Is money the only form of transaction for E-commerce? Well, with NFTs the spectrum of transactions and tokenizing of people’s assets has expanded to the next level by entering into the blockchain. Abbreviated from Non-fungible tokens, these are ways to represent real-world items on marketplaces.
In 2021 a great rise in NFT usage was observed. It became an E-commerce culture among regular users. Still, in 2022, many people have superficial ideas about NFTs, their uses, benefits, possible risks, and techniques.
Therefore, here we have brought a complete guide on how NFT is shaping the E-commerce industry, and what are the upcoming trends in digital marketplaces due to the assets that can be tokenized and used for various purposes in E-commerce.
NFTs are undoubtedly growing at a great pace and gaining popularity. You might be wondering in what ways does Non-fungible tokens (NFTs) have created an impact. So, here we bring statistics and facts that show how these digital assets have geared up in the market and their prospects.
Market and Sales
1. In 2021 the most expensive NFT was sold for $532 million. But this was a type of market manipulation as the owner first sold the token to himself in an attempt to inflate the price.
2. Factually, the most expensive NFT sold was for $92 million on Nifty Gateway. However, the type of selling is still speculative due to selling a series of artworks.
3. During the third quarter of 2021, NFTs trading volume increased to $10.67 billion. this rise was around 700% more than the previous quarter.
4. Talking about memes and tweets, the most expensive meme sold last year was worth $4 million and the most expensive tweet named “just setting up my Twitter” was for $2.9 million.
5. Considering Songs and videos, the highest value paid for a song in 2021 was $1.33 million and the most expensive video was $7 million.
6. The data collected and research was done by NonFungible.com shows that NFT sales are currently more than 15,000 per week.
7. Compared to 2020 to 2021 observed a rise in buyers for NFT transactions on popular marketplaces. Considering April with almost 30,000 unique buyers.
8. The topmost NFT marketplace according to the total volume of trades in mid-2021 was over $600 million is NBS TopShot.
Dating back to some milestones of NFTs
1. The first used non-fungible token could be dated back to 3rd 2014, which was a revolution and can be considered a major factor in the development of NFTs. It was named quantum by Kevin McCoy.
2. Millions of dollars for an NFT were spent for the first time on an art piece called the “Forever Rose”. It was sold for $1 million on 14th February 2018 and was shared among 10 buyers.
3. In 2020, NFT transactions went over $250 million.
What are NFTs (Non-Fungible Tokens)?
Abbreviated as NFTs are the tokens that can be used to represent ownership of unique items such as art, collectibles, real estate, remarkable scores, and many more. Being a completely solitary and non-interchangeable unit of data, it uses blockchain technology to prove ownership.
These are cryptographic assets on a blockchain having unique identification codes and metadata. It helps the digital assets to be distinguished from others available on marketplaces.
Unlike cryptocurrencies which are fungible, NFTs are identical and can be used as a medium for monetary transactions. The files store extra information, this feature elevates these unique digital assets above pure currency.
NFTs contain information like ownership details for identification and streamlined transfer between the token holders.
Types of Non-Fungible Tokens (NFTs)
People often confuse Non-Fungible tokens with art pieces, but the spectrum is a lot wider. We have collected 11 types of NFTs generally observed and used.
1. Gaming Scores
What can a player do with their scores earned in a game? They can do more than just boast about it, sell the scores, positions, or rewards achieved in a game. These achievements in a game are not easy to earn.
The players can tokenize their achievements, market and sell them on a digital marketplace. People are crazy about gaming, and good scores attract them. Selling gaming achievements has geared up in the last few years.
2. Identity ownership
As NFTs are unique and cannot be interchanged, therefore they can be used for certifications and licensing of identity-based assets. As unique identifiers are available the users can have reliable support for the identity management system.
NFTs, assure that individuals can store their identity information and its evidence without possible risks of losing it. The features available for certificates and licenses are capable of enhancing and simplifying the identity management sector.
3. Art pieces
The most popular type of NFTs used are for artworks. How can an artist ensure the patent of their work and even earn through it? it was difficult before the advent of Non-Fungible tokens. Now artists can have ownership rights for their work in marketplaces.
Blockchain and the Internet of Things can ensure a good hold on the ownership of real-world artwork. Artists can use oracles and smart contracts to create images that can be represented easily on the blockchain network.
4. Music and Videos
As digital space came into being media artists got a significant platform to showcase their talent. However, it is daunting to earn money through the internet. With the help of NFTs, these artists can tokenize their real-life music or video and let people watch and share it.
