INSUBCONTINENT EXCLUSIVE:
NFTs are seen as a way to have possessions in online and virtual environmentsNon-fungible tokens (NFTs), a type of digital asset, have
exploded in popularity this year, with NFT artworks selling for millions of dollars.The trend is perplexing those who might wonder why so
much money is being spent on items that only exist in digital form and can be viewed by anyone for free
transactions kept on networked computers
The blockchain serves as a public ledger, allowing anyone to verify the NFT's authenticity and who owns it.So unlike most digital items
which can be endlessly reproduced, each NFT has a unique digital signature, meaning it is one of a kind.NFTs are usually bought with
cryptocurrencies or in dollars and the blockchain keeps a record of transactions
sales, while in sports, fans can collect and trade NFTs relating to a particular player or team.For instance, on the National Basketball
Association Top Shot platform, enthusiasts can buy collectible NFTs in the form of video highlights of moments from games.While these
highlights can be seen for free on other platforms such as YouTube, people are buying the status as the owner of a particular NFT, which is
unique due to the digital signature.NFTs can also be patches of land in virtual world environments, digital clothing, or exclusive use of a
March.How much has the market grown?Traded since around 2017, NFTs surged in popularity in early 2021, then had another explosive jump
around August.Sales volumes surged to $10.7 billion in the third quarter of 2021, according to data from market tracker DappRadar
This was up more than eightfold from the previous quarter.On the biggest NFT marketplace, OpenSea, there were $2.6 billion of sales in
October this year, a massive increase from the $4.8 million in October 2020.Why have NFTs surged?Some attribute the frenzy to lockdowns
forcing people to spend more time at home on the internet.NFTs are seen as a way to have possessions in online and virtual environments,
sneakers.For others, the lure lies in rapidly rising prices and the prospect of big returns
Some buyers "flip" NFTs, selling them on within a few days or even hours for profit.The recent price gains in cryptocurrencies such as
bitcoin, which rose around 300% in 2020, have also created a new group of crypto-rich investors, who spend their cryptocurrencies on
NFTs.Why are NFTs important?Enthusiasts see NFTs as the future of ownership
artists, NFTs could solve the problem of how they can monetise digital artworks
They can receive more income from NFTs, as they can get a royalty each time the NFT changes hands after the initial sale.NFTs could also
transform music, sports and gaming, NFTs' proponents say.What are the risks?Like cryptocurrencies, NFTs are largely unregulated
Anybody can create and sell an NFT and there is no guarantee of its value
Losses can stack up if the hype dies down.In a market where many participants use pseudonyms, fraud and scams are also a risk.
