The Gold Rush of The 21st Century: NFT’s Backed Digital Art?

The Gold Rush of The 21st Century

There was never a time when memes could sell for hundreds of thousands of dollars. Nor has there ever been a time when a digital collage could hope to make $69 million off an auction. Until now, that is. The NFT revolution is bringing in a frenzy of opportunities—but this time, they’re not limited to investors and other financial bigwigs. From artists to common internet folk with a good sense of humor, designers, and art collectors, there’s a once-in-a-lifetime opportunity to make big bucks in the revolutionary digital asset marketplace.

But First—What’s an NFT? 

NFT stands for a non-fungible token, a new asset class derived from blockchain technology. While there are a few blockchains that can mint these tokens, Ethereum is leading the market as its robust network makes NFT creation easy and accessible to all. These tokens are digital assets, whether a gif, a meme, a PNG of your imaginary friend, or even a tweet (Twitter founder Jack Dorsey’s tweet sold for $2.9 million!)—anything that lives in the metaverse and can be stored as a file.

By turning these files into NFTs, you’re granted immutable ownership to them, which means that nobody else can claim them as their own, like a one-of-a-kind Van Gogh painting. Ethereum’s blockchain technology makes this possible through smart contracts, which underwrite the terms and conditions required to ensure asset ownership. But you don’t need to be a programmer to get in on the trend. Digital fashion marketplace DIGITALAX collaborates with designers to release limited-edition fashion drops—they handle all the minting. Meanwhile, open marketplaces like OpenSea and Rarible streamline the creation process so that all you really need to do is click a few boxes and confirm!

The Role Cryptocurrency Plays in The NFT Rush 

Whenever there’s a new financial trend sweeping across the internet, cryptocurrency is almost always involved. And that remains true, even in the world of NFTs and digital art.

Cryptocurrency, from Bitcoin to Ethereum, Stellar, Polkadot, and more, have been at the forefront of the internet’s minds these days—a trend that materialized in 2020, when the market took an upward surge after investors sought a hedge against possible pandemic-induced inflation. Even if you haven’t followed the crypto hype, people around you may have been talking about investing in Bitcoin because it had been the frontrunner of the recent bull market.

Since Q4 of 2020, Bitcoin led the market to a bullish wave, climbing to $66,000 by Q2 of 2021. Ethereum didn’t fall behind, either, making massive leaps and breaking its historical records with a $3,000 all-time high—partly due to the surge in NFT interest. In particular, it’s important to understand how NFTs have been bringing success to Ether (ETH) on a financial front—the coin has been on an upward trend since January of this year.

NFT transactions and processing fees are made with ETH, hence why the two go hand-in-hand in today’s cryptocurrency market, riddled with opportunities for risk-takers and eager investors. As a result, there’s a possibility to make big bank through integrated blockchain-based ventures, bringing in what experts believe is a 21st-century gold rush.

The 21st Century Gold Rush 

The discovery and subsequent influence of gold nuggets in the Sacramento Valley of California sparked the 19th-century gold rush. The historical moment brought an influx of immigrants to the region, bloating the non-native population by approximately 9,900%. Over 750,000 pounds of gold were extracted within a short period, eventually depleting California’s surface-level gold within two years. People who went on a mining frenzy were able to, quite literally, strike gold, as they collectively shoveled off millions of dollars per year, peaking at $81 million in 1852. At the time, that was a massive amount of money—an opportunity that skeptics never took advantage of, losing them a once-in-a-lifetime ticket to high society.

Today’s NFT hype is akin to the California gold rush, except tokens represent a completely different, intangible asset class. And today, the minefield lives in the metaverse—the world beyond the screen. These tokens have already taken over the digital art community, bringing in millions of dollars to artists all over the globe—even people from impoverished societies who have never been able to monetize their work before.

Some believe that the NFT craze is a modern gold rush, as early adopters can make the most out of the market while it’s still fresh and full of millennial millionaires looking to score the next big thing in internet art. Beeple, the legendary artist who made the mind-boggling $69 million digital art sale, was able to capture the attention of Christie’s, giving digital art a place in the traditional and rigid fine arts society. So many revolutionary events are overlapping each other at a lightning-fast pace—it’s difficult not to flock in with the rest.

Now the big question is whether you’re willing to take the risk and put money or resources into NFTs, or if you choose to remain skeptical until the very end.

Blockchain And Its Applications: The Next Big Thing? 

Blockchain technology, the operator behind NFTs, has a simple value proposition: it decentralizes all data and removes the central authority from the equation so that no single entity is in control of transactions. It runs a public ledger of transactions, where every single token can be traced down to its creation, bringing transparency to the internet—an extremely valuable feat, especially for financial institutions. Moreover, data stored on blockchains are extremely secure as they’re shielded by complex protocols that are difficult to break down.

This technology is growing increasingly important in today’s context, particularly in keeping the market fair and pro-consumer. As governments control central banks and fiat currency, they essentially have the power to control funds or intentionally allow the economy to move on its accord. For instance, if governments continue to sanction huge grants to the entirety of the population, the value of money will incrementally decrease, while the prices of goods and services need to increase to meet this shift, essentially causing inflation.

And that’s why the demand for blockchain-backed assets is high. Cryptocurrencies and NFTs are just brushing the surface of their capabilities—more opportunities are likely to come out of this contemporary technology. But it’s also true that digital assets are speculative in value and are subject to possible limitations once authorities start getting concerned. For now, exploring what blockchain technology can offer and joining the 21st-century gold rush is a risk—and it’s certainly not for the faint of heart! Ultimately, there’s money to be made if you believe in blockchains, but if you choose to remain skeptical, then it’s best not to dip into a game of money and risk.

Ellen Hollington

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