The more popularity a token will have, the more rate an artist will be able to incur. The sense of exclusivity in purchasing these tokens is the fundamental reason for its popularity. Artists get benefits of reaching out and the audience gets a premium experience.
Photographers are the artist that captures a moment to be remembered later. Now, NFTs have brought an opportunity for photographers to earn from their exemplary photos. They can have ownership and create a wide base of popularity.
As popularity increases, more people will be eager to have those images. Photos can be utilized a lot because of the increase in digital media usage. Users need relatable images for various purposes, both photographer and user can have a mutual platform through NFT.
6. Digital Collectibles
Crypto Kitties are online collectibles, which are the first type of NFTs used by people. These are the forms of valuable online kitties formed by people and tokenized with prospects.
In striking addition to the Non-Fungible token list, this category was so popularly used by people in 2017 that it congested the Ethereum market. Keeping in simple words, these collectibles are digital kittens with distinct traits that make them popular.
7. Name of Domains
It is now possible and beneficial to sell and purchase domains as Non-Fungible tokens on a blockchain network. Decentralized domain services like Unstoppable domains and the Ethereum Name Service are the most famous examples of Domain name tokens.
It is very beneficial to get ownership of a domain and make it popular. Also, a famous domain name kick starts your digital presence. Domain name Non-Fungible tokens are gearing up with popularity.
8. Event tickets
Another famous category of NFTs tickets and passes for various events and festivals. These types of tokens streamline the process of identification, booking, transparency, and transaction for people attending and organizing events.
Through NFTs, event managers can mist a specific number of tokenized tickets on their selected blockchain platform. The audience can purchase the tickets available through an auction and collect them in their wallets for easier accessibility.
Scroll through social media handles such as Instagram and Facebook, a major part of the feed is memes. Handlers make memes for every type of possible purpose and topic, from entertainment to politics.
Watch this: https://www.youtube.com/shorts/7RMIlhaYF48
This wide variety of assets can be tokenized and owned by individuals. It is one of the most significant advancements in the category of NFTs. The sale and ownership of memes inspire unique meme creators to participate in a futuristic ecosystem.
10. Assets from Real-world
Hardly real-world items can be observed serving as NFTs in marketplaces, but with the progress, the number is increasing. For instance, mane NFTs focus on real-world artworks like paintings, poetry, and many more. With artworks, real estate is also taking place.
Non-Fungible tokens are capable of introducing flexible purchasing of a car or home through blockchain and Ethereum. Hence, with cryptographic proof of ownership NFTs that represent real-world assets can invite great opportunities.
11. Virtual assets
Many of the types of NFTs we observed are virtual items that exist in the digital world. These are things that exist on devices and can be used as NFTs on various marketplaces. With popularity, makers can easily earn money by bringing their virtual assets to the blockchain.
Music, Digital art, Game scores, Domain names, Memes, and many more are part of Virtual items. These NFTs increase the scope and scalability of digital items in the future. Therefore, Virtual assets are gaining extreme popularity.
Benefits of Non-Fungible Tokens (NFTs)
As we have understood how many types of Non-Fungible tokens are there, we can move forward with more brief. But you might be wondering why should you know about NFTs. What are the ways that these tokens will help you?
So, before going further, we have collected here the benefits of NFTs one can have.
1. Streamlined Ownership
The fundamental benefit of NFTs is ownership without any chaos and threat. The NFTs give a way for identifiable and provable ownership of all details and pieces of evidence. As these tokens work on blockchain, an association of ownership to a single user is easier.
Adding to it, NFTs cannot be sold among multiple owners, sharing is a different subject. With the advanced technology, the buyer can be assured that NFTs are original. NFTs, assure that the owners have real things with complete possession.
Some critics argue that the items can be screenshot and sold, but in NFTs, the ownership is backed with proper evidence and information. With easy transition on the blockchain of ownership, NFTs guarantee secured possession.
2. Authentic and Transparent
Like we talked about in ownership the next benefit is connected to it. NFTs rely on the uniqueness of tokens that are created on the blockchain and hence imply the association of unique records with them. With uniqueness, the owner also has the power to control the supply.
The authenticity of a token is assured by the immutability of the blockchain on which these NFTs are stored. This immutability takes care of ceasing any type of modification, removal, or replacement in the asset. Hence, authenticity is the most valuable benefit.
Considering transparency, NFTs are backed with proper information and details about the asset. The buyer can keenly observe and then decide on investing in that token by the given information.
