus, one can say that the art industry is subdivided by the collective music industry, entertainment industry, video game industry, and so on. The surfacing of NFT in these industries has only added more value to their market worth which was previously limited by the use of fiat money.
Understanding Crypto Art
Crypto Artist is among the terms that you must become familiar with due to the emergence of NFT after the Bitcoin boom in the global currency market. A Crypto Artist is someone who publishes their work as NFT on the blockchain, and they can be musicians, visual artists, filmmakers, and so on.
When minted as NFT, their work of art can be termed as Crypto Art, and those are presently sold on NFT marketplaces and NFT auction websites only.
An important thing to note for such transactions is that they exist on the blockchain, meaning they’re near-permanent and also globally accessible unless the respective buyers or sellers prefer anonymity. Either way, crypto NFT trading via NFT websites broadens the scope of sale for art when it’s minted as NFT. It ultimately allows any user(s) residing in any corner of the world to make NFT purchase(s) using the decentralized Bitcoins or equivalent.
Adaptation of NFT in Retail
The retail industry functions much like the art industry, except for mass-producing identical items instead of creating those items in a limited quantity. But, after the crypto NFT boom and learning about the evidence of the prospective sales of NFT of the likes of Beeple NFT and Grimes NFT, the retail industry seems all too willing to hop on the NFT bandwagon.
In addition to making exclusive items or releasing limited editions of specialized items for their sale as NFT, the retail industry has also adopted crypto trade in the following few ways.
De-Centralized Finance (DeFi)
It is a finance system that pertains to token borrowing, lending, or swapping with the help of smart contracts. Such a practice can allow users to make purchases or own retail NFT items when retail units impart such service in exchange for additional benefits.
This system can simplify payments and invite investors, who are essentially the driving force as equal as the consumers for the retail industries.
A social token is based on an individual or an organization offering their own form of cryptocurrency to monetize their brand value. Celebrities, Communities, Brands, etc., can offer it to fans or the public to reward them for their loyalty.
Yes, the idea is pretty similar to offering loyalty points as done by some companies and organizations. Still, since social tokens are a form of blockchain-based cryptocurrency, they can also support NFT transactions and some types of fiat money transactions.
Both types of items or channels could later support NFT sales for the aforementioned industries. In turn, the NFT trade will ideally support the fashion industry and the music industry, too, because they are largely retail industries in the sense where a product is put on the market for sale or mass consumption.
Several other channels and components linked with NFT also exist to culminate both industries into creating NFTs en masse for several years to come unless NFTs drop like Cryptocurrencies.