3. Easily transferable
Transferability is one of the most prominent benefits of NFTs. These tokens are easy to trade with simple procedures and a wide range of options available for trading. With blockchain technology, Non-fungible tokens are not only transparent but transferable too.
For instance, for gamers gaming is not just a time pass. They play passionately earn rewards, score high, and also make in-game purchases. But what after they stop playing the game? Well, NFTs are here as a rescue.
Even after leaving the game due to any possible reason, the player can mint their gaming scores and earned rewards and sell them on a marketplace. Gaming was just an example here, many other assets can be easily sold and bought by tokenizing them.
4. Enhances market Efficiency
Another most prominent benefit is fostering market efficiency. NFTs have the potential to convert a physical asset into a digital one and streamline the procedure, eliminate intermediaries, increase supply chain efficiency and enhance security.
Tokenizing artwork or any other asset increases authenticity and reduces costs. Both sellers and buyers benefit because NFTs vanish the role of agents and other transactions. As connections grow tighter the market situation gets better.
NFTs not only help with transactions and marketplaces but go beyond that. These tokens can be evolved as an effective way of managing and controlling sensitive data and information for people.
5. Safety and Security
NFTs are created using blockchain technology. This technology is a system of storing information in a way that it becomes impossible to hack, alter and delete. Through blockchain transactions are duplicated and distributed across a peer-to-peer network.
All NFTs stored on Blockchain technology have distinctive records of authenticity and ownership chain. This procedure eliminates the possibility of mishandling and theft of assets.
Blockchain technology works to cease the possible alteration or modification and ensure the complete uniqueness of the NFT.
6. Distinctive investment Portfolio
Unlike traditional investments that demand stocks and bonds, NFTs have distinctive qualities. NFTs come with complete uniqueness and scarcity of assets alike in the market. This increases the diversification of your investment portfolio.
7. Earning Opportunity
NFTs have a great potential for virtual and real-world assets. Recently, NFTs have observed a great rise in assets of the digital world. Digital creators are increasingly using NFTs as a platform for their artistic representation.
Before, NFTs the digital content creators observed difficulty in presenting their works and having a potential income out of them. NFTs are capable of creating the development of a completely new creator economy.
Through NFTs, a creator can earn more than once over a single NFT by using smart contracts. The creator has a chance to receive royalties every time the content is resold, as NFT metadata includes the creator’s address.
8. Fostering Supportive growth
The system of NFTs boosts inclusive growth by bringing content creators from every field into a single ecosystem. This creates a platform where creators can obtain the true value of their creation and connect to the buyers directly.
NFTs do not promote hardcore competition, whereas the idea is to bring all the creators together and develop a rewarding group of marketplaces and ecosystems.
How do NFTs make Money?
After knowing the benefits of NFTs, now it’s time to unfold 4 ways of creating an earning potential through these tokens. You can utilize the above-mentioned types of NFTs and blend them with these four techniques of earning through investing in NFTs.
1. Keeping on Rent
One technique to generate income through NFTs is to rent them out. Have complete ownership of popular NFTs and start to give them on rent to individuals or organizations. Time-bound renting is advised.
This creates a passive income for you and anchorage a great potential of those NFTs.
2. Start with Liquidity
To have popular and rewarding NFTs in your court is to play a smart game. Here you can provide liquidity and earn NFTs in return to build a position in the market. Sell any of your available NFTs to liquidate your position on the liquidity pools.
3. Share stakes of NFTs
Align NFTs with decentralized finance protocol to create a possibility of staking your NFTs. By using this process, you can deposit digital assets into a smart contract through a Decentralized finance protocol and easily generate income.
4. Royalties of NFTs
Rather than having a one-time profit from selling the NFTs, you can use a smart contract and receive royalties every time the content is resold. As a creator, you have the power to generate income through reselling your original content.
With creativity, you can even pave more roads towards generating a potential income from NFTs. In a new trend, people invest in NFTs for a good passive income. It is a good option to anchorage your part of income by using the techniques listed above.
Why NFTs for Ecommerce?
NFTs eliminate the use of third parties and help in saving money for both the buyer and the seller. For the traditional method of transactions and marketplaces, mediators that connected seller and consumer demanded a lot of commission.
These Non-fungible tokens can break the arrangement of crazy commission eaters. Through NFTs, a seller can place a selling price that is above the cost price and invites a great profit without affecting the number of sales due to the high selling price.
Adding to it, consumers love the idea of having a product in real-time after ordering it. Traditional Ecommerce sites can deliver the items within 2 to 3 days, but an NFT of that particular product can be delivered instantly. In the end, client satisfaction is significant.
It also caters to the modern consumer culture demands, now the presentation of products determines the decisions. NFTs are successful because they are continuously coming up with innovative ideas for virtual assets.
The need got NFTs in E-commerce is due to its level of content creation. It is already built on a complicated blockchain that only demands creative content. The artists or sellers when providing engaging content, they are highly predicted to make money.
Due to the benefits and security of blockchain technology, many companies have started using NFTs. Various MNCs have already started using this technique to boost their profits in the eCommerce sector.
How to get started with NFT and Sell them
Let’s now understand how you can start your NFT journey and sell those tokens on a marketplace. Here is an illustrative and brief process of developing your own NFTs.
1. Start with creating a digital wallet
Every NFT auction and marketplace demands primarily a digital wallet. To create one with MetaMask, you have to go to its website and click on the download button. Choose them to create a new wallet and seed phrase.
Creating a password and going through some security measures will lead you to account set up.
2. Fill your Wallet up with some Cryptocurrency
Once the wallet is set up, you will have to add some ETH to it. By using the “Buy ETH with Wyre” button, you will be able to make payment through Apple Pay or a Debit card. NFT platforms will require some Cryptocurrency.
However, if you are not willing to make payment, then don’t worry leave the stage for later.
3. Connect your Digital Wallet to NFT Marketplaces
After that, you have created one and hopefully added some Cryptocurrency, you can connect the wallet to an NFT platform. All marketplaces and wallets have similar procedures and are self-explanatory.
4. Start uploading an asset to turn it into an NFT
As your wallet is connected, now you can start with creating and minting your own NFTs. On any general site or marketplace, go on a button where create is written, select the file and start uploading it.
5. Create an auction
For the next step, you will have to choose how your NFT will be presented and what kind of pricing. For pricing you can choose from three options, one is a fixed price, the second is an unlimited auction, and the third is a timed auction.
After setting up the price, you get an option to uncloak once purchased, so the buyer could get a high resolution of your asset.
6. Draft information and details of your NFT
Now that you are done with setting presentation and pricing, add title and listing for your asset. For better sales, create an engaging, direct, and simple description and information. Also, consider adding the file’s properties, the more information the viewer will have more they will be able to build trust for buying your asset.
7. Launch the NFT
As you are ready with everything Launch your NFT on the platform. You can also sign smart contracts for better profits.
Features of NFT Marketplaces
Marketplaces for Non-fungible token works with some basic features. These features impact the usage of these tokens and determine their usability. Let’s have look at some basic and determining features of NFTs.
1. Asset Description
The NFTs in the marketplace should include a perfect, short, and informational storefront. This gives users all the necessary information regarding the asset’s functions, ownership, previews, and pricing history.
2. A Basic search tools
This feature allows users to search for the items they are looking for. This is the most common feature that every user has experienced somewhere. It facilitates the sellers in managing their products.
3. Filtering among many Products
Filtration is a crucial feature for managing selection and purchases. The users can easily set filters for the assets and get what they want. People can select categories like payment method, collection, pricing, location, genre, and many more.
4. Wallet and Cryptocurrency
Another essential feature of NFTs is the availability of Wallets for transactions of Cryptocurrency. This feature enables users and sellers to trade and connects easily on the NFT marketplace.
Recent and Upcoming trends of NFTs
We have observed a brief description of NFT fundamentals and their history. Now it’s time to have a look at Recent updates and the upcoming future of these tokenizing technology. Some upcoming trends anchorage a pace of growth in NFT’s market.
Here we have listed the most vital and game-changing Recent Updated in late 2021 that will affect the future of Upcoming trends in 2022.
1. Casting an Avatar
NFTs are a great place for art and artists, now a new creative innovation has come up. Recently, NFTs have brought Avatar casting which is ideated and created by Kay and BAYC. These avatars are algorithmically generated virtual images of cartoon characters.
Each NFT avatar is unique and has distinctive traits, these photos are in a form of profile pictures.
2. Working on Energy problem with Ethereum 2.0
The major fallback of NFTs is the huge carbon footprint generated to create a single Non-Fungible token. One transaction for NFTs on the Ethereum blockchain uses as much power used by a household for a complete day.
Ethereum is using energy insanely, and for 2022 it has changed. The current Ethereum is with lower capacity, Ethereum 2.0 will come up with the expanded pipe, lower costs, and higher output.
3. Extending to Metaverse through Apple
The Metaverse is going to start in 2022 for NFT marketplaces. Everything from Blockchain to Cryptocurrency and complete NFTs will b served directly inside the metaverse. With Augmented reality and Virtual Reality, this technology is expected to make a mark.
4. Tight system for Cryptocurrency
As an increased number of projects have started benefiting from the NFT market, makes it is inevitable to bring better and more secure systems for handling the Crypto part. NFTs are secure but in the upcoming period, they will demand better secrets from scamsters.
5. A new Space for Music NFTs
Music with NFTs will observe a great future in 2022, a virtual band has already formed for tokens. some projects by Kay include decentralized music label and community, which is a piece of live music and broadcast platform.
6. Bringing real-world experiences
Another thing initializing in NFTs is bringing real-world experiences into account for the NFT platforms and marketplaces. The Bored Ape Club Yacht started with a party in 2021 itself. With the advent of technology, Real-Life experiences are going to be a huge change.
7. Personality NFTs
These are apps that will enable the artist to perform as an NFT personality rather than their real individuality. It is expected that artists and musicians will adapt to these changes in 2022 and exist in the metaverse as a performer.
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8. Using NFTs for Loans
One of the significant upcoming trends of NFTs is their usage for taking up loans. Investors are already using their NFT collections to be kept for obtaining loans in the time of emergency or new potential investments.
Several Decentralized finance platforms were launched in 2021 for helping users with loans and now in 2022, it is expected to take up a great pace.
Possible Fallbacks of the NFTs
As we have seen and observed information and details about NFTs, now it’s time to have a look at some possible Fallbacks. Knowing some things are incomplete without knowing their dark side. Therefore, her ewe has listed some cons of NFTs.
1. Quite a speculative market
Some critics believe that NFTs are still a speculative market, because of their dependency on the aesthetic and sentimental value of the assets. It is difficult to gauge the long-term investment value of the tokens.
2. Threat of Theft
Even though having Blockchain technology, NFTs are a vulnerable target by a few severity branches. Many transactions are exposed to hackers, this can be resolved in the coming time but some security measure by the user’s end is needed.
3. Ownership differs from a complete control
Where we observe the potential of creators, the owners who don’t have any hold of a supply of similar products by the same creator. This is a little injustice to the owner of the NFT, as they can’t decide and control the prints of the assets they bought.
4. Doubtful sustainability
Due to its huge consumption of energy, scientists are concerned about further environmental depletion because of the NFTs. This evokes the use of a great amount of power and blockchain technology adds to it.
These listed fallbacks might be resolved in the upcoming future, but we aren’t sure. The users while utilizing the features of NFTs should keep this in mind.
Sellers and Buyers have a great opportunity for an open and decentralized digital marketplace. These tokens observe a great potential in the future. Understanding this technology can help an individual to comply with the contemporary market situation, as NFTs are going to have a major part of it.
NFTs in the E-commerce industry are increasing at a great pace and bringing many artists and creators into a central stage. Bygone are days when artists had to worry about where they could sell their artwork, and members just worked for their fun. Even gamers can have potential earnings.
Looking up to a great future of NFTs, keeping in mind the possible fallbacks and utilizing it in the most significant and sustainable manner is the best option.
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If you want to create a remarkable presence through NFT Marketplace development, then contact us now.
Frequently Asked Questions
1. What are Examples of NFTs?
Non-Fungible Tokens (NFTs) are capable of representing any virtual or real-world asset to online platforms. These tokens include in-game items, artworks, real estate, second-hand sales, memes, tweets, and many more.
2. Is using NFTs safe and secure?
With blockchain technology, using NFTs is completely safe. With distributed nature of blockchains makes NFTs difficult to be hacked or altered. But some threats might occur, but with conscious measures, you can make it through them.
3. Can anyone buy an NFT?
Yes, NFTs aren’t limited to a particular category of consumers. Anyone can create a wallet and have access to the NFT marketplaces. You can easily buy an NFT, once you have a working digital wallet and cryptocurrency in it.
4. Are creating and selling NFTs easy and worth it?
Many people are using NFTs to sell or rent their works and achievements, it is a good investment and its worthiness depends on how you use it.
5. Which is the best agency for NFT marketplace development?
Consider Auxano Global Services as the best choice for NFT marketplace development solutions . Our experts are experienced in the field and have worked extensively. Contact us now.